2018 (7) TMI 1281 - AT - Service Tax

Voluntary Compliance Entitlement Scheme - GTA service - Reverse Charge Mechanism - suppression of facts - Manpower Supply Agency Service - renting of Immovable Property Service - Held that - The learned Commissioner have rightly allowed the benefit of the VCES application, as admittedly there is no show cause notice issued under Section 111 of the Service Tax VCES, 2013 - the final certificate being VCES 3 have been issued by the revenue by its competent officers, as prescribed under the scheme. Accordingly, the learned Commissioner have rightly deleted the demand in respect to GTA service up to the period 31/12/2012. So far the observation that the scheme is applicable till 31st March 2013, this Tribunal clarifies that the scheme is applicable only upto 31st December, 2012 and accordingly, the benefit under the scheme is also applicable till 31st December, 2012 and not up to 31st March, 2013. The appellant have made payment of substantial taxes, as raised in the common bill raised by the service providers including the GTA service. It is also apparent that there is error in computing the tax, as certain services on which tax has already been paid, have also been included, relating to inflation of the impugned demand - appeal of the appellant-assessee is allowed by way of remand to the adjudicating authority, with a direction to hear the appellant with respect to the three services namely GTA Service, Manpower Supply Agency Service, slaughtering charges and to determine the tax liability in accordance with law. Extended period of limitation - Held that - The same is invocable, as admittedly the appellant failed to disclose service tax payable under the head of Manpower Supply Agency Service and also renting of Immovable Property Service - extended period invoked. Appeal allowed by way of remand.

Summary

Issues:
1. Non-payment of service tax on GTA service under reverse charge mechanism.
2. Non-payment of service tax on supply of manpower service under reverse charge mechanism.
3. Non-payment of service tax on renting of immovable property for commercial purpose.
4. Compliance with Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES).
5. Applicability of extended period of limitation.

Analysis:
1. The appellant, a mechanized slaughter house engaged in exporting frozen buffalo meat, was found not paying service tax on GTA service under reverse charge mechanism. The appellant failed to comply with conditions for exemption under Notification No.31/2012-ST and was not registered with the Service Tax Department until November 2013. The Commissioner demanded service tax on 25% of transportation charges for exporting meat since the appellant did not fulfill exemption conditions.

2. The appellant was also liable for service tax on the supply of manpower service under reverse charge mechanism. Charges paid to outside laborers were observed in the balance sheet, indicating liability. The Commissioner confirmed the service tax demand on manpower recruitment and supply agency service for the relevant period.

3. The renting of property for commercial purposes by the appellant was deemed taxable under service tax provisions. The Commissioner confirmed the demand for service tax on renting of immovable property service, along with interest and penalties under Sections 77 and 78 of the Finance Act.

4. The appellant filed a declaration under VCES, 2013 for service tax liability on GTA service and legal consultancy services. The Commissioner accepted the VCES application for the declared amount, leading to the dropping of demands for certain periods. However, discrepancies were noted in the application's coverage period compared to the show cause notice, leading to a partial confirmation of demands.

5. The issue of extended period of limitation was considered. The Tribunal allowed the appeal of the appellant by remanding the case to determine tax liability accurately. The appellant was directed to appear before the adjudicating authority within a specified timeframe. The Tribunal dismissed the appeal filed by Revenue, stating that the extended period of limitation was applicable due to non-disclosure of tax liabilities.

Overall, the Tribunal allowed the appellant's appeal by remand for reevaluation of tax liabilities and dismissed the Revenue's appeal. The judgment clarified the applicability of the VCES scheme and the extended period of limitation, ensuring proper compliance with service tax regulations.