TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 96
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....2. Brief facts of the case are that the appellants were providing 'Consulting Engineer Service' taxable under the Finance Act, 1994 (hereinafter referred to as 'the Act') on which service tax was payable by the appellant. The appellant had also received 'rent-a-cab service' and 'legal service' on which service tax was payable by the appellant under reverse charge. 3. It was alleged in the show cause notice that the appellant had suppressed the 'taxable value' of consulting engineer services provided to their clients during the period 2011-12 to 2015-16 and also that service tax has not been paid on the services of 'rent-a-cab service' and 'legal services' under 'reverse charge' during this period. 4. Initially the service tax liability ha....
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....nd 'reimbursement' of certain expenses like office supplies, utilities, printing expenses, rent of office set up near the site, office supplies, utilities and communication expenses etc. Tax on the professional fee charged from the customers for consultancy services was paid by the appellant, however, tax on the reimbursements, the appellant has neither charged nor paid service tax. It has been contended that in terms of section 67(1)(i) of the Act it was the intention of the law makers to bring into the tax bracket only the gross amount charged by the service provider for such services provided or to be provided by him, i.e. only the amount charged by the service provider for the service rendered by him, and nothing over and above that. Th....
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....me and liable to tax, is baseless, erroneous and lacks merit. He also relied upon various case laws as under: a) Indus Motor Company Vs CCE, Cochin 2007-TIOL-1855-CESTAT-Bang: 2008(9) STR(Tri. Ban.) held that payment of service tax in this case is based on assumption and presumption; therefore, demand cannot be confirmed. b) Synergy Audio Visual Workshop Pvt. Ltd. Vs CST Bangalore, 2008-TIOL-809-CESTAT-BANG; The Tribunal in this case following its earlier decision held that service tax payment cannot be confirmed on the basis of the amount shown in the income tax return and balance sheet or profit and loss account. c) TIL Vs CST Kolkata 2008-TIOL-181-CESTAT-KOL: In this case, demand was raised on the basis of figures contained in the ....
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....e same, does not prima facie carry much weight inasmuch as the onus lies upon the revenue to substantiate the allegations made by them." 9. It has also been contended that penalty under section 78 of the Act is not sustainable as the conditions precedent prescribed therein did not exist, in the instant case. 10. Learned Authorised Representative Shri Santosh Kumar Agarwal relies on the impugned order. He further relies on the findings of the Commissioner (Appeals), which are as follows:- i) There is no dispute that the appellant have provided consulting engineer service to NHAI and others and have not carried out any road construction activity. ii) Entry No. 13(a) of Notification No. 25/2012-ST dated 20.06.2012 exempts services ....
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....ii) The period involved is 2011-12 to 2015-16 and the show cause notice was issued on 05.01.2017, invoking the extended period of limitation. iv) The appellant have admittedly paid service tax of Rs. 82,91,173/- during the period of dispute. v) The Revenue have computed the tax liability on the basis of gross turnover as reflected in Form No. 26AS (under the Income Tax provision), which is a document available on the website of Income Tax Department, wherein the data recorded is on cash basis or receipt basis of accounting. Whereas under the provisions of service tax, the tax liability is computed on the basis of accrual on mercantile system of accounting, which is in contrast to the cash basis of accounting. vi) The only allegation i....
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....cantile basis (accrual basis) on the service provided whether the value of such service is received or not. Thus, we find that the whole basis of show cause notice is incorrect and/or misconceived. 13. We further hold that the extended period of limitation is not available to Revenue under the facts and circumstances. We further hold that the appellant is entitled to exemption under the Notification No. 25/2012-ST under Sl. No. 13(a) of the said notification for providing consulting engineer services in the matter of road construction. When road construction is exempt, every activity is exempt relating to the road construction including consulting engineer services. The appellant also relied on the ruling in Lord Krishna Real Infra Pvt. Li....