Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2015 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 252 - AT - Service TaxDemand of service tax - Various services - Travelling expenses component of foreign currency expenditure - Held that:- In spite of noting that these expenses were on foreign trips of employees, the adjudicating authority states "but still no service tax has been paid by the party" without even mentioning for which taxable service. This is shoddy. In any case, the reimbursements made towards travelling expenses are not liable to service tax as there is no evidence that the same are in relation to any taxable service. - adjudicating authority has not undertaken any analysis of the appellants' submissions and merely records a fiat that the appellants are liable to pay service tax in spite of taking note of the appellants' submissions that they did not provide such services and merely reimbursed a part of marketing expenses. On the other hand, the appellants have been able to show that these amounts were actually expenses at their hands, which is also evident from the various schedules of profit and loss account, where they have been booked as expenses. Obviously, therefore, these expenses cannot be relating to the services rendered by the appellants also because if the appellants had actually rendered any such service, it would have generated an income for them and not expenses. Advertising and Marketing Expenses in Foreign Currency - The appellants claimed and submitted details showing that out of the expenses on advertising service, for payments made to various advertising agencies abroad, they have paid the service tax under reverse charge mechanism along with interest for the period 2006-07 to 2011-12. They had not paid service tax upto 2005-06 on such payments as the reverse charge mechanism came into effect with the introduction of Section 66A in the Finance Act, 1994 with effect from 18.04.2006. That the "reverse charge mechanism" did not have any legal basis prior to 18.04.2006 is no longer res integra and, therefore, idle parade of familiar judicial pronouncements in this regard (like Indian National Shipowners Assn Vs. Union of India) [2008 (12) TMI 41 - BOMBAY HIGH COURT] is avoidable - Appellant also asserted that they had not paid service tax on such foreign exchange expenses shown under this head which related to purchase of materials. In the absence of any evidence to the contrary, as the onus lies on the Department, it will have to be held that Revenue is not able to establish that any more service tax is leviable under this head than what has been discharged by the appellants along with interest. "Marketing Support" (including Marketing Support, Advertising and Sales Promotion) - adjudicating authority has not undertaken any analysis of the appellants' submissions and merely records a fiat that the appellants are liable to pay service tax in spite of taking note of the appellants' submissions that they did not provide such services and merely reimbursed a part of marketing expenses. On the other hand, the appellants have been able to show that these amounts were actually expenses at their hands, which is also evident from the various schedules of profit and loss account, where they have been booked as expenses. Obviously, therefore, these expenses cannot be relating to the services rendered by the appellants also because if the appellants had actually rendered any such service, it would have generated an income for them and not expenses. Income from lease of property - adjudicating authority in subsequent paras merely reproduced the legal definitions relating to "renting of immovable property service" "supply of tangible goods for use in India" and "Business Auxiliary Service" and thereafter simply moved on to the next component of demand namely "Income from Lease Vehicles" without even a whisper of any analysis and finding about the sustainability of this component of demand relating to what is called "Income from Lease of Property". This is nothing but a cavalier and careless attitude on full display. The appellants actually showed with reference to their profit and loss account that these were their expenses, which were incurred on leasing the immovable property for their use. Thus they were the recipient of the said service and therefore the question of they being liable to pay service tax is preposterous; it not being a case of import of service inviting reverse charge mechanism. It is admittedly unusual to copiously and verbatim quote paragraphs after paragraphs from the adjudication order. However, it was felt necessary in the present case to do so to drive home the point that the adjudicating authority has been highly and conspicuously non-speaking, non-reasoned, arbitrary and cavalier while passing the impugned order. Non-application of mind (on the part of the adjudicating authority) is indeed writ bold and large across the impugned order. Such orders adversely and severely impinge upon the public's trust in the public authorities and for that reason a public authority displaying such egregiously irresponsible conduct and that too while performing quasi-judicial functions deserves to the put to costs. Accordingly, we set aside the impugned order - Costs imposed - Decided in favour of assessee.
|