TaxTMI 
TaxTMI 
2024 (6) TMI 301
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....under the category of manpower supply Rs. 53.54 lakhs ii. Not treating the gross receipt under (i) as cum-tax amount Rs. 10.77 lakhs iii. Disallowing rectification of accounting mistake Rs. 10.65 lakhs iv. Levy of service tax on the services rendered by the Appellant as a sub-contractor and other miscellaneous issues Rs. 5.97 lakhs Total Rs. 80.93 lakhs 3. The brief facts of the case are that the Appellant is engaged in the businesses such as 'management, maintenance or repair service' and 'commercial or industrial construction'. The Appellant also undertakes processing of raw material and manufacture of finished excisable goods which are cleared on payment of excise duty. The audit of the Appellant for the Financial Year 2004-05 to the Financial Year 200809 was conducted in February 2010. 3.1. Subsequently, in March 2011, investigation proceedings were initiated against the Appellant and on completion of the investigation, a Show Cause Notice dated 20.10.2011 was issued to the Appellant by invoking extended period of limitation and alleging undervaluation of the taxable services and consequent short payment of Service tax. 3.2. The Notice was adjudicated by the Ld....
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....en due to non-consideration of the gross amount received as inclusive of tax. The appellant submits that when the activities of processing of raw material and manufacture of finished excisable goods are itself outside the levy of Service tax, the question of levy and collection of Service tax on those activities does not arise; accordingly, the demand of service tax confirmed without extending cum-tax benefit would also not survive. 4.4. Regarding the demand of service tax of Rs. 10.65 lakhs, the appellant submits that this demand has arisen due to disallowance of rectification of accounting mistake. The Appellant submits that the figure of Rs. 4,82,78,070/- considered by the Departmental authorities is incorrect inasmuch as certain receipts were considered twice by the auditors - M/s. Parida Mohanty & Associates; the said figure was examined by M/s. Srikanta & Associates, Chartered Accountants with reference to TDS certificates in Form 26AS, which revealed that the actual amounts received was Rs. 3,93,23,706/-; that, however, the bona fide mistake of human error in accounting figures has not been considered by the ld. adjudicating authority. The appellant also submits that the su....
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....or Raw Material Feeding to Briquietting Plant". The 'Scope of Work' assigned to the appellant as per the Work Order (page 89 of the appeal memorandum) is furnished below: - "SCOPE OF WORK The contractor is responsible for the following works 1. Shifting and feeding of chrome ore in the hoppers provided near chrome ore storage yard. by Volvo or pay loader. 2. filling and maintaining position all the bins in Daybin-2 4. The contractor shall take all safety measures during operation of the plant and all equipments should be cleaned on day to day basis. 5. The contractor shall ensure that the man power engaged by him are adequately experienced enough to operate and verify the conditions all the equipments of the above plant. 6. The contractor shall ensure total house keeping of the plant to the satisfaction of JSL Engineers. 7. The contractor shall engage his people for collecting of samples of chrome ore, from different points and taking those to laboratory for testing. 8. The contractor shall ensure that the tools taken from mechanical store is returned at the end of the work. 9. The contractor shall ensure that the plant will not stop in any shift for ab....
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....s outside the purview of Service tax in terms of Notification No. 8/2005-ST dated 01.03.2005. Accordingly, we hold that the demand of service tax confirmed in the impugned order under the category of "manpower recruitment or supply agency service" is not sustainable and hence, we set aside the same. 8. We observe that the demand of Rs. 10.77 lakhs has arisen due to non-consideration of the gross amount received as inclusive of tax. Since the activities undertaken by the appellant have been held to be not liable for service tax, the question of levy and collection of Service tax on the gross amount as inclusive of service tax does not arise. Accordingly, the demand of service tax confirmed without extending cum-tax benefit also would not survive. Hence, we set aside the demand of Rs.10.77 Lakhs confirmed in the impugned order on this count. 9. Regarding the demand of service tax of Rs. 10.65 lakhs, we observe that this demand has arisen due to disallowance of rectification of accounting mistake. The Appellant submits that the figure of Rs. 4,82,78,070/- considered by the Departmental authorities is incorrect in as much as certain receipts were considered twice by the auditors - M/....
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....unt the differential amount of Rs.89,54,364/- was incorrectly shown in the P&L account prepared by M/s. Parida Mohanty & Associates. We observe that the appellant need to clarify this point and for this purpose, the issue is remanded back to the adjudicating authority. The appellant should submit all the documentary evidence available with them within a period of one month from the date of receipt of this Order. Thereafter, the adjudicating authority shall decide the issue within a period of three months, after giving opportunity to the appellant to clarify the issue. 10. Regarding the demand of service tax of Rs. 5.97 lakhs, on the services rendered by the Appellant as a sub-contractor and other miscellaneous issues, we observe that Board vide Circular No. 96/7/2007-ST dated 23.08.2007 clarified that for the services provided, sub-contractors are liable to pay service tax even if the main contractor discharges service tax on the gross value. However, we observe that the said Circular, being oppressive in nature for the subcontractor, could only have prospective effect. This view has been held by the Hon'ble Supreme Court in the case of Suchitra Components Ltd. v. Commissioner....