TaxTMI 
TaxTMI 
2025 (11) TMI 128
X X X X Extracts X X X X
X X X X Extracts X X X X
....xty five thousand one hundred sixty eighty only) (inclusive of all cess) upon the party under the proviso of Section 73 (1) of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017 as discussed above. The demand of service tax of Rs.1,44,999/- (Rupees One lakh forty four thousand nine hundred ninety nine only) being over and above from the actual demand is not sustainable and is dropped, as discussed earlier. (ii). I order to recover the interest at applicable rate from the party on the confirmed amount under Section 75 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017. (iii). I impose penalty of Rs.65,168/- (Rupees Sixty five thousand one hundred sixty eighty only) equal to the Service Tax amount liable upon the party under Section 78 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017, as discussed above for suppression of facts and contravention of the provisions of the Finance Act (ibid) and rules made thereunder. However, an option is given to party under sub Section (1) (ii) of Section 78 of the Finance Act, 1994 that if the Servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctober, 2015 to March, 2016 whereby they were liable for penalty under Section 77 (2) of the Finance Act, 1994 as detailed in table below:- S. No. Period of Half-Year Last date for submitting the ST- 3Return Date of actual submission of the ST- 3 Return Penalty U/S 77(2) of the Act (ibid) in Rs. 1 April'15 to Sept.'15 25.10.15 Not filed 20000/- 2 Oct.'15 to March'16 29.04.16 Not filed 20000/- 2.4 A show cause notice dated 19.04.2021 was issued asking them to show cause as to why- "(i) An amount (Gross) of Rs. 14,49,434/- received by the party from their client during the financial years from 2015-16, In lieu of providing the services of 'Declared Services should not be treated as the total value of taxable services. (ii). Not paid/ short paid Service Tax amount of Rs.2,10,167/-(inclusive all cess) for the period 2015-16 as discussed above, should not be demanded and recovered from them under the proviso to Section 73 (1) of the Finance Act, 1994 read with Section 174 of the Central GST Act, 2017. (iii). Interest on the amount as mentioned at (ii) above should not be charged and recovered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Stuti Saggi learned Counsel appearing for the appellant and Shri A.K. Choudhary learned Authorised Representative appearing for the revenue. 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 Impugned order records the findings as follows:- "5.1 I have carefully gone through the case records. I find that the department. has alleged non-payment of service tax by the appellant on the grounds that the appellant had failed to discharge their due service tax liability by not ling statutory returns and declaring the table assessable value therein. The appellant however, has contested the demand of service tax on the grounds that the appellant is a surveyor and he has raised bills showing separate entries of fee for service and reimbursement amount. If this amount is removed from the amount received by the appellant, then their gross receipts are below Rs 10 lacs making them eligible for Small Scale Industries Exemption. 5.2 I find that, in the impugned order the adjudicating authority has already extended the SSI Exemption benefit to the appellant and dropped the demand amounting to Rs. 1,44,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arately indicated in the invoice issued by the service provider to the recipient of service; (vii) the service provider recovers from the recipient of service only such amount as has been paid by him to the third party; and (viii) the goods or services procured by the service provider from the third party as a pure agent of the recipient of service are in addition to the services he provides on his own account. Explanation 1. For the purposes of sub- rule (2), "pure agent" means a person who- (a) enters into a contractual agreement with the recipient of service to act as his pure agent to incur expenditure or costs in the course of providing taxable service, (b) neither intends to hold nor holds any title to the goods or services so procured or provided as pure agent of the recipient of service; (c) does not use such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services. The above statutory provision makes it amply clear that the service provider and recipient should have entered into an agreement that the service provider will be acting as Pure Agent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2017 and 1 impose penalty under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017." 4.3 Appellant is not contesting that for providing services by him are taxable services, his only submission is that for providing these services they have raised bills showing separate entries for fees of service and reimbursable amount. This reimbursable amount should be removed while determining the liability of the threshold exemption limit of Rs.10 lakhs. The Original Authority himself has admitted that the benefit of threshold exemption limit would be available to the appellant. If the value of reimbursable expenses is removed from the gross value then the entire value of service will be less than the threshold exemption limit. 4.4 After examining the provisions of Rule 5 (1) of Service Tax (Determination of Value) Rules, 2006 impugned order concluded that these values could not have been excluded itself in the present case after the amendments were made in Rule 5, subsequent to the decision of Hon'ble Supreme Court in the case of M/s Intercontinental Consultants and Technocrats Pvt. Ltd. After amendment made these expenses could not have been deducted from the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pellant laboured under the very doubt which forms the basis of the issue before us and hence, decided to address it to the concerned authority, the Development Commissioner, thus, in a sense offering its activities to assessment. The Development Commissioner answered in favour of the appellant and in its reply, even quoted a letter by the Ministry of Commerce in favour of an exemption the appellant was seeking, which anybody would have found satisfactory. Only on receiving this satisfactory reply did the appellant decide to claim exemption. Even if one were to accept the argument that the Development Commissioner was perhaps not the most suitable repository of the answers to the queries that the appellant laboured under, it does not take away from the bona fide conduct of the appellant. It still reflects the fact that the appellant made efforts in pursuit of adherence to the law rather than its breach. 24. Further, we are not convinced with the finding of the Tribunal which placed the onus of providing evidence in support of bona fide conduct, by observing that "the appellants had not brought anything on record" to prove their claim of bona fide conduct, on the appellant. ....