9911796707
TMI Blog2024 (9) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... ruitment or Supply Agency Service and Storage & Warehousing Service during the relevant period. On the basis of intelligence, it was alleged that the appellants were providing Manpower Recruitment Service and also Manpower Supply Service, which became taxable w.e.f. 16.06.2005 under the category of "Manpower Recruitment & Supply Agency" to M/s Bharati Airtel, M/s. Bharati Infotel and with M/s. Bharati Televentures but failed to discharge service tax on Gross Taxable Value of the services provided. Consequently, a show-cause notice was issued to them on 02.09.2008 demanding service tax for the period from 16.06.2005 to 31.03.2007 amounting to Rs.7,84,97,825/- with interest and penalty as the appellant had failed to declare the gross amount received as per the invoices raised resulting to short-payment of service tax. Similar show-cause notices were issued thereafter periodically for the period from 01.10.2007 to 31.03.2012 (5 SCNs) demanding duty as shown in the said show-cause notices along with interest and proposal for penalty. On adjudication, the learned Commissioner confirmed a total demand of Rs.13,58,40,905/- for the period 16.06.2005 to 31.03.2012 with interest and imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 105)(k) of the Act. ➢ that the issue of levy of tax by including reimbursable expenses in the 'value' is no longer res integra wherein in the context of "manpower supply" services, it is has been consistently held that reimbursable expenses such as salary, wages, statutory payments, etc are not includible in the value of said service. Reliance is placed on the following decisions. (a) M.P. Security Force v. CCE&ST, [2020 (43) GSTL 253 (T-Del)]. (b) Security Guards Board for Greater Bom. & Thane Dist. v. CCE, [2017 (51) STR 51 (T-Mum)]. (c) Gurbani Security Pvt Ltd v. Pr.DGGSTI, [2021 (51) GSTL 404 (Tri-Del.)[. (d) Neelav Jaiswal & Bros v. CCE, [2014 (34) STR 225 (Tri-Del.)] (e) Sai Security Services v. CCE, [2016-TIOL-2886-CESTAT-HYD]. (f) Vidarbha Iron & Steel Co Ltd v. CCE, [2016 (45) STR 464 (Tri-Mum.)] - Maintained by Apex Court as reported in 2016 (45) STR J204 (SC). (g) C.B.R.E. South Asia Pvt. Ltd. v. CCE & ST, [2021 (51) GSTL 325 (T-Del)] - Maintained by Apex Court as reported in 2021 (53) GSTL J60 (SC). (h) Rajcomp Info Services Ltd. v. PCCGST&CE, [(2023) 5 Centax 52 (T-Del)]. (i) TVS Logistics Services Ltd. v. PCST, [2021 (50) GSTL 530 (T-Chen)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Intercontinental Consultants & Technocrats v. UOI, 2013 (29) STR 9 (Del) Maintained by Apex Court in 2018 (10) GSTL 401 (SC). (b) Sri Bhagavathy Traders v. CCE, 2011 (24) STR 290 (Tri-LB). (c) Rolex Logistics Pvt Ltd v. CCE, 2009 (13) STR 147 (Tri-Bang. 3.2. The learned advocate for the appellant has submitted that the first show-cause notice issued invoking extended period of limitation has been wrongly confirmed by the Commissioner in the impugned order. Since the issues involved are classification and valuation of the services and the appellant had a bona fide belief that reimbursements are not liable to be service tax; hence extended period is not applicable. In support, he has referred the following case laws: a. International Merchandising Company, LLC v. CST, 2022 (67) GSTL 129 (SC). b. CCE v. Northern Operating Systems Pvt Ltd, 2022 (61) GSTL 129 (SC). c. Padmini Products v. CCE, 1989 (43) ELT 195 (SC) d. Jaiprakash Industries Ltd. v. CCE, 2002 (146) ELT 481 (SC). Also, they had been issued with periodical show-cause notices and Commissioner had confirmed demand of service tax invoking extended period of limitation which is also bad in law in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the salary and other expenses reimbursed in the gross taxable value computed under Section 67 of the Finance Act, 1994. 9. We find that the said issue is no more res integra and covered by the judgement of the Tribunal in the case of M.P Security Force Vs. CCE&ST (supra). In the said case, the appellant M.P. Security Force provided security services and manpower supply service during the relevant period. The question before the Tribunal was whether the component of salary, EPF, ESI and uniform allowances etc. be included in the gross amount charged to their clients. Following the judgment of the Hon'ble Supreme in UOI Vs. Intercontinental Consultants and Technocrats Ltd.'s case (supra) interpreting the expression "such services" under Section 67(1) of the Finance Act, 1994, the Tribunal held as follows:- 8. The issue regarding valuation of taxable services has been the subject matter of decision of Hon'ble Delhi High Court in case of Intercontinental Consultants & Technocrats Pvt. Ltd. (supra), which has been affirmed by Hon'ble Supreme Court as reported in 2018 (10) G.S.T.L. 401 (S.C.), wherein it is held that under provision of Section 67(1) of the Act only service element ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each House of Parliament and that the House has the power to modify the rule. As pointed out by the Supreme Court in Hukam Chand v. Union of India, AIR 1972 SC 2427 :- "The fact that the rules framed under the Act have to be laid before each House of Parliament would not confer validity on a rule if it is made not in conformity with Section 40 of the Act. Thus Section 94(4) does not add any greater force to the Rules than what they ordinarily have as species of subordinate legislation. 9. In view of above, the contributions made towards EPF and ESI are not liable to be included for the computation of gross amount under Section 67(1) of the Act. We also find that the similar issue had been come up for consideration before this Tribunal in case of Young Brothers Transporters and Contractors v. CCE, Meerut-I - 2017 (6) G.S.T.L. 513 (Tri. - Del.), wherein it is held that employer contribution towards PF, EPF, ESI into Central Govt. account is not required to be included for the purpose of a computation of gross amount for discharge of service tax liability. Paragraph 6 of the order, which is the relevant paragraph, is reproduced as under : "6. The Employees Provident Fund & Mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable to the registered Security Guards of the Board every month by the registered principal employer shall be remitted by the registered principal employers by cheque to Secretary, of the Board, within such time after the end of the month, as may be specified by the Board. The Secretary thereupon shall arrange to disburse the wages and other dues, if any to the registered Security Guards of the Board on specified days every month subject to deductions, if any, recoverable from them under the Scheme : Provided that the Board may, if it thinks fit, and subject to such conditions as may be laid down by it, allow a registered principal employer to pay directly to the Security Guards the wages and other allowances after making such deductions as may be authorized and recoverable from them under the Scheme, within such time and in such manner as may be specified by the Board." From the above clause, it is apparent that the wages and allowances are collected by the Board as an Agency for payment to the concerned persons/authorities. Therefore, the wages and allowances are excludible from the value of service tax. Thus, the taxable value for the purpose of levy needs to exclude th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
