2023 (4) TMI 872 - AT - Service Tax

Non-payment of Service Tax - non-monetary consideration such as free accommodation, medical facilities, vehicle and telephone insurance and stationery and other expenses - period April 2009 to March 2012 - invocation of extended period of limitation contemplated under the proviso to section 73 of the Finance Act 1994 - HELD THAT - The issue as to whether the aforesaid value of non-monetary consideration could be included in the taxable value has been decided in M/s. Central Industrial Security Force (CISF) vs Commissioner of Service Tax, Pune 2019 (1) TMI 1661 - CESTAT ALLAHABAD , following the decision of Supreme court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT , where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Thus, for the reasons stated in the aforesaid decision of the Tribunal, with which there exists no reason to differ, the impugned order deserves to be set aside. It would, therefore, not be necessary to examine the issue relating to limitation. Impugned order set aside - appeal allowed.

Summary

Issues involved:
The issue involves the liability to pay service tax on non-monetary considerations such as free accommodation, medical facilities, vehicle and telephone insurance, and stationery expenses for the period April 2009 to March 2012. The main contention is whether the value of non-monetary consideration should be included in the taxable value for the purpose of service tax.

Summary:

Issue 1: Liability to pay service tax on non-monetary considerations

The appellant challenged the order of the Commissioner (Appeals) holding them liable to pay service tax with interest on non-monetary considerations. The Joint Commissioner had confirmed the demand of service tax with penalty and interest, which was partially set aside by the Commissioner (Appeals). The appellant argued that the value of non-monetary consideration should not be included in the taxable value based on previous decisions. The authorized representative for the department acknowledged that the issue was settled in previous Tribunal decisions, where it was held that certain expenses like medical services, vehicles, and free accommodation should not be included in the taxable value for service tax.

Issue 2: Application of limitation

The Tribunal, relying on previous decisions, set aside the order confirming the demand of service tax with interest. It was deemed unnecessary to examine the issue relating to limitation, as the legal position had already been decided by the Hon'ble Supreme Court in previous judgments. Therefore, the appeal was allowed, and the order confirming the demand of service tax with interest was set aside.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the order confirming the demand of service tax with interest based on the established legal position regarding the inclusion of non-monetary considerations in the taxable value for service tax purposes.