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2022 (11) TMI 47 - AT - Service TaxWorks Contract Service - It is contended that service receiver is a trust, a charitable trust registered under Section 12 A/12 AA of the Income Tax Act, providing service of education and are not involved in any commercial activities - whether the service tax has been rightly demanded as short paid or not paid? - HELD THAT:- Religious use includes providing of education, and medical aid, which reduces human suffering. Accordingly, it is held that the appellant is entitled to exemption with respect to aforementioned works contract service provided to the Trusts registered under Section 12A/12AA of the Income Tax Act. Thus, the demand of Rs.(2,52,912/- + Rs.1,75,512/-) or Rs. 4,28,424/- is set aside. Confirmation of duty of Rs. 55620/- demanded on sale of two numbers of completed houses - HELD THAT:- The Adjudicating Authority have recorded in para 10 of the Order-in-Original that the appellant had produced sale deed of completed house (s) situated at Saakar Hills. On perusal of the two sale deeds, are of completed/ fully furnished house to independent buyers for consideration. However, as per profit loss account, the appellant have received sale proceeds of Rs.69,50,000/- whereas the cost of construction is Rs. 65 lakhs. Hence, Court below have held liable to pay service tax on differential value of Rs. 4,50,000/-. Demand of Rs. 64,259/- with respect various civil constructions/maintenance works done for Narmada Gelatine Ltd. - HELD THAT:- The Adjudicating Authority observed that the appellant have taken irregular abatement and hence, have short paid the service tax. Accordingly, re-worked out, the taxable value on which service tax is payable, have mentioned in para 11&12 in the order-in-original and worked out differential value of Rs. 4,44,249/- on which tax payable was worked out at Rs. 54,909/- being service tax as short paid. Further, the Adjudicating Authority observed that as per profit & loss account, appellant have shown Rs. 42,08,078/- as income from Narmada Gelatine Ltd., Whereas, they have provided invoices of Rs. 41,32,431/- and accordingly on the differential amount Rs. 75,647/- demanded further tax of Rs. 9,350/- for want of invoice, work order, etc. - the appellant have rightly claimed abatement, accordingly they have paid their service tax liability being 50% of the tax payable. Admittedly, balance 50% of service tax is payable by Narmada Gelatine Ltd. being a corporate entity. Further, I hold that no service tax can be demanded on the differential value as per profit & loss account, of Rs. 75,647/-, as service tax is chargeable on accrual basis i.e. the liability occurs immediately on raising of the bill for the service provided or to be provided, whereas the appellant have maintained their account on cash basis/receipt basis. Accordingly, the demand of Rs. 64,259/- is set aside. Demand on other receipts as per profit & loss account Rs. 47 lakhs - HELD THAT:- The demand of tax has been made arbitrarily without relating the said receipt to any service provided, only on the allegation that the appellant did not provide any supporting documents with respect to the same and have demanded service tax of Rs. 5,85,920/-. The learned Counsel explains that the said receipt is in respect of construction of individual houses and the same is an exempted activity under the service tax provisions. Accordingly, the demand is hereby set aside. So far the demand of Rs. 18,540/- on house rent is concerned, it is found that no service tax is chargeable on house rent of residential premises. Thus, this demand of Rs. 18,540/- is set aside. Demand of Rs. 7,416/- with regard to tower rent - HELD THAT:- The said amount have been shown under the head “tower rent” but in actuality this has been received by way of compensation, and not towards any other service rendered. Thus, the demand of Rs. 7,416/- is set aside. The impugned order is set aside and the penalties imposed are also set aside - Appeal allowed.
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