TMI Blog2022 (12) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax and excise duty from its clients but paid the same to the Government and claimed it as business expenditure under commercial expediency to comply with the taxation provisions of the Government. It is not also a case of the A.O that the assessee recovered the amount from Vishakhapatnam Steel Plant and contract manufactures and did not pay the same to the Government or the assessee has wrongly claimed impugned amounts as revenue expenditure because the assessee had already recovered the same from Vishakhapatnam Steel Plant and contract manufacturers. In the situation when the assessee complying with the provisions of indirect taxation and deposit the service tax and excise duty to the exchequer as applicable to the business ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the year they relate and consequently the disallowance of deduction of Rs. 35,11,225/- as claimed by the assessee, is arbitrary, unjust and contrary to the provisions of the Act. 3. The Ld. Counsel of the assessee did not pressed legal ground no. 1 and the same is dismissed has not pressed. 4. Regarding ground no. 2 the Ld. Counsel of the assessee, in the written submissions submitted as under:- 9. That as per the provision of Section 68 of the Service Tax Act, it is clear that under the Act it is the liability of service provider to pay the service tax - whether being charged or not. 9.1 As per Rule 6A of the Service Tax Rules, the service tax shall be paid to the credit of the Central Government by the fifth day of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has not only to investigate the facts but even the law and the principle of commercial expediency which requires a long drawn process of reasoning which is not permissible u/s 154 of the Act. 10. That in the case of Tupperware India (P) Ltd. vs. CIT in 234 Taxman 56 (Del), the Hon'ble Jurisdictional High Court has held that the taxes and duties payable by third person but have been paid by an assessee, in the interest of his business on account of commercial expediency during the course of his carrying out business, is an allowable deduction as a business expenditure. In the case of Tupperware (supra), the said assessee entered into a contract manufacturing agreement with others. The Excise Authorities had cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking the addition in the hands of the assessee. 6. Placing rejoinder to the above submissions the Ld. Counsel of the assessee preciously reiterated the written submissions and submitted that the assessee is a service provider to Vishakhapatnam Steel Plant and liability to pay make payment of service tax is on the shoulders of the assessee provider as per section 68 of Service Tax Act r.w.r.6A of Service Tax Rules. The Ld. Counsel submitted that the Assessing Officer is incorrect to say that service tax liability is not of the assessee but of the Vishakhapatnam Steel Plant. The Ld. Counsel vehemently pointed out that it is not a case of the A.O that the assessee has not paid the service tax to the Government exchequer but he has made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of the assessee whether reimburse by the clients or not. In the present case impugned amounts of service tax and excise duty was paid by the assessee to the exchequer but could not reimburse from the clients due to reasons beyond control of the assessee. Therefore the assessee is entitled to claim it as revenue expenditure under commercial expediency. 7. On a careful consideration of rival submissions from the assessment order we observe that it is not a case of the Assessing Officer that assessee did not pay service tax or excise duty to the exchequer and the A.O has not invoked provisions of section 43B of the Act. The main contention of the Assessing Officer is that the liability to pay excise duty and service tax is not of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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