TaxTMI 
TaxTMI 
2026 (2) TMI 337
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....ible for making payment of any taxes, duties, fees, levies on behalf of the appellant. Accordingly, NHAI had paid income tax (TDS) on behalf of the appellant but the appellants had not included the TDS amounts, which were paid by NHAI, while arriving at the taxable value. Hence, SCN dt.08.04.2009 for the period April, 2007 to March, 2008 and SCN dt.08.10.2009 for the period April, 2008 to March, 2009 were issued demanding an amount of Rs.1,88,053/- along with interest under section 75 and penalties under section 76 and 77 of the Finance Act, 1994. The appellants contested the SCNs and thereafter, the Original Adjudicating Authority, after taking into account the submissions made by both sides, confirmed the demand along with interest and imposed penalties as raised in the SCNs. The appellants preferred an appeal before the Commissioner (Appeals), who has placed reliance on the order of the Tribunal in the case of CCE, Jaipur-I Vs Louis Berger International Inc. [2008 (9) TMI 144 - CESTAT New Delhi] and held that the demand of service tax on TDS portion during the material period, along with interest is legally sustainable on merits. He further relied on the order of the Tribunal in....
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....d criminal consequences and therefore must be specifically stated in the SCN. h) The adjudicating authority failed to appreciate that Tribunal in the case of Patel Coating Industries Pvt Ltd Vs CCE [1993 (67) ELT 605] has held that failure to indicate proposed classification in SCN amounts to violation of principles of natural justice. i) The adjudicating authority failed to appreciate that SCN proposing to levy service tax on the amount of TDS in the value of taxable service for the period 2007-08 is time barred since SCN was dt.08.04.2009. 4. It is further submitted that in the instant case, NHAI has paid income tax, over and above the agreed contract value and service tax liability is only on the gross amount charged for such services. It is therefore cannot be said that the appellant had charged NHAI for TDS. Reliance is placed on the decision of Hon'ble Supreme Court in the case of Bhayana Builders Pvt Ltd [2018 (10) GSTL 118], wherein the issue before the Apex Court was whether the value of goods/material supplied or provided free of cost by a service recipient and used for providing a taxable service of construction or industrial complex was to be includ....
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.... were being borne by NHAI directly, in which case, as per the provision under section 67 of the Finance Act, such TDS amounts are not includible in the value for calculating the service tax payable on the services provided. 8. The TDS being paid by NHAI to the Government is as per the provisions of the Income Tax Act, 1961. Tax Deducted at Source (TDS) is a way of collection of income tax under the provision of Chapter XVII of the Income Tax Act. Section 198 provides that all the sums deducted in accordance with provisions of the chapter shall for the purpose of computing the income of the assessee, be deemed to be the income received. 9. Hon'ble Madras High Court in the case of Sify Technologies Ltd (supra) held that 'the service tax could not have been calculated on the basis of the amount received from the clients minus TDS'. 10. The Coordinate Bench at Delhi in the case of Louis Berger International Inc. (supra), held that 'the TDS amount deducted was payable only on behalf of the appellant to the income tax department. We do not find any justification to exclude the said amount from the gross amount for the purpose of determining the service tax and we allow the appea....
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....nitely be said that TDS amount paid by NHAI into the Government Treasury on behalf of the appellant herein was an amount paid towards consideration for the services rendered. 15. In view of the above analysis, we find that the impugned order is correct and no interference is called for." 12. Learned Counsel has submitted that in the instant case, TDS has not been deducted from the amount invoiced. NHAI has paid income tax, over and above the agreed contract value. Service tax liability is only on the gross amount charged for such services. Therefore, it cannot be said that appellant had charged NHAI for TDS. Thus, facts are different from earlier decision of this Bench in appellant's own case. 13. Hon'ble Supreme Court in the case of Bhayana Builders Pvt Ltd (supra), held as under. "12. On a reading of the above definition, it is clear that both prior and after amendment, the value on which service tax is payable has to satisfy the following ingredients: a. Service tax is payable on the gross amount charged:- the words "gross amount" only refers to the entire contract value between the service provider and the service recipient. The word "gross" is ....