2018 (3) TMI 628 - AT - Service Tax

SSI Exemption - determination of turnover - abatement of value - N/N. 1/2006-ST dated 01.03.2006 - Held that - the issue arising out of the present dispute is already settled by the Tribunal in the case of Neelam Singh vs. CC, CE & ST, Allahabad 2017 (5) TMI 1390 - CESTAT ALLAHABAD , where it was held that calculating that for the purpose of determining the aggregate value for exemption under N/N. 6/2005-ST, only the net value received i.e. after the abatement under N/N. 1/2006-ST is to be considered - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Interpretation of Notification No.6/2005-ST and Notification No.1/2006-ST for calculating Service Tax liability, applicability of abatement, entitlement to threshold exemption, clubbing of turnover for threshold exemption.

Analysis:
1. Interpretation of Notifications: The appellant availed SSI exemption during the disputed period for providing "Constructions of Residential Complex Service." The dispute arose regarding the calculation of the threshold exemption limit, where the appellant claimed abatement under Notification No.1/2006-ST from the gross value before applying the SSI exemption. The Department contended that the abatement should not be considered for calculating the SSI benefit. The Tribunal referred to a previous case and interpreted the definition of "aggregate value" under Notification No.6/2005-ST. It was held that only the net value received after abatement should be considered for determining the aggregate value for exemption under the said notification.

2. Entitlement to Threshold Exemption: The Tribunal further clarified that there was no proposal in the show cause notice for clubbing the turnover of the appellants for the purpose of threshold exemption. As per the interpretation of the notifications, the clubbing of turnover was deemed inappropriate, and the appellants were entitled to threshold exemption separately. The Tribunal directed that the appellants should be allowed the threshold exemption individually, without clubbing their turnovers.

3. Decision and Order: Based on the interpretation of the law and the findings from the previous case, the Tribunal found no merits in the impugned orders. Consequently, the Tribunal set aside the previous orders and allowed the appeals in favor of the appellants. The matter was remanded to the Adjudicating Authority for calculating any net tax payable after implementing the directions provided in the Tribunal's order. The appellants were instructed to submit the calculation to the Adjudicating Authority for finalization.

In conclusion, the Tribunal's judgment clarified the interpretation of relevant notifications for calculating Service Tax liability, affirmed the entitlement to threshold exemption without clubbing turnovers, and allowed the appeals in favor of the appellants based on the legal analysis and findings.