2016 (11) TMI 62 - AT - Service Tax

Taxability - steamer agent service - custom house agent service - extended period of limitation - Held that - the case have to be remanded back to the original adjudicating authority to re-determine the service tax due within the normal period of limitation after deducting the claims made by the assessee. Even for the period of 2005-06 the demand needs to be reworked by allowing deductions as above. We make it clear that for purposes of allowing said deductions, the details as duly certified by independent Chartered Accountant may be made use of. Since the issue has undergone several rounds of litigation, we direct that this exercise may be completed within a period of three months from the date of receipt of this order. The assessee is also directed to cooperate and satisfy the department authorities regarding the quantum of deductions - appeal disposed off by way of remand.

Summary

Issues:
1. Jurisdiction of the Commissioner to raise demands for service tax.
2. Exclusion of certain receipts from the taxable value.
3. Allegations of suppression and limitation period for raising demands.
4. Re-determination of service tax liability and deductions.

Jurisdiction Issue:
The appeals were against the Order-in-Original by the Commissioner of Customs, Cochin, regarding demands for service tax. The High Court remanded the matter to the Tribunal for fresh adjudication, directing detailed consideration of charges collected by the assessee. The appellant challenged the jurisdiction of the Commissioner, arguing that demands should be limited to operations at Cochin. The Commissioner's jurisdiction was upheld for operations across the country, with the Tribunal directing re-determination of service tax liability within the normal period of limitation.

Exclusion of Receipts Issue:
The appellant sought exclusion of certain receipts from the taxable value, supported by detailed charts certified by a Chartered Accountant. The Tribunal found that the adjudicating authority had not fully considered these exclusions, limiting deductions only to specific services. It was held that foreign income, non-taxable activities, and reimbursed expenses should be excluded from the taxable value. The Tribunal directed a reworking of demands, incorporating the certified deductions within a specified timeframe.

Suppression and Limitation Issue:
The show-cause notice for the period 2000-01 to 2004-05 invoked an extended time limit under Section 73, alleging suppression. However, the Tribunal found no specific grounds for suppression and limited the demand to the normal period of limitation. The Tribunal emphasized that the demands were based on complexities in the appellant's operations and lack of immediate location-wise splits. The Tribunal directed cooperation for re-determination within the normal limitation period.

Re-determination of Service Tax Liability Issue:
After detailed submissions, the Tribunal remanded the case for re-determination of service tax liability. The Tribunal directed deductions for specific receipts, including foreign income and reimbursed expenses, to be considered in recalculating the demands. The Tribunal emphasized the use of certified charts by the Chartered Accountant and set a three-month deadline for completing the re-determination process. The appeals were disposed of by way of remand, emphasizing cooperation for the revised assessment.