2016 (11) TMI 871 - AT - Service Tax

Rectification of Mistakes - threshold exemption - Held that - the first appellate authority has recorded that he is unable to extend the benefit of Notification 8/08-ST dated 01.03.2008 as the appellant had not produced any documents as to their turn-over in the previous year. Before us also, nothing is produced to come to a concrete conclusion- In our view, principally the appellant should get the benefit of exemption under Notification No.8/08-ST if they are able to produce an evidence that their turn-over service rendered from the previous year falls within the period of exemption. To that extent, we hold that the appellants have made out a case in the ROM application. Levy of tax - direct purchase of products made by the applicants from RMP - Held that - there is no error apparent on the face of the record on this point Computation of liability to the extent the consideration is received by the applicants to be taken as inclusive of tax - Held that - duty or tax liability is to be worked out from the amounts/consideration received holding the same as cum-tax consideration. To that extent we hold that the applications for ROM need to be allowed. The tax liability is upheld interest but the same needs to be worked out - applications for Rectification of Mistake are disposed off.

Summary

Issues:
Rectification of Mistakes in final order dated 07.08.2015

Analysis:
The applications for Rectification of Mistakes were filed against the final order dated 07.08.2015. The appellant's counsel argued that errors were apparent on the face of the records. Firstly, they contested the invocation of the extended period for tax liability, citing a lack of independent views in the order and failure to consider previous investigations. They also argued that the service provided was brand promotion not covered under Business Auxiliary Services. Additionally, they claimed entitlement to threshold exemption and challenged the imposition of service tax on direct product purchases. Lastly, they pointed out an incorrect computation of liability due to taxes not being included in consideration received.

The Departmental Representative countered these arguments by stating that all points were raised before the first appellate authority, whose findings were self-explanatory, indicating no errors in the records. The Tribunal considered submissions from both sides and reviewed the records. The judgment followed legal precedents set by the Principal Bench in similar cases, such as Shri Surendra Singh Rathore and Smt Chanda Bohra. The Tribunal found no errors in invoking the extended period for tax liability, citing differences in facts from the case of Charanjeet Singh Khanuja and Ors. The appellants' failure to produce records and inform the department about their activities further supported the Tribunal's decision.

Regarding the threshold exemption, the Tribunal noted the lack of evidence provided by the appellants on their turnover, hence unable to grant the benefit of Notification 8/08-ST. However, if concrete evidence of turnover within the exemption period is produced, the appellants could be eligible for the exemption. The Tribunal also upheld the imposition of service tax on direct product purchases based on previous rulings.

In conclusion, the Tribunal agreed with the appellants on the computation of liability, emphasizing that tax liability should be calculated from consideration received, inclusive of taxes. The applications for Rectification of Mistakes were allowed, and the tax liability was upheld, with the need for a revised computation as specified in the judgment.