TaxTMI 
TaxTMI 
2023 (12) TMI 784
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....lants were discharging their service tax liability on full amount of consideration, as used to be received by them from M/s HEG. However, during the audit of appellant's unit, department noted that the appellants started paying tax on only 50% of said amount of consideration received by them in lieu of services provided. On being enquired the appellant informed about an agreement with M/s HEG dated May 02, 2014 as was executed after introduction of Work Contract Service WCS wherein their services were considered as the Works Contract Service. Hence the appellants started taking benefit of Notification No. 30/2012-ST dated June 20, 2012, according to which the service provider of WCS was liable to pay 50% of the leviable tax and remaining 50....
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....ants for packing of electrodes manufactured by M/s HEG Ltd. The packing was done at the premises M/s HEG itself. The packaging activity involved element of goods as well as the element of service. Hence, it was the works contract service to which the Notification No. 30/2012 was applicable. In accordance with entry No. 9 therein 50% of the tax liability was to be discharged by the service provider which has been discharged by the appellant and remaining 50% by the service recipient, the same has been duly discharged by M/s HEG who has also issued the certificate to this effect. It is submitted that the Adjudicating Authority below have failed to consider these things. It is further impressed upon that exercise otherwise is revenue neutral a....
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....rmity in those findings, the appeal is prayed to be dismissed. 6. Having heard the rival contentions and pursuing the entire record. The issue to be decided is observed as follows : Whether the payment of 50% tax by the appellant and remaining 50% by recipient of its service resulted into short payment of duty, as alleged? 7. We observe from the order under challenge, it to be the admitted fact that 100% tax liability towards the amount of consideration received by the appellant (the service provider) for providing services of 'Packaging activity' to M/s HEG (service recipient) stands discharged by the provider as well as the recipient to the extent of 50% each. There is also no denial to the fact that appellant itself is the manuf....
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....ellant, the service provider is wrongly alleged as short payment when admittedly remaining 50% of the liability stands discharged by the recipient of the service (M/s HEG). We draw support from the decision of Karnataka High Court in the case of Zyeta Interiors Pvt. Ltd. versus Vice Chairman Settlement Commissioner, Chennai 2022 (58) G.S.T.L. 151 (Kar.). This decision has emphasized that where the Government received the entire amount of tax, an assessee cannot be called upon to make the payment even if it had deposited some portion of the tax dues and the remaining portion deposited by the service provider. This Tribunal also in the case of M/s Aadarsh Sri Sai Manpower Solution (P) Ltd. (supra), while relying upon case laws as relied upon ....