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2022 (4) TMI 990 - AT - Service TaxRecovery of Service tax - amount received by the appellant in the form of reimbursement expenses - taxable amount or not - HELD THAT:- The demand of reimbursement expenses as was proposed by the Show Cause Notice has already been dropped. The findings have been confirmed by the Commissioner (Appeals). No appeal has been preferred by the Department, thus said findings have attained finality. Taxability - amount of discount received by the appellant from M/s. Obsurge Biotech Ltd. - applicability of negative list of service Section 66D of the Act - HELD THAT:- It is observed that the Adjudicating Authority has proceeded on the presumption that the amount in question has been obtained as consideration received for providing the taxable service. There is no denial that the appellant was providing taxable service but the impugned amount is the amount of discount. Hence, it was for the adjudicating authority to first decide whether the amount is towards the consideration of service provided as of pure agent. That Commissioner (Appeals) has held that cash discount since is given on the sales value, hence it is part of the given purchase - Commissioner (Appeals) in paragraph 7 of the order has specifically mentioned that the amount of discount is not related with the service. Still applying section 66 D of Service Tax Act for confirming the service tax on this amount, is therefore held to be a wrong finding. As relied upon by the learned Counsel of the appellant clause 11 of the agreement of the appellant with its client, the amount discounted is to be 2.5% of the sale value. Hence the said amount cannot be considered as the amount of consideration for providing any taxable service by the appellant to its clients - The issue is otherwise no more res integra. This Ahmadabad Bench of this Tribunal in the case of M/S. TRADEX POLYMERS PVT LTD VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [2011 (12) TMI 398 - CESTAT, AHMEDABAD] has held that incentives like cash discounts cannot be considered as amount for providing taxable service - demand of service tax on the amount of discount received by the appellant has wrongly been confirmed by the adjudicating authority. Same is accordingly liable to be set aside. Levy of Service Tax - pure agent services - amount of commission received by the appellant - HELD THAT:- There is no denial on the part of the appellant that it was rendering the taxable service as that of pure agent by entering into the agreement with M/s. Obsurge Biotech Ltd. The agreement clarifies that the amount received as commission was very much the part of the amount of consideration received for providing the said services. However, as brought to notice the Notification No. 33/2012 dated 20.6.2012, it is observed that the exemption from payment of service tax has been provided to small scale providers i.e. the one whose value of taxable service in the proceeding year had not exceeded ₹ 10 lakh. From the table as given in the order above it is clear that year 2013-14 is the preceding year for 2014-15 when the value of taxable service rendered was less than ₹ 10 lakh. Hence the exemption of said Notification shall definitely be available to appellant from paying service tax on the value of taxable service received by him in the year 2014-15 - However, with reference to the demand of service tax for year 2013-14, there is no data about the taxable income received by appellant in the preceding year of Financial year 2013-14 (financial year 2012-13). In absence of any documents for the same, the benefit of exemption in the above said notification from payment of service tax cannot be extended for the amount of commission received by the appellant during the financial year 2013-14 - to the extent demand stand confirmed i.e. on the amount of commission of ₹ 8,66,472/-. The order under challenge is upheld to that extent. Appeal allowed in part.
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