Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 475 - AT - Service TaxClassification of services - Commercial or Industrial Construction service or works contract - Service provided to Vyavasayi Vidhya Pratisthan (VVP), Rajkot and Sewa Bharti, Ahmedabad for construction of VVP Engineering college and Saraswati Shishu Mandir - Benefit of cum-tax value for determination of assessable value - TDS deducted by the recipient has to be considered as part of the taxable value or not - extended period of limitation - HELD THAT:- Hon’ble Apex Court in the case of M/S. TOTAL ENVIRONMENT BUILDING SYSTEMS PVT. LTD. VERSUS THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES & ORS., YFC PROJECTS PVT. LTD. VERSUS UNION OF INDIA, M/S. G.D. BUILDERS VERSUS UNION OF INDIA & ANR., M/S. NATIONAL BUILDING CONSTRUCTION CORPORATION LTD. (NBCC) VERSUS UNION OF INDIA & ANR., M/S. UNITECH LTD. VERSUS UNION OF INDIA & ORS., M/S. NATIONAL BUILDING CONSTRUCTION CORPORATION LTD. (NBCC) VERSUS UNION OF INDIA & ORS., M/S. LARSEN AND TOUBRO LTD. VERSUS COMMISSIONER OF SERVICE TAX, DELHI, COMMISSIONER OF SERVICE TAX MUMBAI - II VERSUS M/S. IOT INFRASTRUCTURE & ENERGY SERVICES LIMITED, M/S. L&T HYDROCARBON ENGINEERING LIMITED (PREVIOUSLY KNOWN AS LARSEN & TOUBRO LIMITED) VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [2022 (8) TMI 168 - SUPREME COURT] has held that prior to 01.06.2007, service tax levy was applicable to service contracts simpliciter and not to indivisible works contract which contained both the elements of transfer of property in goods as well as labour and services and same were brought under the service tax net for the first time on 01.06.2007. The contention of the appellant not agreed upon that service provided by them to M/s. Suzlon Infrastructure Limited and M/s. Suzlon Infrastructure Service Limited are also classifiable under the category of "Erection, Commissioning or Installation" service under Section 65(105)(zzd) Act, in addition to "Commercial or Industrial Construction" service. Service provided to Vyavasayi Vidhya Pratisthan (VVP), Rajkot and Sewa Bharti, Ahmedabad for construction of VVP Engineering college and Saraswati Shishu Mandir - HELD THAT:- Merely for the reason that some fee is charged by them from the students does not make them “commercial organizations”. These organizations need to charge fees from the students to meet their organizational expenses and the same cannot be criteria for determination that the same is for purposes of profit. No evidence has been brought on record that the profits are appropriated for benefits of the individuals or trustees of the organisation. Therefore, construction services provided Vyavasayi Vidhya Pratisthan (VVP), Rajkot and Sewa Bharti, Ahmedabad were not taxable. Benefit of cum-tax value for determination of assessable value - HELD THAT:- Where the appellant has not issued a taxable invoice, and the services have been held to be taxable later-on as a result of investigation, the gross value charged by the appellant has be considered as “cum-tax value” under rule 67(2) of the Act which reads as “where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged”. Whether TDS deducted by the recipient has to be considered as part of the taxable value or not? - HELD THAT:- TDS is nothing but part of the taxable value which comes back to the service provider in terms of the income tax deposited by the recipient. Thus the same is taxable and shall be part of the “gross amount charged” as given in explanation (c) to Section 67 of the Act. The appellant has further disputed the taxability of the two invoices which they claimed that the same were for raised for use of JCB and tractors on rental basis and were covered under the service of “"supply of tangible goods for use" which was not covered under the Act at the relevant time. The Ld. Commissioner has rejected the claim on the ground that invoices produced are dated 8.6.2007 & 10.06.2007 and not 15.03.2007 as claimed by the appellant - the appellant should be given a chance to clarify to the adjudicating, the above discrepancy. Appellant has further claimed that an invoice Rs. 3000/- and invoice Rs. 4,00,000/- which has been computed twice pertain the service was provided prior to 10.09.2004 when the impugned service of “construction” was brought into the service tax net. The claim has been rejected by the Ld. Commissioner on the ground that the appellant could not produce documents that the service was provided prior to 10.09.2004 - the appellant should be given a chance to submit necessary evidence to the adjudicating authority. Extended period of limitation - applicability of proviso to Section 73(1) of the Act - HELD THAT:- The extended period is applicable qua the demand which would be worked out keeping in view the above observations as there is a clear cut case where the appellant had deliberately chosen not to pay the tax whereas he was fully aware of his tax liability. Interest provisions under Section 75 of the Act and Penalty provisions under Section 78 and 76 of the Act will also be attracted. However, penalty under Section 76 of the Act will not be attracted for demand which may pertain to the period from 10.05.2008 in view of the amendment to Section 78 by the Finance Act, 2008. Penalty under Section 77(2) is also held to be imposable for failure to file the service tax returns. The matter should be remanded back to the original adjudicating authority for redetermination of the demand in view of the findings. The appellant would be allowed to produce any documents which may be required in the interest of justice - appeal allowed by way of remand.
|