2019 (2) TMI 954 - AT - Service Tax

Failure to discharge service tax in full for the services provided by them - Manpower Supply - Cleaning Service - demand in the show-cause notice was arrived at on the basis of the Bank statement of the assessee for the relevant period - Held that - The Adjudicating Authority has carefully considered the submissions made by the assessee before him and have excluded various amounts received in the Bank towards interbank transfers, refund of EMD/FDR encashment, cheque returned and other charges. Show-cause notice has been originally issued by taking into account the entire receipt in the Bank account. However, it is evident that the receipts indicated in the impugned order are clearly not by way of consideration for any service rendered. Accordingly, there is no infirmity in the stand taken by the Commissioner to exclude such amounts from the gross value of taxable services. The amount towards manpower supply as well as cleaning service can be considered for exclusion if such amounts have been received as consideration for providing these services, during the period prior to 16.06.2005. The Table as well as accompanying documents, even though duly certified by the Chartered Accountant, does not substantiate the above consideration. As such, we are unable to extend the deduction of such value for determination of service tax liability. The matter is remanded to the original Adjudicating Authority for re-quantifying of the demand and passing denovo order, after duly considering the claim of the appellant for deduction of manpower supply and cleaning agency service to the extent of receipt of consideration prior to 16.06.2005 - appeal allowed by way of remand.

Summary

Issues:
- Service tax demand for the period 2003-04 to 2007-08
- Exclusion of certain amounts from service tax liability
- Deduction of amounts for manpower supply and cleaning services

Service Tax Demand:
The case involved appeals against Order-in-Original No.46/Commr./ST/Kol./2009-10 regarding service tax demand. The Department issued a show-cause notice proposing a demand of service tax for an amount of ?2.04 Crores and Education Cess of ?5.8 lakhs, along with interest and penalties under Sections 76 & 78. The Adjudicating Authority restricted the demand to ?36.07 lakhs along with interest, dropping the balance amount of about ?1.69 Crores. The Authority also imposed penalties under Sections 76 & 78 of the Finance Act, 1994.

Exclusion of Amounts:
The Adjudicating Authority excluded various amounts from the service tax liability, such as interbank transfers, refund of EMD/FDR encashment, cheque returns, and services not liable for service tax. The Authority found no infirmity in excluding these amounts from the gross value of taxable services, rejecting the appeal filed by the Revenue.

Deduction for Manpower Supply and Cleaning Services:
The appellant claimed deduction for amounts related to manpower supply and cleaning services prior to 16.06.2005. The Adjudicating Authority declined the deduction, stating that the total receipt was considered for security services. The Tribunal reviewed a certified Table submitted by the appellant's Chartered Accountant, detailing various services provided. However, the Tribunal found that the evidence did not substantiate the consideration received for manpower supply and cleaning services. As a result, the Tribunal set aside the impugned order and remanded the matter to the original Authority for re-quantifying the demand, allowing the appellant to claim deductions supported by an independent Chartered Accountant certificate.

In conclusion, the Tribunal directed the denovo adjudication to be completed within three months from the date of the order.