2015 (11) TMI 345 - AT - Service Tax

Demand of service tax - cum-tax benefit expended to the assessee - commission received by them for sale of RBI bonds - Held that - Adjudicating authority has held that the respondent has received an amount of ₹ 7,01,26,712/- as commission from Reserve Bank of India for the sale of bonds. Undoubtedly, no service tax was paid on the said amount and accordingly the conclusion reached by the adjudicating authority that the entire amount needs to be considered as cum-tax amount and tax liability worked out on such value is the correct conclusion and the judgment of the Tribunal in the case of Advantage Media Consultant (2008 (3) TMI 59 - CESTAT KOLKATA) holds so. - judgment has been upheld by the Hon ble apex Court by dismissing Civil Appeal filed by the Revenue after condoning the delay which would mean that the value received for the taxable purpose needs to be considered as cum-tax amount if the service tax is not charged. - impugned order is correct - Decided against Revenue.

Summary

Issues:
Service tax liability on commission received for sale of RBI bonds.

Analysis:
The appeal was filed by the Revenue against an Order-in-Original passed by the Commissioner of Service Tax, Mumbai II. The issue revolved around the service tax liability on the commission received by the respondent for the sale of RBI bonds. The adjudicating authority confirmed the demands but reduced the demand by considering the amounts received as commission by the respondent as cum-tax amount. The Revenue contended that the adjudicating authority should not have treated the amount received by the respondent as cum-tax amount. The Departmental Representative argued that the service rendered was not liable to service tax, and the respondent failed to prove that the value of taxable service was inclusive of service tax. The Departmental Representative also cited a judgment of the Supreme Court to support their argument.

The respondent, on the other hand, relied on a Tribunal judgment and a Trade Notice to support their position. After considering the submissions from both sides and examining the records, the Tribunal found the Revenue's appeal to be without merit. The Tribunal agreed with the adjudicating authority that the entire amount received by the respondent needed to be considered as cum-tax amount for calculating the tax liability. The Tribunal referenced a previous judgment to support their decision, emphasizing that when no tax is collected separately, the gross amount should be adopted to quantify the tax liability. The Tribunal rejected the Revenue's appeal based on the principles outlined in the previous judgment, which had been upheld by the apex Court.

In conclusion, the Tribunal upheld the impugned order, stating that the value received for taxable purposes should be considered as cum-tax amount if service tax is not charged separately. Based on the referenced judgment and the specific circumstances of the case, the Tribunal rejected the Revenue's appeal, affirming the correctness and legality of the impugned order.