TaxTMI 
TaxTMI 
2024 (10) TMI 1259
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....(including Cesses) of Rs.17,229/- for 01.04.2015 to 30.09.2015), in terms of the first proviso to Section 78(1) of the Act 5. The appeal filed by the appellant, is disposed off accordingly." 2.1 Appellant is engaged in the manufacture of biscuits and also registered, vide Service Tax Code AADCM8831DST001, for receiving transportation of goods by road service taxable under the Finance Act, 1994. 2.2 During the scrutiny/ audit of the records of the appellant it was noticed that they had short paid Service Tax (including Cess) to the tune of Rs.2,77,682/-, during the period June, 2011 to September, 2015, for receiving the transport of goods be road service on which they were required to pay Service Tax under the reverse charge mechanism 2.3 A show cause notice dated 29.06.2016, was issued to the appellant asking them to show cause as to why- (a) Service Tax amounting to Rs. 2,77,682/- (including Cesses) should not be demanded and recovered from them under proviso to sub-section (1) of Section 73 of the Finance Act, 1994, (b) Interest at appropriate rate should not be charged and recovered from them under the provisions of Section 75 of the Finance A....
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....cipient but service recipient has deducted certain amounts from the amount billed as penalties. • As the essential ingredient for invoking Rule 6(1) (x) are absent said Rule cannot be invoked in present case. • Demand is barred by limitation. Reliance placed on the decision of tribunal in case of Khaira and Associates [2020 (34) GSTL 224 (T-Del)] and Computer Science Corporation India Pvt. Ltd. [Final Order No 70162/2024 dated 01.04.2024 in Service Tax Appeal No 52075 of 2015] 3.3 Arguing for the revenue learned authorized representative re-iterated the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 Impugned order records findings as follows: "4.1 I have gone through the facts of the case, the averments made at the time of the personal hearing and all other material/ documents available on record. It is observed that: (i) The demand of Service Tax (including Cesses) of Rs.2,77,682/- is based on examination of the ST-3 returns of the appellant vis-à-vis the statements of freight details maintained by the app....
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....ice Tax (Determination of Value) Rules, 2006, vide Notification No.24/2012-ST dated 06.06.2012, w.e.f. 01.07.2012, so as to provide, as under: Rule_6(1)(x): Subject to the provisions of Section 67, the value of taxable services shall include the amount realized as demurrage or by any other name whatever called for the provision of a service beyond the period originally contracted or in any other manner relatable to the provision of service. 4.3.1 Since the penalties deducted by the appellant, from the freight, was relatable to the provision of transport of goods by road service, I, thus, find that the same were required to-be included in the taxable value of this service, w.e.f, 01.07.2012 only and not prior to 01.07.2012. Thus, in this case, the Service Tax liability of the appellant, for 01.07.2012 to 30.09.2015, was Rs.1,76,720/- 4.4 It is further observed under the self-assessment procedure prescribed under the statute, the appellant were required to assess & pay their Service Tax liability correctly, whereas the non-payment of Service Tax could be detected only during scrutiny of the records of the appellant, Even, they suppressed the taxable value i....
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....voices raised by the service provider, the service recipient deducted certain amounts as penalty for the certain deficiencies noted in the services received. The dispute is then what shall be the value of the services received. 4.4 Section 67 of the Finance Act, 1994 as it existed during the relevant period read as follows: SECTION 67. Valuation of taxable services for charging service tax.- (1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall,- (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged ....
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....vider, following conditions are prescribed: "34. The numbers of trucks as required on day to day basis will be made available by the Carrier within 24 hrs from the indent received for various destinations from units /factories/ Depot and shall be placed before 3 pm at the premises ,exception will be Vehicles for East which needs to be placed within 48 hrs . In the event of your failure to provide the vehicle for any reason whatsoever, you shall be bound and liable to pay and we shall be entitled to recover penalty Rs 800/- per day per truck, in case delay is beyond 1 day, then Rs 1000/- will be recovered at the time of clearing the bills from day One 37. You will be paid freight per trip on full truck load basis, for the material transported by you from one point to another . However for multi-point pick up / delivery, Parle shall pay Rs 400/- for each such additional delivery to Carrier, provided the distance between both the points are more than 5km 41. Carrier will be responsible to deliver the consignment in right quantity and sound condition within the stipulated transit day specified by Parle. For any delay Parle has right to deduct Rs 500/- per day....
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....ctory/Units /depot's to the desired destination of Parle intimated from time to time always by direct truck without any transshipment. of time Carrier is found doing transshipment at any point a penalty of RS 10000/- will be recovered from Carrier's freight bill along with damages if any, occurred during such transshipment 6. Deduction of Transit Claims e. Transit damages up to Rs 2000/- or less per consignment will be deducted from your freight bill, above 2000/-, we will recover the value of goods to the extent of Rs 2000/- and on balance value ,deduction of transit damage claims wil be done for minimum 20% of the consignment value. Higher % of deduction will be based on no of incidences occurred and also liable for black listed which will always be at the discretion of Parle on case to case basis. f. In cases of normal shortages, the Maximum Retail Price (MRP) of shortages in goods shall be deducted from carrier's bills the product for such 6. Payments 3. Carrier shall operate on freight paid' basis and will be paid on the basis of vehicle type freight trip for the material transported by Carrier from one point to anot....
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....voice value on account of the above payments received by the service provider. It is the submission of the appellant that where so ever any additional incentive was paid to the service provider the same was added while determining the value of taxable service. However in case of penalties deducted from the invoice value the taxable value is determined on the basis of the gross amount paid towards the provision of service. We do not find that Rule 6 (1) (x) provides for enhancement of the value of the taxable service in such cases. Said Rule will have no applicability to the present case. In any case Rule 6 (1) (x) cannot be read to be over-riding the provisions of Section 67 of the Finance Act, 1994. In case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (10) G.S.T.L. 401 (S.C.)] Hon'ble Supreme Court observed as follows: "21. Undoubtedly, Rule 5 of the Rules, 2006 brings within its sweep the expenses which are incurred while rendering the service and are reimbursed, that is, for which the service receiver has made the payments to the assessees. As per these Rules, these reimbursable expenses also form part of 'gross amount charged'. Therefore, the core is....