TMI Blog2018 (5) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... favor of assessee. Demand of service tax on the TDS amounts and not included by the assessees - Held that: - there is no doubt that these amounts are required to be included in the assessable value - there are merits in the submission of the Ld. Advocate that they would be eligible for 67% abatement on the amount of TDS and accordingly the service tax liability is required to be re-quantified - matter on remand. Penalties - Held that: - it cannot be denied that the issue was very much mired in confusion and litigation for quite some time. In the circumstances, there was reasonable cause on the part of the assessee in his failure to discharge tax liability on the portion of the TDS amounts - penalty set aside. Appeal allowed in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erged that assessee had provided commercial or industrial construction services to educational institutions like schools and colleges for the period 23.08.2007 to 31.03.2009 but were not discharging any tax liability thereon. Department took the view that the gross amount charged and received from such educational institutions are taxable and that assessees have not paid service tax of ₹ 41,09,392/- on these activities. (3) Non-inclusion of TDS amounts in taxable value. It emerged that assessee had received payment from the service recipients who had deducted certain amounts towards income, namely, Tax Deducted at Source (TDS). Assessee were discharging service tax on the amounts so deducted by service recipients towards the TDS. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions which can be briefly summarized as under : i) The assessee had provided the services under the category of Commercial or Industrial Corporation Service taxable under Section 65 (25b) read with Section 65 (105) (zzq) for the period from 1.10.2004 to 31.3.2009. ii) During the course of oaudit of accounts of the assessee by the officers of Internal Audit of Cental Excise Commissionerate, Madurai, it was noticed that assessees were providing Commercial or Industrial Construction Services to various receivers like Schools, Colleges, Textile Mills and Nursing Homes etc. Scrutiny of the accounts revealed short payment/non payment of service tax i.e. (i) the assessee had availed 67% abatement in taxable value under Notifications 15/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt deducted by service recipient. He however submits that assessee is eligible for 67% abatement on the amount of TDS which has not been extended to them. For this reason, Ld. Advocate submits that the matter may be remanded to the adjudicating authority for re-quantification of the demand in respect of TDS after permitting the abatement of 67%. vi) On the issue of inclusion of value of goods / materials supplied free of cost, the matter has been settled by the Hon‟ble Supreme Court in the case of CST Vs Bhayana Builders Pvt. Ltd. - 2018 (10) GSTL 118 (SC) holding that value of such goods cannot be added in taxable value. Therefore, the assessee had rightly excluded the value of cement and steel etc. supplied free of cost by the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble value. With regard to department appeal ST/181/2011, Ld. A.R reiterated the grounds of appeal. 5. In response, Ld. Advocate Shri M. Kannan submits that issue of taxability on CICS service provided to educational institutions has been decided in favour of the assessee in a number of Tribunal decisions. Ld. Advocate also submits that there is no infirmity in the decision of Commissioner not to impose penalty under Sections 76 77 ibid. In fact, considering the fact that except for TDS both the other demands are not sustainable, there can be no penalty imposed on the assessee even under Section 78 also since the entire issue was only one of interpretation. 6. Heard both sides and have gone through the facts. 7. We find merit in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, the department has come in appeal against the non-confirmation of the demand by the adjudicating authority. We are not able to find any force in the grounds of the Revenue. This particular issue has been addressed in a number of Tribunal decisions and decided in favour of the assesse, for example in the following cases : (1) SRM Engg. Construction Ltd. Vs CST 2018 (11) GSTL 174 (Tri.-Chennai) (2) Ratan Das Gupta Co. Vs CCE 2017 (3) GSTL 247 (Tri.-Delhi) (3) CST Vs S.M. Sai Corporation 2016 (42) STR (Tri.-Mumbai) Accordingly, no merit is found in the department appeal on this issue and it is rejected. We also find that the only demand that survives is that of non-inclusion of TDS deducted by the service recipient. N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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