2018 (11) TMI 90 - AT - Service Tax

Demand of differential amount of tax - It appeared to Revenue that there is huge difference between the taxable amount received by the appellant as per Form No.26AS and the taxable amount shown in their returns - management, maintenance and repair service - manpower supply service - works contract service - Held that - The work done at Item No.2 for Kanpur Development Authority is construction of low cost houses under EWS Scheme and also road/lane was constructed along with the houses - both the work of road and the construction of EWS houses under the Manyavar Kansiram Sahari Garib Awas Yojana are exempt as already held by this Tribunal in its ruling in the case of Commissioner of Customs, C.Ex. & S.T., Allahabad vs. Ganesh Yadav 2017 (5) TMI 1251 - CESTAT ALLAHABAD . Construction of Road along Ganga canal - demand of service tax - Held that - The appellants have constructed road for the state government through the Executive Engineer of Ganga Canal Project wherein road is constructed along the canal - the said work is not liable to Service Tax and Service Tax is set aside. Loan reimbursed - demand of service tax - Held that - The receipt is in the nature of return of loan by the said M/s.Choudhary Flour Mills Pvt.Ltd. - said amount is not a taxable receipt. Non taxable amount of Interest On deposit - demand of service tax - Held that - These are receipt of interest by the appellant on their deposits with the bank, post offices etc. - these amounts are not exigible to Service Tax and accordingly no Service Tax is leviable under the provisions of Service Tax. Appeal allowed in part.

Summary

Issues:
1. Appellant accused of suppressing taxable turnover and not paying appropriate Service Tax.
2. Discrepancies in taxable amounts received and shown in returns.
3. Appellant's representation before the Court below hindered.
4. Taxability of specific items in the turnover.
5. Appellant's liability for Service Tax on certain items.

Analysis:

1. The Revenue alleged that the appellant, registered for various services, failed to provide details supporting the taxable amounts shown in their returns. Discrepancies were noted between amounts received and reported. The Revenue accused the appellant of suppressing turnover, leading to a demand of ?1,47,52,325.

2. The show cause notice covered the period 2009-10 to 2013-14. The appellant's counsel provided a breakdown of turnover for this period. Discrepancies in payments received were highlighted, especially concerning Utility Power Tech Ltd. and NTPC. The appellant's failure to reconcile these differences raised suspicions of tax evasion.

3. The appellant claimed ineffective representation due to the unavailability of detailed calculations in the show cause notice. The counsel argued that many items in the turnover were non-taxable, and for taxable items, the applicable taxes were paid.

4. Upon review, the Tribunal found that certain works undertaken by the appellant, such as construction of low-cost houses and roads under specific schemes, were exempt from Service Tax. Additionally, the construction of roads for the state government and certain loan transactions were deemed non-taxable.

5. The Tribunal determined the appellant's liability for Service Tax on specific items in the turnover, including works contract and manpower supply services. The appellant was directed to prepare a statement of admitted taxes for taxable services, appear before the adjudicating authority with evidence of tax paid, and settle any balance tax within 45 days.

This judgment clarifies the tax liability of the appellant based on the nature of services provided and the specific transactions involved, emphasizing the importance of accurate reporting and compliance with tax regulations.