TaxTMI 
TaxTMI 
2026 (6) TMI 643
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....ce of the Departmental officers, the appellant deposited an amount of Rs.4,34,786/-. 3. A Show Cause Notice was issued to the appellant on 19.04.2017 for the period from 31.03.2012 to 2014-15 demanding Service Tax totally amounting to Rs.2,49,84,491/-, along with interest and penalties. The Show Cause Notice made the following allegations: - a. Short payment of Service Tax on 'site formation and clearance, excavation and earth moving and demolition service', 'works contract service' and 'manpower recruitment and supply agency service' to the tune of Rs. 2,17,28,062/- for the period from 31.03.2012 to 2014-15. b. Short payment of Service Tax payable under reverse charge mechanism (RCM) against manpower supply service of Rs.32,56,429/- from 2012-13 (July 2012) to 2014-15. 3.1. The Show Cause Notice also proposed appropriation of the amount of Rs.4,34,786/- already paid by the appellant. 4. The instant Show Cause Notice was adjudicated vide the impugned order dated 14.12.2017 wherein the Ld. Commissioner has upheld the entire tax demand proposed in the above Notice, along with interest and penalties. 5. Regarding the demand of Service Tax of Rs.2,15,03,80....
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....has been pointed out that the entire issue is revenue neutral as they were eligible to avail CENVAT Credit immediately upon payment of Service Tax; that said demand has been made by invocation of the extended period of limitation. It is argued by the Ld. Counsel for the appellant that the extended period of limitation cannot be invoked in cases of revenue neutrality as has been consistently held by the Tribunal in several decisions. It is further submitted in this regard that the said demand pertains to the period from 01.07.2012 to 31.03.2015 whereas the Show Cause Notice raising the above demand was issued on 19.04.2017, which is after a lapse of more than two years after filing of the ST-3 Return for the period 2014-15. Accordingly, it is their case that the entire demand in this regard is barred by limitation. In support of their contentions, the appellants relied upon the decision of the CESTAT in the case of M/s. Samsung Electronics India Pvt. Ltd. v. Commissioner of Central Taxes and Central Excise, Gautam Buddha Nagar [Final Order Nos. 7016870169 of 2026 dated 19.05.2026 in Service Tax Appeal Nos. 70080 and 70202 of 2020 - CESTAT, Allahabad]. 5.4. In view of the above su....
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....01415] under the category of 'works contract service' for the period under dispute. The appellant has also furnished before us the details of Service Tax payments made by them for the corresponding Financial Years, which are reproduced below for the sake of ready reference:- ▪ Financial Year 2012-2013: SL No. Date CIN BSR Challa n No Service Tax E Cess H E Cess Total 1 14.09.2012 00053471409201200000 0005347 00029 1,27,268.00 2,546.00 1,273.00 1,31,087.00 2 03.10.2012 00053470310201204591 0005347 04591 90,849.00 1,817.00 909.00 93,575.00 3 05.01.2013 00053470501201301061 0005347 01061 1,20,000.00 2,400.00 1,200.00 1,23,600.00 4 23.04.2013 00053472304201300128 0005347 00128 1,80,000.00 3,600.00 1,800.00 1,85,400.00 5 28.08.2013 00053472808201300659 0005347 00659 1,48,010.00 2,960.00 1,480.00 1,52,450.00 TOTAL 6,66,127.00 13,323.00 6,662.00 6,86,112.00 ▪ Financial Year 2013-2014: SL No. Date CIN BSR Challan No Service Tax E Cess H E Cess Total Tax ....
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....herefore, are no longer matters of dispute, having been duly acknowledged by the adjudicating authority itself. 9.3. Once the aforesaid deposit of Rs.4,34,786/- stands admitted on record and appropriated in the adjudication proceedings, the differential amount of Rs.35,142/- is liable to be adjusted therefrom. Consequently, we find that the entire demand of Service Tax along under the category of 'works contract service' stands paid by the appellant. Accordingly, we hold that no further demand over and above the amount of service tax paid by the appellant (including the amount adjusted hereinabove), is sustainable. 10. Regarding the demand of Service Tax of Rs.40,46,439/- under the category of 'manpower recruitment or supply agency service', the contention of the appellant is that the liability to Service Tax on their part, if any, for the said service, would only be on 25% of the service value, which has already been discharged by the appellant. The Service Tax payable on 25% of the value of such services has been computed by the appellant, which has been tabulated below: - Service Amount (25%) of service value Service Tax actually payable ST actually paid ....
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.... 1 10.06.2014 000534710062 01400191 0005347 00191 13,85,307.00 27,706.00 13,853.00 21,94,174 2 15.07.2014 000534715072 01400604 0005347 00604 7,44,959.00 14,899.00 7,450.00 TOTAL 21,30,266.00 42,605.00 21,303.00 ▪ Financial Year 2014-2015: Sl. No. Date CIN BSR Challan No Service Tax Educational Cess Higher Educational Cess Total Service Tax 1 23.08.2014 0005347230820 1400528 0005347 00528 5,49,944.00 10,999.00 5,499.00 17,95,036 2 23.08.2014 0005347230820 1400333 0005347 00333 4,93,971.00 9,879.00 4,940.00 3 23.08.2014 0005347230820 1400339 0005347 00339 1,27,164.00 2,543.00 1,272.00 4 23.08.2014 0005347230820 1400340 0005347 00340 74,182.00 1,484.00 742.00 5 31.01.2015 0005347310120 1502644 0005347 02644 3,43,710.00 6,874.00 3,437.00 6 30.03.2015 0005347300320 1516047 0005347 16047 1,53,782.00 3,076.00 1,538.00 TOTAL 17,42,753.00 34,855.00 17,428.00 10.3. We have gone through the....
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....ance amount, if any, available from the amount of Rs.4,34,786/- deposited by the appellant. 11. Regarding the Service Tax of Rs.32,56,429/demanded under reverse charge mechanism in respect of manpower recruitment or supply agency services received by the appellant from unregistered parties, it is seen that the said demand has been raised by invocation of the extended period of limitation. Admittedly, we note that once the Service Tax liability on the said services is discharged by the appellant, the same would be available as CENVAT Credit to the appellant. Thus, it is observed that the issue involved creates a revenue neutral situation. It is a settled position of law that in revenue neutral situations, no demand of Service Tax can be sustained, in view of various judicial pronouncements on the issue. In this connection, we find it pertinent to refer to the decision of the CESTAT at Allahabad in the case of M/s. Indus Valley Partners (India) Pvt. Ltd. v. Commissioner of C.G.S.T., Noida [Final Order No. 70026 of 2024 dated 17.01.2024 in Service Tax Appeal No. 70010 of 2021 - CESTAT, Allahabad], wherein it has been observed as under: - "9. We find that the main contentio....
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....ty case and as such no demand is sustainable." Thus applying the ratio of the decision cited supra, the demand confirmed under the said category is liable to be set aside on the ground of revenue neutrality. 11.1. Furthermore, the above demand raised pertains to the period from 01.07.2012 to 31.03.2015 whereas the Show Cause Notice for the same was issued on 19.04.2017. We find that no evidence has been adduced by the Revenue to substantiate the allegation of suppression of fact or wilful mis-statement on the part of the appellant with the intent to evade payment of Service Tax in this case so as to justify the invocation of extended period of limitation for raising the present demand. In fact, being a revenue neutral situation as observed hereinabove, there was no case for the Revenue to invoke the extended period provisions in the present case. Considering the above, we are of the view that the extended period of limitation cannot be invoked in the facts and circumstances of the case and consequently, the demand confirmed under this category by invoking the extended period of limitation does not survive. Therefore, the demand confirmed by invoking the extended period of lim....