TaxTMI 
TaxTMI 
2026 (6) TMI 456
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....he audit of the Appellant-Assessee was conducted by the Officers of the Service Tax Commissionerate, New Delhi for the period from 2008-09 to 2011-12 under Rule 5A of the Service Tax Rules, 2004. The Assessee is one of the units of BHEL, New Delhi a Government of India 'MAHARATNA' Public Sector undertaking registered as Public Limited Company under the Indian Companies Act, 1956. 4. During the course of audit, on scrutiny of ST-3 Returns, Annual Reports and Balance Sheets of the Appellant-Assessee for the aforesaid period, it appeared to the Department that the Appellant-Assessee is liable to pay Service Tax. Accordingly, four periodical Show Cause Notices [SCN] were issued which culminated into the impugned Order-In-Original whereby following order was passed:- ORDER (i) I confirm the demand of the service tax amounting to Rs. 99,70,198/-(Rupees Ninety Nine Lakhs Seventy Thousand and One Hundred Ninety Eight Only) upon the party under the proviso to Section 73(1) of the Finance Act, 1994, raised vide first Show Cause Notice dated 22.10.2013 (ii) I confirm the demand of the service tax amounting to Rs 1,14,78,175/-(Rupees One Crore Fourteen Lakhs Seventy....
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....ith reference to the first show cause notice dated 22.10.2013 (xi) I impose a total penalty of Rs. 10,000/- (Rupees Ten Thousand Only) upon the party under Section 77(2) of the Finance Act, 1994 with reference to the third show cause notice dated 09.05.2016 The above adjudged dues should be paid forthwith by the party Hence, the present appeal before the Tribunal. 5. The learned Advocate appearing on behalf of the Appellant submits that:- a) As per the agreement, the Appellant charged the amount under the head "transportation and insurance charge" for Transportation of Goods by Road and the Appellant is not a Goods Transport Agency which issues Consignment Notes and accordingly, no service tax was payable. b) During the relevant period, the Appellant had executed various projects for supply, installation and successful completion of switch yards and sub-stations vis-a-vis the power-projects for its various customers engaged in power generation and power transmission over long distance for domestic distribution in India. c) For execution of such projects, various plants and machineries were transported to the sites from the place of....
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.... same. i) The audit of records of the Appellant for the period 200809 to 2011-12 was conducted by the officers of Service Tax Commissionerate, New Delhi and it was observed that the Appellant has inter alia not deposited Service Tax on- (i) Charges recovered for arranging transportation and Insurance of equipment/ material from vendor's location to customer's site for the period 2009-10 to 2011-12. (ii) Payments made in foreign currency to accounting firm M/s Won-Acct Consulting of Ethiopia for complying with local accounting requirements of Ethiopia for the period 2008-09 to 2011-12. j) Appellant was issued with Show Cause Notice dated 22.10.2013 proposing demand and recovery of Service Tax of Rs. 99,70,198/- along with interest and penalties to which the Appellant filed a detailed reply on 16.03.2014. Further for subsequent periods, statement of demand dated 20.05.2014, 09.05.2016 and 23.01.2018 were issued in terms of Section 73(1A) of the Act as a 'subsequent follow-up show cause notice' to SCN dated 22.10.2013. In response to the same, the Appellant filed the replies before the Adjudicating Authority contesting the demand on ....
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.... service tax) at the rate of fourteen per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed. Section 66D- Negative list of services- The negative list shall comprise of the following services, namely :- (p) services by way of transportation of goods- (i) by road except the services of- (A) a goods transportation agency; or (B) a courier agency; 11. Therefore, after June 2012, the service by way of transportation of goods by road was specifically not taxable if such service was provided by a person other than a GTA. 12. The Service tax is a contract-based levy, which can only be levied in accordance with the underlying contract between the parties, hence, for determination of service tax, the intent of the parties from the contract is to be ascertained. Reliance in this regard is placed on the following decisions: (i) All India Federation of Tax Practitioners, 2007 (7) S.T.R (625) (S.C.) (ii) Association of Leasing and Financial Service Com....
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.... records. The detail of the expenses incurred, and the amount received on the transportation of goods in respect of Financial Year 2015-16 and 2016-17 are as follows: Year 2015-16 2016-17 Expenditure on Freight & Insurance 10,81,33,246 12,77,66,203 Income from Freight & Insurance 9,51,28,389 8,13,75,011 15. The Intention of the parties as per the agreement as a whole in respect of the transaction is to be judged and the Adjudicating Authority cannot give some different colour to the transaction. Thus, the allegation that the Appellant was providing "Business Support Service" instead of service of "Transportation of Goods by Road" only because the BSS is subject to Service Tax is unjustified and illegal. 16. Further, the whole of the amount charged by the Appellant was towards the transportation of goods by road. There was no bifurcation of the amount towards the transportation and insurance as such amount is to be expanded during the transportation of the goods. Further, insurance amount charged is bundled with the transportation service, therefore, the same cannot be considered and treated separately. 17. During the pre and post negative list re....
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....tsourced to somebody else. In the present case, the transportation and insurance are not normally undertaken by the customer itself and thus it cannot be said to be outsourced. Further, a transaction of 'BSS' envisages only two parties viz. service provider and service receiver where the provider of BSS must carry out the outsourced activity itself. The same is evident from the nature of services specified in the 'includes' clause. In this regard, the relevant part of the Board Circular no. 334-42006-TRU, dated 20.02.2006 is reproduced below: "Business Support Services: Business entities outsource a number of services for use in business or commerce. These services include transaction processing, routine administration or accountancy. customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing instant offices along with secretarial assistance known as "Business Centre Services''. It is proposed to tax all such out-sourced services. If these services are provided on behalf of a person, they are already taxed under Business Auxiliary Service. Definition of support servic....
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....per Section 66A of the Finance Act, the branch office as well as the office of Appellant in India are two separate permanent establishments and therefore, the service which was availed by the branch office in Ethiopia cannot be said to be the service availed by the Appellant in India. 27. Further, the impugned order is vague insofar as the demand for the period post July 2012 is confirmed under 'Import of Services' by going into discussion on Place of Provision of Service Rules, 2012. This shows the non-applicability of mind as the Adjudicating Authority has based the impugned order on the provisions of Pre negative list Regime, which is not applicable to the period post July, 2012. 28. In the impugned order, there is not even a single finding directly on the invocation of extended period of limitation, therefore, in absence of the same, the invocation of extended period of limitation is unsustainable. In any case, the Impugned Order has imposed the penalty under Section 78 of the Act on the ground that relevant facts were not disclosed to the department and were detected only during the audit conducted by the Department. That is, the penalty under Section 78 has been....