TMI Blog2018 (8) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no point in placing certain manpower service provided by the service provider whose firm names are referred in the audit report in those categories without any basis - raising of bills/ invoices and mentioning of percentage of tax payable by the service provider and service recipient, by the service provider itself would form the basis of identification of service providers, if they fall under those specified categories or under threshold limit in the organised sector and such a basis is found absent in the entire proceeding initiated against the appellant. Appeal allowed - decided in favor of appellant. - Appeal No. ST/85857/2018 - Order No. A/86980/2018 - Dated:- 26-7-2018 - Hon ble Dr. Suvendu Kumar Pati, Member ( Judicial ) Shri Jay Chedda, CA for the appellant Shri Dilip Shinde, AC (AR) for the respondent ORDER Non-payment of 75% of service tax applicable on invoice value raised against supply of manpower and agency service by the appellant as recipient under partial reverse charge mechanism is under challenge in this appeal directed against the order passed by the Commissioner (Appeals) holding such non-payment as violation of rule contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing challenged in this forum. 3. In the memo of appeal and during course of hearing of appeal, the ld. CA for the appellant Shri Jay Chedda, urged to set aside the Order-in-Appeal and grant refund of service tax paid in compliance to audit direction along with applicable interest on the grounds narrated above along with additional ground that interest service liability has been discharged by the service provider as well as by the appellant himself as service recipient before issue of such show-cause notice. Further, such bifurcation of service tax liability in the ratio of 25:75 could not be done by them as it was a new levy and there was no clarity regarding imposition of service tax but in citing case laws reported in 2008 (9) STR 350 and 2008 (10) STR 5(Bom), he pleaded that penalty under Section 78 is not mandatory in view of Section 80 of the Finance Act, 1994. He further argued that in view of CBEC circular no. 984/8/14-CX date d16.09.2014 pre-deposit made in response to compliance of audit is refundable and since such payment would amount to double taxation, the order of the Commissioner(Appeals), being contrary to the principle laid down in case laws cited supra is liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice as well as value of taxable service provided or agreed to be provided and the service tax payable thereon inclusive of service tax payable by service provider and Notification 33/12-ST dated 30.06.2012 indicates that if the turnover of the service provider is less than 10 lakhs, the service recipient shall be obliged to pay his share of service tax (of the service provider also) under the partial reverse charge mechanism. There is no denial of the fact that the idea behind introduction of this procedure was to bring unorganised sector on record so that the proper books of account are maintained by them, even though they are not aware about the various statutory liability cast on them and the same will remove the difficulty of the government in tracing out the service provider who are liable to pay service tax. But as commented by Ms. S. Sharma in her article on reverse charge mechanism published in the Chamber Journal of December 2012 at page 95, this system would bring lot of confusion and uncertainty and among them the first would relate to identification of such vendors. In other words, whether the service provider is from an organised sector or unorganised sector, it wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Further principal and agent relationship are based on contract for discharge of certain act in a specified manner and no such contract or agreement or MOU is placed before the court to substantiate that the service providers were assigned with the task of collecting the part of applicable tax from the appellant i.e. from the service receiver for necessary payment to the revenue authority. 8. During course of argument, ld. AR for the respondent department emphasised on the finding of the Commissioner of Appeals made in the impugned order that assessee can contractually transfer their service tax liability to a third party but on no account thereof, can ask the revenue to recover it from third party or waived off discharge of liability till they receive it from contractors and therefore the assessee had to discharge service tax liability in terms of statutory provisions. With great respect to the decision found mentioned in the impugned order, it can be said that dispute in respect of the present appellant is not about recovery of tax liability made available with the third party since the audit report itself indicates that the entire amount was collected by the service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
