2018 (4) TMI 1677 - AT - Service Tax

Rent-a-cab service - Determination of turnover for SSI exemption - benefit of N/N. 6/2005-S.T., dated 1-3-2005 - quantum of abatement - Held that - On perusal of Explanation B to the N/N. 6/2005-S.T., dated 1-3-2005, it is found that the said explanation authorizes exclusion of consideration received towards providing service which are exempt from whole of Service Tax leviable thereon. On perusal of the said N/Ns. 9/2004 and No. 1/2006-S.T., it is found that 60% of the consideration received is exempted from the whole of the Service Tax leviable thereon. Therefore, for the purpose of calculation of aggregate value as per said explanation B , 60% of the consideration received by the appellant for which exemption was admissible, does not need to be taken into consideration. After excluding 60% consideration, the aggregate value of clearance for the years 2007-08, 2008-09 and 2009-10 in the present case is within the permissible limit for the exemption under the said Notification No. 6/2005-S.T., dated 1-3-2005, which exempts taxable service from whole of service tax leviable under Section 66 of the Finance Act, 1994. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Notification No. 6/2005-S.T. for Service Tax exemption based on consideration received.

Analysis:
The appellant provided vehicles to M/s. UPSRTC, leading to a Service Tax demand notice for the period from 2005-06 to 2009-10. The appellant claimed abatement of 60% under specific notifications, arguing for exemption from Service Tax. The original authority dropped proceedings, but the Commissioner (Appeals) disagreed, stating that the abatement did not amount to full exemption, thus necessitating consideration of the total amount received for services. The Tribunal reviewed Explanation "B" of Notification No. 6/2005-S.T. and found that the exclusion of consideration was applicable for services fully exempt from Service Tax. Considering the notifications allowing 60% abatement, the Tribunal concluded that only the non-exempt portion of the consideration should be considered for calculating the aggregate value. Consequently, the Tribunal determined that after excluding 60% of the consideration, the aggregate value fell within the permissible exemption limit under Notification No. 6/2005-S.T., warranting the appeal's allowance.

This judgment highlights the critical interpretation of Notification No. 6/2005-S.T. concerning Service Tax exemption based on consideration received. The Tribunal delved into the specifics of the notifications providing abatement, emphasizing the distinction between exemption and abatement in the context of Service Tax liability. By analyzing the relevant provisions and explanations, the Tribunal clarified that only the non-exempt portion of the consideration should be factored into the aggregate value calculation. This meticulous evaluation ensured a fair assessment of the appellant's liability and upheld the principles of taxation law, ultimately leading to the appeal's success.