9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 142 - AT - Service TaxNature of transaction - sale or service - Business Auxiliary Service or not - Returns not filed by assessee - contradiction of SCN - it is alleged that the service was classifiable under Commission Agent Service - time limitation - HELD THAT - An identical issue has been considered and decided by the Co-ordinate Ahmedabad Bench of the Tribunal in the case of M/S AIA ENGINEERING LTD. VERSUS THE COMMISSIONER, ST. - AHMEDABAD 2014 (12) TMI 241 - CESTAT AHMEDABAD where it was held that this activity of the appellant cannot be considered as a Business Auxiliary Services and liable for Service tax under the Finance Act, 1994. It is also the settled position of law that the applicability of Sales Tax and Service Tax are mutually exclusive, as settled by the Hon ble Supreme Court in the case of IMAGIC CREATIVE PVT. LTD. VERSUS COMMISSIONER OF COMMERCIAL TAXES ORS. 2008 (1) TMI 2 - SUPREME COURT . Merely because exemption is availed under the Sales Tax Act, the transaction does not cease to be a sales transaction. In the present case, the State Sales Tax Authorities have considered the impugned sale transactions and also passed assessment orders, which are also placed on record. Apart from this, there is no documentary evidence placed on record to suggest that the appellant did not undertake any sale transaction or rather, only provided services as alleged. The declaration in Form E-1, which is issued by the supplier directly to the beneficiary, is placed on record and that the issuance of Form-C by the beneficiary/customer to the State Department is also on record. Transaction declared as sale and not service - Demand do not sustain - appeal allowed - decided in favor of appellant.
Issues:
1. Taxability of procurement of goods or services under Business Auxiliary Services. 2. Applicability of Service Tax on differential price or price margin earned. 3. Contradiction in Show Cause Notice regarding the classification of service. 4. Limitation period for issuance of Show Cause Notice. 5. Interpretation of transactions involving transfer of property in goods. 6. Exclusivity of Sales Tax and Service Tax. 7. Applicability of exemption under Sales Tax Act on the nature of transaction. Analysis: Issue 1: The primary issue in this case revolved around the taxability of procurement of goods or services under Business Auxiliary Services. The appellant was alleged to have facilitated the procurement of goods for clients and earned a price margin, leading to the imposition of Service Tax on the differential amount. Issue 2: The contention regarding the applicability of Service Tax on the differential price or price margin earned by the appellant was a crucial point of dispute. The authorities argued that the appellant added its consideration to the basic procurement value of goods, making it liable for Service Tax under Section 67 of the Finance Act. Issue 3: An important aspect highlighted by the appellant was the contradiction in the Show Cause Notice regarding the classification of service. The appellant questioned the inconsistency in the classification of service as 'Business Auxiliary Service' and 'Commission Agent Service' within the same notice. Issue 4: The appellant also raised the issue of the limitation period for the issuance of the Show Cause Notice. It was contended that the notice was issued beyond the normal period of limitation, questioning the validity of the proceedings initiated by the authorities. Issue 5: The interpretation of transactions involving the transfer of property in goods was extensively discussed. The Tribunal analyzed various documents and statutory forms submitted by the appellant to state government authorities to determine the nature of transactions as purchase and sale of goods. Issue 6: The Tribunal examined the exclusivity of Sales Tax and Service Tax, emphasizing that the applicability of Sales Tax and Service Tax are mutually exclusive. The Tribunal referred to legal precedents to establish that availing exemption under the Sales Tax Act does not alter the nature of the transaction. Issue 7: The Tribunal concluded that the case was squarely covered by the precedent set by the Ahmedabad Bench of the Tribunal in a similar case. The decision highlighted the importance of documentary evidence and upheld the appellant's position regarding the nature of transactions involving procurement and sale of goods. In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential benefits to the appellant as per the law. The detailed analysis of each issue and the application of legal principles from relevant precedents formed the basis of the Tribunal's decision in this case.
|
