2018 (2) TMI 573 - AT - Service Tax

Small Scale exemption utpo ₹ 10 lakhs - Rent-a-cab Operator Service - benefit of N/N.6/2005-ST dated 01.03.2005 - Held that - On perusal of the said N/N. 9/2004 and No.1/2006-ST, we find that 60% of the consideration received is exempted from the whole of the service tax leviable thereon. Therefore, we find that 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-ST dated 01.03.2005 which exempts taxable service from whole of service tax leviable under Section 66 of the FA 1994 - benefit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Interpretation of Notification No.6/2005-ST dated 01.03.2005 regarding service tax exemption.
- Consideration of abetment under Notification No.9/2004 and 1/2006-ST for service tax calculation.

Analysis:
1. The appellant provided vehicles to M/s UPSRTC, leading to a service tax demand of &8377; 3,30,647/- for the period from 2007-08 to 2009-10. The appellant claimed abetment of 60% assessable value under Notification No.9/2004 and 1/2006-ST, along with small-scale exemption under Notification No.6/2005-ST, to avoid paying service tax. The original authority confirmed a demand of &8377; 92,705/- and imposed a penalty, prompting the appellant to appeal to the Commissioner (Appeals).

2. The Commissioner (Appeals) examined Explanation "B" of Notification No.6/2005-ST and determined that the abetment of 60% under Notifications No.9/2004 and 1/2006-ST did not constitute exemption from the whole of the service tax. Consequently, the Commissioner held that the entire consideration received by the appellant should be considered for calculating the aggregate value of services provided, leading to the appellant approaching the Tribunal against this decision.

3. The Tribunal, after hearing both parties and analyzing Explanation "B" of Notification No.6/2005-ST, concluded that the exclusion of consideration received for services exempt from the whole service tax was permissible. Considering the abetment of 60% under Notifications No.9/2004 and 1/2006-ST, the Tribunal found that this exempted portion did not need to be included in the calculation of the aggregate value. By excluding 60% of the consideration, the Tribunal determined that the aggregate value of clearance for the relevant years fell within the permissible limit for exemption under Notification No.6/2005-ST.

4. The Tribunal held that the impugned Order-in-Appeal was not sustainable based on the above analysis. Consequently, the Tribunal set aside the Order-in-Appeal and allowed the appeal filed by the appellant. This decision was pronounced in open court, providing relief to the appellant in the matter of service tax liability related to the services provided to M/s UPSRTC.