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2016 (4) TMI 1037 - AT - Service TaxPeriod of limitation - Demand for recovery of short paid Service tax - Rent-a-cab services provided under contract upon pro-rata kilometer basis - Held that - the issue is no more res integra in view of the recent judgment of Hon ble Gujarat High Court in the case of Commissioner of Service Tax Vs Vijay Travels 2015 (1) TMI 809 - GUJARAT HIGH COURT . In the present case, the extended period of limitation is rightly invoked and confirmed against the appellant, as the appellant had suppressed the correct value received from their customers during the relevant period and the leviability of Service Tax had not been disputed by the appellant at any point of time. Imposition of penalty - Demand for recovery of short paid Service tax - Period involved is 2002-03 to 2006-07 (upto Sept. 2006) - Rent-a-cab services provided under contract upon pro-rata kilometer basis - For the initial period of one year, the duty was calculated on the basis of invoices issued by the Appellant, whereas for the subsequent period, the Service Tax liability was determined on the basis of balance sheet figures as the Appellant failed to produce the relevant invoices on the plea that the same were destroyed in flood. Held that - the learned Commissioner (Appeals), in the impugned order, after deliberating various pleas of the Appellant, observed that the Chartered Accountant s certificate produced by the appellant in support of their claim that the gross receipts shown in the balance sheets include the value of materials supplied to the customers, could not be accepted, as it has no relation to their plea that the figures shown in the balance sheet are inflated for various business purposes. Therefore, there is no reason to interfere with the specific findings of the learned Commissioner (Appeals). However, we find force in the contention of the learned Advocate that in view of the principle laid down in Krishnaram Dyeing and Finishing Works case 2013 (8) TMI 539 - GUJARAT HIGH COURT , on compliance of the condition of Section 78 of Finance Act, 1994, they would be eligible to pay 25% of the penalty, which has not been objected to by the learned Authorised Representative for the Revenue. - Decided partly in favour of appellant
Issues:
- Incorrect Service Tax payment by the Appellants for the period 2002-03 to 2006-07. - Dispute regarding the chargeability of Service Tax on rent-a-cab operator service. - Invocation of extended period of limitation and imposition of penalty. - Applicability of judgments on the issue. - Analysis of evidence and pleas presented by both parties. - Determination of correct taxable value and liability for Service Tax. Analysis: 1. Incorrect Service Tax Payment: The appeal was filed against the order confirming a demand notice for short paid Service Tax of ?24,10,096/- due to incorrect payment by the Appellants during the period from 2002-03 to 2006-07. The Appellants did not discharge the Service Tax correctly on the gross taxable value received from their customers, leading to the imposition of penalty and interest. 2. Dispute on Chargeability of Service Tax: The Appellant argued that the demand was confirmed based solely on balance sheet figures, without efforts to verify facts from customers. They cited judgments indicating that rent-a-cab services on a pro-rata kilometer basis may not be subject to Service Tax. However, the Revenue contended that the issue of chargeability was settled by a judgment of the Gujarat High Court. 3. Extended Period of Limitation and Penalty: The Revenue invoked the extended period of limitation, asserting that the correct value received was suppressed by the Appellants. The Appellant's plea that no facts were concealed was countered, and the imposition of penalty was supported based on the suppression of gross taxable value. 4. Applicability of Judgments: Both parties referred to various judgments to support their arguments on the chargeability of Service Tax and the interpretation of law in similar cases. The judgments highlighted the importance of disclosing accurate information to tax authorities. 5. Analysis of Evidence: The Commissioner (Appeals) upheld the demand, noting discrepancies between balance sheet figures and ST-3 returns. The Appellant's claims of inflated figures for business purposes were rejected, and it was established that the income declared in returns was lower than actual receipts, resulting in short payment of Service Tax. 6. Determination of Taxable Value: The Appellants were found liable to pay Service Tax on the gross amount charged for the services provided, as per Section 67 of the Finance Act, 1994. The Commissioner's findings were supported, and the Appellants were directed to pay the Service Tax based on the higher income shown in the balance sheets. 7. Conclusion: The Tribunal modified the order to allow the Appellants to pay 25% of the penalty imposed on fulfilling the conditions under Section 78 of the Finance Act, 1994. The appeal was partly allowed on this basis, acknowledging the principle laid down in a relevant judgment.
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