9911796707
TMI Blog2024 (11) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial records of the appellant by the department for the financial year 2012-13, 2013-14 and 2014-15, it was noticed by the department that the appellant has received "Engineering & Consultancy Service" from M/s IRIS Engineering Co., which was a proprietorship concern of Shri Chittranjanbhai D. Badheka. Shri Chittranjanbhai D. Badheka is also one of the Director of the appellant firm. It has been a contention of the department that since the proprietorship concerned namely M/s IRIS Engineering Co. did not have a separate PAN Number and hence, they entertained a view that the services provided by the proprietorship concerned to the appellant as per the provisions of the Rule (2) (1) (d) (EE) of Service Tax Rule, 1994 read with Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) read with Section 68(2) of Finance Act, 1994 specifies services provided by a Director of a company to the said company and not by a person who is a Director of the company. The liability of Service Tax was on M/s IRIS Engineering Co. who is the service provider as no service is provided by the Director. The proprietorship concern of Shri Chittranjanbhai D. Badheka is in existence since March, 2008 whereas the appellant company i.e. M/s IRIS Automation Pvt. Ltd. came into existence in April, 2009. As the annual turnover of M/s IRIS Engineering Co. was below 10 Lacs, it was claiming small service provider exemption and not paying Service Tax. 2. Secondly, it has been contended by the learned Advocate that the issue is completely revenue n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding "Engineering & Consultancy Service" from M/s IRIS Engineering Co. It is sole proprietorship concern of one of the Director namely Shri Chittranjanbhai D. Badheka. Thus, the only question which need to be answer by us is whether the services provided by M/s IRIS Engineering Co. can be considered as service provided by one of the director of the appellant company. 4.1. We are of the opinion that it is a settled preposition that sole proprietorship concerned is not a separate legal entity from proprietor for the purpose of taxation and for other legal purposes. In case of ANILKUMAR MAHESARIA Vs. COMMISSIONER OF CUSTOMS- 2008 (228) E.L.T. 166 (Del.), Hon'ble High Court of Delhi has held that proprietor and proprietorship concerned are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recipient of service in India, in terms of Rule, 2(1)(d)(iv) of Service Tax Rules, 1994 read with Section 66A of the Finance Act, 1994. Therefore, on merit the Service Tax liability is on the appellant. However on the issue of limitation we find that from the data submitted by the Ld. Counsel and the ST-3 return it is evident that the appellant paying major amount of Service Tax in cash and small portion of tax was paid from Cenvat. Therefore, the demand amount of approximate 17.5 Lakhs is also available as a Cenvat Credit to the appellant, to that extent the Service Tax payment in cash will stand reduced. Therefore, this is a clear case of Revenue neutrality. Accordingly, the non-payment of Service Tax cannot be said to be with malafi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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