TaxTMI 
2026 (11) TMI 143
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndertakings and government projects for providing aforementioned various services and had also engaged subcontractor for providing such services. 2. During the audit of appellants' records for the period from February 2014 to January 2017 department observed that the appellants had received various services as that of manpower Supply Service, Rent a Cab Service, Works contract Service and Security Guard Services, however the appellant had not discharged service tax liability in accordance to notification 30/2012 St dated 20 Jun 2012. According to the said notification in case of receiving manpower Supply Service 75 Per cent of service tax was to be paid by the appellant/service recipient 100 per cent liability of service tax was of the recipient/appellant in respect of receiving legal services. Notification 30/2012 requires the service recipient/appellant, to pay 40 per cent of the service tax the said liability got increased to 50 per cent with effect from 01.10.2014. For receiving works contract services also recipient liability to pay service tax is to the extent of 50 per cent. However the appellant was found to have not discharged the liability in the aforesaid manner a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uting the demand on legal service, rent a cab service and security guard services. While objecting the confirmation of service tax demand with respect to receiving Manpower Supply Service and Works Contract Services under RCM, learned counsel has submitted that appellant is a public sector undertaking which entered into a contract of supplying skill/unskilled labour to other public sector undertakings. It is further mentioned that the appellant company had paid service tax as service provider also on supply of Manpower service and Works contract service. Demanding service tax on the same services again under the reverse charge basis is bad in law. The demand of tax of Rs. 10, 24, 36,985/- under the category of Manpower Supply and of Rs. 11, 74,135/- under the category of WCS under reverse charges mechanism is objected on two grounds. Firstly that the appellant are not the recipient of the service but are the intermediary between the sub-contractors and the recipient public sector undertakings. The sub contractors are the service provider and the other PSUs like the Bhilai Steel Plants are the recipients of the said service. Secondly, the appellant had paid the service tax of Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ai Steel Plants and TATA Steel Authority) etc. In such circumstances the appellant cannot take the plea of it being an intermediary between its sub-contractors and the other PSUs the final service recipients nor can take the plea of discharging service tax liability as service provider on the very same service. The findings to these fact in the impugn order, therefore, have no infirmity. The Plea of revenue neutrality also does not extinguish the primary tax liability. With respect to invocation of extended period of limitation, Learned DR has submitted that the as per audit the appellant was found to have declared lower taxable value in its service tax return then the value in their own ledgers. The said under declaration is rightly held to not be a mere interpretational dispute but a concrete non-disclosure of taxable value. The extended period as rightly been invoked while issuing the impugn show cause notice number 30 of 2012 clearly defines the service recipients liability to pay service tax with respect to services mentioned therein to such extent/percentage has mentioned therein. Hence the appellant is not allowed to take the benefit of any interpretational dispute. With the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant was receiving both those services from the sub contractors. These facts, to our opinion, takes the position of the appellant outside the scope of intermediary. The education guidance note of June 20, 2012 has also clarified the meaning of intermediary in para 5.9.6 thereof. The definition of intermediary has been analyzed in the following manner: 1. An intermediary arranges or facilitates a provision of a 'main service' between two more persons; 2. An intermediary is involved with two supplies at any one time: (i) the supply between the principal and the third party; and (ii) the supply of his own service (agency service) to his principal, for which a fee or commission is usually charged; 3. An intermediary cannot alter the nature or value of service, the supply of which he facilitates on behalf of his principal, although the principal may authorize to negotiate a different price; 4. The consideration for an intermediary's service is separately identifiable from the main supply of service that he is arranging and is in the nature of fee or commission charged by him; 5. The test of agency must be satisfied between t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erstanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. Therefore, whenever, the tax or duty is revenue neutral at the hands of the same assessee, i.e., where it had to pay tax or duty with one hand and could take credit with the other, there cannot be any intent to evade and for that reason, extended period of limitation cannot be invoked. This has been the consistent position in various judgments. Secondly, there is no dispute that the appellant was registered with the depar....