TMI Blog2023 (12) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... was a back to back arrangement. Under section 67(1) of the Finance Act the gross amount charged is for service provided or to be provided. The returnable security deposits are collected for business reasons by the service providers during the subsistence of the contract and they are refunded to the recipient when the contract is completed/terminated. This amount, therefore, cannot be for services and service tax would not be leviable - The submission advanced by the learned counsel for the appellant also deserves to be accepted. The amount collected as imprest from the customers is towards various expenditure incurred during the provision of services such as hotel, food and telephone bills. This expenditure or costs incurred by the service provider in the course of providing the taxable service cannot be considered as the gross amount charged by the service provider for such service provided by him, and accordingly not taxable under section 67 - it is not possible to sustain the demand confirmed by the Commissioner. The penalty and interest, therefore, cannot also be sustained. It would, therefore, not be necessary to examine the contention raised by the learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Year Year end advance figure as per balance sheet Service tax proposed 2006-07 3,35,37,005 41,04,927 (at 12.24%) 2007-08 1,39,59,012 17,25,334 (at 12.36%) 2008-09 1,00,52,107 12,42,440 (at 12.24%) 2009-10 29,17,317 300,484 (at 12.24%) 2010-11 29,69,317 305,839 (at 12.24%) Total 6,34,34,758 76,79,024 (ii) Non intimation of adjustment of service tax: In the ST-3 Return for the period April-Sept 2007, the appellant claimed adjustment of excess service tax paid during earlier periods to the tune of Rs. 58,17469/-. Such adjustment was not permissible under rule 6 (4B) of the Service Tax Rules, 1994 the 1994 Rules since the appellant had not filed intimation with the service tax department. Accordingly, service tax demand of Rs. 58,17,469/- was proposed; and (iii) The exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Shri Harshvardhan, learned authorized representative appearing for the department, however, supported the impugned order and submitted that the Commissioner, after referring to the contract dated 15.12.2004 entered into by the appellant with ICICI Bank, correctly held that the amount received by the appellant were advances and, therefore, service tax was required to be paid. Learned authorised representative also submitted that the Commissioner was justified in denying adjustment of excess payment of service tax for the reason that intimation was not filed by the appellant before the Jurisdictional Officer. 10. The submissions advanced by the learned counsel for the appellant and the learned authorised representative appearing for the department have been considered. 11. The first submission that is required to be examined is whether the Commissioner committed an error in confirming the demand of service tax when, according to the appellant, service tax had been paid on all the collections received during the relevant period. 12. According to the appellant, the year-end balance is the closing figure of any general ledger and the year-end balance is not a receipt nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. The figures stated by the appellant had also been duly verified by a Chartered Accountant and a certificate had also been issued. This certificate was not accepted by the Commissioner merely because the appellant did not substantiate it with invoices and other relevant records. What needs to be noticed is that the certificate issued by the Chartered Accountant is based on documents, namely the bank statement, TDS statement and the service challans. The Tribunal has repeatedly held that a certificate issued by the Chartered Accountant is admissible as evidence for factual information and without rejecting the same, it cannot be brushed aside. 17. The appellant had also pointed out in the written submissions dated 30.08.2011 filed before the Commissioner that the balances for the financial years 2009-10 and 2010-11 pertained to refundable security deposits, on which transactions service tax had been paid. According to the appellant, out of the total advance amount of Rs. 6,34,34,758/-, an amount of Rs. 3,51,83,392/- was on account of refundable security deposits and no service tax was leviable on these deposits. 18. The Commissioner failed to properly appreciate the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the service provider in the course of providing a taxable service form an integral part of the taxable value and rule 5 of the Service Tax (Determination of Value) Rules 2006 the 2006 Rules has been relied upon for this purpose. 22. The submission advanced by the learned counsel for the appellant also deserves to be accepted. 23. The amount collected as imprest from the customers is towards various expenditure incurred during the provision of services such as hotel, food and telephone bills. This expenditure or costs incurred by the service provider in the course of providing the taxable service cannot be considered as the gross amount charged by the service provider for such service‟ provided by him, and accordingly not taxable under section 67. 24. In this connection reliance can be placed on the decisions of the Supreme Court in Commissioner of Service Tax vs. Bhayana Builders (P) Ltd. 2018 (10) G.S.T.L. 118 (S.C.) and Intercontinental Consultants Technovrats Pvt. Ltd. vs. Union of India 2013 (29) S.T.R. 9 (Del.) . The Supreme Court upheld the judgment of the Delhi High Court that had struck down rule 5(1) of the 2006 Rules to the extent it included t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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