TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 612
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....aster Service Level Agreement entered by the Appellant with M/s. JSW Steel Ltd, they were given statement of works to be executed which consisted of full details of the items of the works services to be rendered. Thereafter, alleging that the Appellant failed to raise proper invoice by including the value for the facilities provided by the service receiver which were collected by service receiver through debit notes, show-cause notice was issued and thereafter, Adjudication authority as per the impugned order confirmed the demand and also imposed penalties under different provisions of law. Aggrieved by said order, an appeal was filed before the Commissioner (Appeals) and Commissioner (Appeals) as per impugned order upheld the Order-in-Original passed by the Adjudicating authority. Aggrieved by said order, present appeal is filed. 3. When the appeal came up for hearing, the Learned Counsel for the Appellant drew our attention to the Master Service Level Agreement dated 30th January, 2008 entered by the Appellant with M/s. JSW Steel Ltd and as per the said agreement, the activities related to information technology are outsourced as per the details below. i) Infrastructu....
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....s per Rule 4A of the Service Tax Rules, 1994 for the taxable services rendered to M/s. JSW Steel Ltd and paid service tax on the value of services so provided. The appellant submits that M/s. JSW Steel Limited has raised the following debit notes for reimbursement of expenses incurred by them in providing certain facilities to the appellant and their employees, as stated in the grounds of appeal. Sl. No. Amounts (Rs.) Remarks 1 19,788 Canteen expenses debited by TNGL 2 3,798 Akhil Roy Housing loan amount 3 98,000 Food coupon expenses from April 2008 to November 2009 debited by TNGL 4 91,560 Attire expenses (shirts) given to employees 5 3,77,639 Salem op balance 6 61,33,995 Madhucar car recovery 7 66,000 KVN Rao Car transferred from Mumbai 8 6,59,131 Software Service 9 11,88,170 BSNL 10 2,43,331 Diwali Gifts 11 16,625 Staff Welfare Expenses 12 41,000 89,39,037 The above expenses were accounted as sundry Creditors (purchase expenses) in the books. The amount payable to JSW Steel were treated as payment rece....
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....not result in accrual of any benefit to the service provider and that such free supplies do not come within the meaning of 'gross amount charged' by the service provider under Section 67 of the Finance Act, 1994 during the disputed period. Reliance is placed on the following decisions: * Union of India vs. Intercontinental Consultants and Technocrats Pvt. Ltd.: 2018 (10) GSTL 401 (SC) * CST vs. Bhayana Builders (P) Ltd.: 2018 (10) GSTL 118 (SC) 3.4 As directed by the Bench, the Learned Counsel also made additional written submissions and also produced the debit note issued by M/s. JSW Steel Ltd. on account of the license fee paid to M/s. Oracle for procurement of software. 4. The learned Authorised Representative (AR) for the Revenue reiterated the finding in the impugned order and submits that after taking into consideration all the above points, the appellants have willfully undervalued by not raising proper invoices by including the value for the facilities provided by the service receiver which were collected by service receiver through debit notes. They have willfully mis-declared ST-3 returns filed by them with the department. 5. Heard both sides. A....
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....p the expenses which are incurred while rendering the service and are reimbursed and, therefore, what was required to be decided was whether Section 67 of the Act permits subordinate legislation to be enacted as was done by Rule 5. It needs to be noted that prior to 19 April, 2006, in the absence of a Rule, the valuation was required to be done as per the provisions of Section 67 of the Act. The Supreme Court noticed that the charging Section 66 provides that there shall be levied Service Tax @ 12% of the value of taxable services referred to in the subclauses of Section 65 and collected in such manner as may be prescribed. Thus, the Service Tax is on the "value of taxable services" and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the Service Tax. It is for this reason that the Supreme Court observed that the expression "such" occurring in Section 67 of the Act assumes importance. It is in this context that the Supreme Court in paragraph 26 observed that the authority has to find what is the gross amount charged for providing "such" taxable services and so any other amount which is calculated not ....