Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 1696 - CESTAT MUMBAIReverse charge mechanism - Site formation and clearance, excavation and earthmoving and demolition service - denial of the existence of recipient of service and of consideration having been received from such recipient - HELD THAT:- The appellant had commenced the generation and removal of scrap in June 2008 after the possession was handed over to M/s Goldbrick Infrastructure Pvt Ltd by the vendor in February 2008 and in pursuance of ‘memorandum of understanding (MoU)’ dated 20th July 2007, well before the tender process was completed, between themselves and M/s Goldbrick Infrastructure Pvt Ltd. It is now well settled law that, for a service to be taxable prior to 1st July 2012, conformity with the enumerations in section 65 (105) of Finance Act, 1994, comprising description of activity, identified recipient and consideration for such service, is unavoidable. The assigning of land to M/s Goldbrick Infrastructure Pvt Ltd was contingent upon the vendor being paid the value bid by the appellant in which there seemed to be no further role for the appellant. M/s Goldbrick Pvt Ltd did not have to bear the cost of tendering met by the appellant but, owing to the circumstances of the interlinked transactions, that was merely considered to be payment made by the appellant to the vendor for rights over the structures and machinery on the land. Acknowledgement of that as a separate transaction in which M/s Goldbrick Infrastructure Pvt Ltd had no participation was not difficult as they appeared to have interest only on the land. Consequently, the acknowledgement of the appellant having paid the cost of participation does not, of itself, lead to the conclusion that this was a payment effected to the appellant - It would, therefore, appear that the conformity of demolition and removal with the description of the taxable service along with the fortuitous possession of all the structures and machinery on the property by participation, and bearing of cost, in the tender process has prompted the confirmation of the tax liability by the adjudicating authority without ascertaining the existence of an agreement, oral or otherwise, for rendering of any service that is exclusively to benefit M/s Goldbrick Infrastructure Pvt Ltd by the appellant. The computation of value of taxable service as the sale value of scrap, adjusted for tax under Finance Act, 1994, appears to be erroneous inasmuch as that was consideration for a transaction not contemplated in Finance Act, 1994. It has been recorded in the impugned order that cost of participation in the tender which benefited M/s Goldbrick Infrastructure Pvt Ltd was consideration for the removal of structures, machinery and buildings on the property. If at all, there was consideration only this could have been it and not the sale value. There is nothing on record to establish that the costs incurred approximated the sale value. Consequently, the receipt from sales is consideration for the sales and not for service. The existence of consideration for service is not on record. There being neither recipient of a service nor any consideration for a service, the impugned order lacks authority of law and a set aside - Appeal allowed - decided in favor of appellant.
|