TMI Blog2019 (8) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... m the educational institute which was not required to be collected in terms of the exemption notification. The demand confirmed by the impugned order is required to be re-quantified after giving abatement towards the salary and wages and the contribution made towards EPF and ESI - the entire amount of the duty of service tax collected is required to be deposited with service tax, department which appears to have been done in terms of the submissions made on behalf of the appellant - penalty not justified. Appeal allowed by way of remand. - Service Tax Appeal No. 50779, 50780 of 2019 - DB - Final Order No. 50958-50959/2019 - Dated:- 1-8-2019 - Mr. Bijay Kumar, Member (Technical) And Ms. Rachna Gupta, Member (Judicial) Present for the Appellant: Shri Sudhir Malhotra, Advocate And Shri A.S. Hasija, Advocate Present for the Respondent: Shri Sanjay Jain, DR ORDER Per: Bijay Kumar : These appeals have been filed against the Order-in-Original No. 3/2019-ST dated 28.1.2019 passed by the adjudicating authority against the appellants. In the impugned order, the learned adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 25/2012-ST dated 20.6.2012 with effect from 1.7.2012. Various other statements were recorded from the other appellant, Shri J.S. Kalsi, who subsequently also agreed that the company has merged with another company and would be clearing the service tax dues at the earliest. Subsequently, following payments were made Challan dated 4.4.2014 - ₹ 2 lakhs Challan dated 7.4.2014 - ₹ 3 lakhs Challan dated 8.4.2014 - ₹ 1 lakh Challan dated 1.9.2014 - ₹ 5 lakhs Challan dated 7.10.2014 - ₹ 20 lakhs These payments were made towards the liability of service tax. After completion of investigation, a show cause notice dated 14.10.2014 was issued to the appellant which culminated into the impugned order. 4. Learned Advocate on behalf of the appellant submitted that the liability for the appellant is computed to ₹ 1,21,17,655/- out of which ₹ 20,87,891/- has already been discharged by the appellant and the same has been paid along with the interest. It was also submitted that this amount has been computed after claiming deductions made towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is not chargeable and not deposited to the Government exchequer. In this regard, reliance was placed on the decision of Hon ble Punjab Haryana High Court in case of Ajay Kumar Gupta Vs. CESTAT 2015 (39) STR 736 (P H), wherein it is held that once the assessee was not liable to pay under provisions of 68 of the Act, the penalty is not imposable under Section 76 of the Act. Further, penalty under 78 of Act also pertained to penalty for suppressing of value of the taxable services. Once the service tax was not leviable under Section 68 of the Act and the liability was only to deposit service tax under Section 73A(2) of Act ibid which has been done after delay, but due to the service being not taxable at the relevant time when the invoices were issued the case would not fall under the provisions of Section 78 of the Act for invoking penalty. Learned Advocate also pleaded that since the issue involved the interpretation of law the extended period of limitation is not invocable. Learned Advocate also submitted that this is a case where the learned adjudicating authority would have given the benefit of Section 80 of the Act which was valid up to 13.5.2015. As the appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) 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. (3) The gross amount charged for the taxable service shall include any amount received towards the taxable service before, during or after provision of such service. (4) Subject to the provisions of sub-sections (1), (2) and (3), the value shall be determined in such manner as may be prescribed Explanation.- For the purposes of this section,- consideration includes- any amount that is payable for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the taxable services provided or to be provided; (b) * * * (c) gross amount charged includes payment by cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and book adjustment, and any amount credited or debited, as the case may be, to any account, whether called Suspense account or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise. 8. Similarly, the provisions of 65(B)44 of Finance Act with effect from 1.7.2012 which is relevant is also reproduced as under: Section 65B(44) Service means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include (a) An activity which constitutes merely,- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) such transfer, delivery or supply of any goods which is deemed to be sale within the meaning of clause (29A) of article 366 of the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gross value for the computation of service tax liability in the hands of the appellant will not take into consideration the amount of contribution made by the service receiver M/s. HNGIL directly into the respective heads of account. Therefore, in our considered view, service tax demand cannot be confirmed on the employer s contributed amount towards P.F., E.P.F. and E.S.I. In this order the decision of Hon ble Tribunal in case of Neerv Jaisawal was also considered, which is referred in the impugned order and held to be inapplicable. In this regard, we also find that the Hon ble Allahabad High Court in the case of Security Services Vs. Union of India 16 (399) in Civil Writ Petition No. 437 of 1998 held that the respondent shall be entitled to charge service tax on the gross except after giving the abatement in respect of statutory levy and the tax is and if the same as the direct relation with the services rendered by the client and charged specifically in the bill. 10. As far as the abatement towards deduction of wages and salaries paid to the personal employees by the appellant is concerned, the same is covered by the decision of Mumbai Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, we find that the entire amount of the duty of service tax collected is required to be deposited with service tax, department which appears to have been done in terms of the submissions made on behalf of the appellant. Regarding the imposition of penalty, we find that the same is settled in favour of appellant by the decision of Hon ble Punjab Haryana High Court in the case of Ajay Kumar Gupta (supra). We also find that the decision of Hon ble Delhi High Court in case of Intercontinental Consultants (supra) has held that for arriving at the gross amount to be charged under Section 67 of the Act, only such amount is required to be included which is attributable towards the services rendered by the appellant, any other element, which is reimbursable in nature, is not required to be included for the purpose of computation of assessable value under Section 67 of the Act, as this decision has been upheld by the Supreme Court, we are of the view that the various statutory deduction the payment made towards salary and wages are, therefore, required to be deducted from the total amount charged by the appellant from the service recipient for the rendition of the service. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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