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2018 (10) TMI 1007 - AT - Service TaxShort payment of service tax - Management Consultant Services - Demand of service tax of ₹ 23,44,07,478/- no service provider and service receiver relationship - Held that - The contribution received from non-governmental agencies was not in respect of any specific service rendered to the organization from whom the money was received and the money received had no relation with the number of people to be recruited by such organization - there is no service provider and service receiver relationship between the appellant and the organizations from whom contribution of ₹ 2.31 crore (approximate) was received by the appellant - the demand of service tax of ₹ 23,44,07,478/- alongwith interest and equal penalty set aside. Demand of Service Tax of ₹ 30,21,221/- - consideration received for rendering services to SEZ Units - Section 51 of SEZ Act, 2005 - Held that - In view of Section 51 of SEZ Act, 2005 the provisions of SEZ Act have affect not withstanding anything inconsistent therewith contained in any other law for the time being in force - as per clause (e) of Sub-section (1) to of Section 26 of SEZ Act, 2005, every developer and entrepreneur is entitled to exemption from service tax under Chapter V of Finance Act, 1994 on taxable services provided to developer or units to carry on the authorized operations in Special Economic Zone - demand of ₹ 30 lakhs (approximate) is not sustainable. Demand of Service Tax of ₹ 5,61,455/- - on the basis of difference in the income reflected in balance sheet with that reflected in ST-3 returns, the said amount of ₹ 54,51,017/- was treated as consideration without identifying whether the same was received for rendering any service - Held that - Through the Final Order passed by this Tribunal in the case of Shubham Electricals 2015 (6) TMI 786 - CESTAT NEW DELHI . This Tribunal in Para-11 of the said order has observed as follows Neither the show cause notice dated 21/10/2011 nor the impugned adjudication order dated 18/01/2013 record any assertion/conclusion whatsoever as to which particular or specific taxable services the appellant had provided. In the absence of an allegation of having provided a specific taxable service in the show cause notice and in view of the failure in the adjudication order as well, neither the show cause notice nor the consequent adjudication order could be sustained - demand do not sustain. Demand of Service Tax of ₹ 3,30,011/- - appellant had rendered service to International Financial Corporation - Held that - The issue of leviability of service tax on services rendered to International Financial Corporation is no more res integra - service tax is not leviable on services rendered to International Financial Corporation - demand set aside. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Demand of service tax on Skill Development Programme under Swarnjayanti Gram Swarozgar Yojana. 2. Demand of service tax on services rendered to SEZ Units. 3. Demand of service tax on unexplained income difference. 4. Demand of service tax on services rendered to International Financial Corporation. 5. Demand of service tax on various services received from foreign service providers. Issue-wise Detailed Analysis: A. Demand of Service Tax of ?23,44,07,478/-: (i) The appellant provided services under the Skill Development Programme for rural BPL youths under the Swarnjayanti Gram Swarozgar Yojana. The program was funded 75% by the Government of India through grant-in-aid and 25% by non-governmental organizations. The appellant argued that the grant-in-aid received from the government should not be subject to service tax, citing the precedent set in the case of Apitco Ltd. vs. Commissioner of Service Tax, Hyderabad, which was affirmed by the Supreme Court. The Tribunal agreed, holding that service tax is not leviable on the amount received from the government as grant-in-aid. Additionally, the Tribunal found no service provider-service receiver relationship between the appellant and the non-governmental organizations contributing funds, thus setting aside the demand for service tax on the ?2.31 crore received from these organizations. (ii) The Revenue supported the impugned Order-in-Original. (iii) The Tribunal set aside the demand of ?23,44,07,478/- along with interest and equal penalty. B. Demand of Service Tax of ?30,21,221/-: (i) The appellant contested the service tax demand on services rendered to SEZ Units, arguing that under Section 51 of the SEZ Act, 2005, and Section 26(1)(e) of the SEZ Act, 2005, services provided to SEZ Units are exempt from service tax. The Tribunal found merit in this argument. (ii) The Revenue supported the impugned Order-in-Original. (iii) The Tribunal set aside the demand of ?30,21,221/- along with interest and equal penalty. C. Demand of Service Tax of ?5,61,455/-: (i) The appellant argued that the Original Authority confirmed the demand without providing reasons or identifying specific services rendered for the consideration of ?54,51,017/-. Citing the case of Shubham Electricals vs. Commissioner of Central Excise, Rohtak, the Tribunal held that without specific allegations or conclusions regarding the taxable services provided, the demand is unsustainable. (ii) The Revenue supported the impugned Order-in-Original. (iii) The Tribunal set aside the demand of ?5,61,455/- along with interest and equal penalty. D. Demand of Service Tax of ?3,30,011/-: (i) The appellant contested the service tax demand on services rendered to International Financial Corporation (IFC), arguing that the Tribunal had previously ruled in Coastal Gujarat Power Ltd. vs. Commissioner of Service Tax, Mumbai-I that service tax is not applicable to services rendered to IFC. The Tribunal agreed with this precedent. (ii) The Revenue supported the impugned Order-in-Original. (iii) The Tribunal set aside the demand of ?3,30,011/- along with interest and equal penalty. E. Demand of Service Tax of ?71,734/-: The appellant acknowledged the liability and had already paid the amount, thus did not seek relief for this demand through the appeal. Conclusion: The Tribunal set aside the impugned order except for the amount of ?71,734/- along with interest. The appeal was allowed in favor of the appellant.
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