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TMI Blog2024 (12) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.9,25,30,000/- to M/s. MHM, Germany during the period from 2006-07 to 2007-08. The appellant had paid service tax of Rs. 61,31,210/- towards the service category of IPR service on the taxable value of Rs. 8,46,02,500/- taking exchange rate as prevailing on the date of making payment to M/s. MHM Germany. The taxable amount on which service tax has been paid under the service category of IPR service was taken after deducting TDS from the agreed amount of Rs. 9,25,30,000/- . 2. The department has entertained a view that the appellant should have discharged their service tax liability on the entire amount which was decided to be paid to the appellant that is the appellant should not have deducted the amount of TDS while discharging their se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts for making payment to M/s. MHM Germany and actual remittance made by them to M/s. MHM Germany in Indian Rupees. It has been contended that the Commissioner (Appeals) has not considered the CA certificate properly and has confirmed short payment of the service tax without applying his mind. The learned advocate has relied upon the following decisions to support his claim that service tax cannot be charged on the amount of the TDS which has been deducted by the service recipient for payment made to the service provider (i) Magarpatta Township Development and Construction Co Ltd reported 2016 (3) TMI 811 (ii) Indian Additives Ltd reported 2018 (6) TMI 523. 4. We have also heard departmental representative who has reiterates the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he actual amount of TDS paid by the appellant is Rs.64,86,000/-. Thus, the appellant is liable to pay service tax on actual amount of TDS paid i.e. Rs. 64,86,000/- applying the same analogy as in the case of remitted amount. The appellant has paid service tax on Rs. 61,14,750/- thereby resulting in short- payment of service tax of Rs. 45,887/- (@12.36%) on the differential amount of Rs. 3,71,250/- (Rs. 64,86,000 Rs. 61,14,750). The demand of Rs. 45,887/- along with interest thereon is accordingly liable to be upheld. These facts of non-payment of service tax on actual amount paid were not brought to the notice of the department nor were reflected in their ST-3 returns thereby suppressing the facts from the department. The said facts came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an established legal proposition that the amount of the TDS has to be deducted from the taxable value for charging service tax as per the provisions of Section 67 Finance Act, 1994 read with relevant service tax rules. While holding the above view we rely on this Tribunal decision in case of M/s. Magarpatta Township and Construction Co Ltd Vs. Commissioner of Central Excise Pune-ii reported under 2016 (3) TMI 811 CESTAT Mumbai. The relevant extract of the same reproduced here below:- "6. The issue that falls for consideration is whether the amount of Income Tax discharged by the appellant, on the amount paid by them to foreign architect needs to be taxed under 'Reverse Charge Mechanism' and Service Tax liability can be fastene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice 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 of 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, (a) "consideration" includes any amount that is payable for the taxable services provided or to be provided; (b) "money" includes any currency, cheque, promissory n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le services specified in clause (ii) of rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, as are partly performed in India, shall be the total consideration paid by the recipient for such services including the value of service partly performed outside India." It can be seen from the above reproduced Rule that for the purpose of discharge of Service Tax for the service provided from outside India, the value is equal to the actual consideration charged for the services provided or to be provided. In the case in hand, we specifically asked for the invoice/bill raised by the service provider and on perusal of the same, we find that appellant had discharged the consideration as raised in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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