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2024 (5) TMI 619 - AT - Service TaxNon-payment of service tax - mobilisation advance received - reconciliation of values shown in books of accounts with that declared in ST3 returns (this includes supplies made to SEZ) - deferred and unbilled revenue (under erection, commissioning or installation service) - additional revenue (under works contract service) - short payment of service tax on GTA (as service recipient). Non-payment of service tax on mobilisation advance received - HELD THAT - The Learned Commissioner have categorically recorded the finding that some of the invoices for mobilisation advance are towards material supplied only. Further recorded that from the sample invoices produced, evidently the assessee have deposited the service tax on the service portion. Further the Learned Commissioner took notice that the demand was only on the difference in the income received under the mobilisation advance and the ST3 returns and no investigation was made whether the said amounts pertains to material or services. Further took notice that the assessee have been able to segregated/identify the material portion and the service portion with respect to the receipts as mobilisation advance, and admittedly service tax is already discharged on the service portion, he was pleased to drop the demand - there are no error in the findings of the Learned Commissioner on this issue and accordingly this ground is rejected. Short payment of service tax on the alleged difference between trial balance and ST3 returns - HELD THAT - In the impugned order the Learned Commissioner observed that the assessee have already furnished the details of services rendered to SEZs developer/units along with the purchase order and the relevant documents and that the same have been perused. Further observed that the assessee produced the relevant forms and there is no dispute regarding the provision of service to SEZs units/developer. Further that denial of benefit of exemption by relying upon procedural requirement of notification would be against the provisions laid down in the SEZs act. Exemption cannot be denied on the ground that form A 1 and A 2 have not been produced - reliance is placed on the ruling of the Hon ble High Court of Andhra Pradesh and Telangana in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT wherein it has been held that denial of benefit of exemption by relying upon procedural requirement of notification would be against the provisions laid down in the SEZs Act. Non-payment of GTA service tax as the recipient of service - HELD THAT - The learned Commissioner found no error in accounts maintained by the appellant and was pleased to drop the demand conforming a small amount of Rs.63,161/- for the year 2009 10 and Rs. 42,538/- of the year 2010 11 respectively - the Learned Commissioner have after examining the accounts and the vouchers in details have dropped the substantial part of the proposed demand. Further such finding of fact is not disputed in the grounds of appeal. Accordingly, this ground also against the Revenue is also rejected. Demand of service tax on deferred and unbilled revenue under ECIS and works contract service - HELD THAT - The Learned Commissioner examined the issue in detail and observed that the respondent assessee is maintaining their books under SAP and as per AS 7 model/standard for construction activity-WCS as prescribed by ICAI. As per the accounting standard, respondent on the basis of percentage of work completed as per the agreement with the customer, have calculated the additional revenue. Thus basing on the volume of work done, as per terms of each individual contract, the assessee raised invoices and discharged service tax on the same. The difference in the bills raised to the volume of work done, was calculated as per the norms prescribed under the accounting standard prescribed. Learned Commissioner have categorically observed that the deferred revenue is recognised in the books of account as an accounting adjustment but there is no payment received against the same nor any invoice was raised on the customer. Hence no service tax was liable to be paid on such book adjustment - thus, no service tax was liable to be paid on such book adjustment - there is no error or impropriety in the findings recorded by the Learned Commissioner. Accordingly this ground raised by the Revenue is also rejected. There are no merits in this appeal by Revenue - appeal dismissed.
Issues Involved:
1. Non-payment of service tax on mobilisation advance received. 2. Short payment of service tax on the reconciliation of values shown in books of accounts with that declared in ST3 returns (including supplies made to SEZ). 3. Short payment of service tax on GTA (as service recipient). 4. Non-payment of service tax on deferred and unbilled revenue (under erection, commissioning or installation service). 5. Non-payment of service tax on additional revenue (under works contract service). Summary: 1. Non-payment of service tax on mobilisation advance received: The Revenue alleged non-payment of service tax amounting to Rs. 29,18,336/- on mobilisation advances received during 2011-12, except for Rs. 8,39,433/-. The respondent contended that the advances were primarily for material costs, supported by invoices. The Commissioner found that service tax had been paid on the service portion of the mobilisation advances and that some advances were solely for material costs. The Tribunal upheld the Commissioner's decision, finding no error in the findings. 2. Short payment of service tax on the reconciliation of values shown in books of accounts with that declared in ST3 returns: The Revenue claimed apparent short payment of service tax based on the reconciliation of taxable values in the profit and loss account with ST3 returns for 2008-09 to 2013-14. The respondent argued that the show cause notices did not prima facie examine the books of accounts or the accounting method. The Commissioner found that VAT/sales tax was paid on the material portion, and service tax was already discharged on the service portion. The Tribunal upheld the Commissioner's findings, rejecting Revenue's ground. 3. Short payment of service tax on GTA (as service recipient): The Revenue alleged short payment of Rs. 21,25,195/- for GTA services based on a reconciliation of the profit and loss account with ST3 returns for 2008-09 to 2011-12. The respondent explained differences due to changes in accounting systems and payment bases. The Commissioner, after examining accounts and vouchers, dropped the substantial part of the demand. The Tribunal found no dispute in the Commissioner's findings and rejected Revenue's ground. 4. Non-payment of service tax on deferred and unbilled revenue (under erection, commissioning or installation service): The Revenue alleged short payment of service tax on deferred and unbilled revenue for 2008-09 to 2013-14. The respondent argued that additional revenue was an accounting adjustment, not consideration for services provided. The Commissioner found that deferred and unbilled revenue was recognised as accounting adjustments without payment received or invoices raised. The Tribunal upheld the Commissioner's findings, rejecting Revenue's ground. 5. Non-payment of service tax on additional revenue (under works contract service): The Revenue alleged non-payment of service tax on additional revenue under works contract service. The respondent contended that accounting adjustments did not reflect actual service provision or payments received. The Commissioner found that additional revenue was recognised as per accounting standards without payment received or invoices raised. The Tribunal upheld the Commissioner's findings, rejecting Revenue's ground. Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the impugned order in original. The Tribunal found no merit in Revenue's grounds and confirmed the Commissioner's findings on all issues.
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