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2021 (9) TMI 772 - AT - Service TaxLevy of service tax - Infrastructural services under the category of Business Support Services - Transit / Guest House services provided to group companies - Manpower Supply Services - Transfer of employees group companies - Difference between ST-3 Balance Sheet - Wrong Availment of CENVAT Credit. Levy of Service Tax - Business Support Services - transit house income - HELD THAT - The provision of housing facility on short-term basis is specifically covered under short-term accommodation services , which has been subjected to service tax w.e.f. May 01, 2011 under section 65(105) (zzzzw) of the Finance Act. As this service is a new entry and has not been carved out from any other existing service, it cannot be included under any other category, including BSS, prior to May 01, 2011. This is what was held by Bombay High Court in Indian National Shipowners Association 2009 (3) TMI 29 - BOMBAY HIGH COURT . The Bombay High Court observed that introduction of a new entry and inclusion of certain services in that entry would pre-suppose that there was no earlier entry covering the said services. It was also observed that creation of the new entry was not by way of amending the earlier entry and it was not carved out of any earlier entry. The infrastructural support services includes only the service specified in the Explanation, which essentially includes setting up office spaces. Thus, accommodation or guest house facility will not form part of infrastructural support services and cannot be treated as provision of BSS - the Commissioner was not justified in confirming the demand on the amount received for transit house under the category of BSS. Manpower supply services - appellant was supplying manpower to its group companies - HELD THAT - Reliance was placed in the case of M/S MIKUNI INDIA PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, CUSTOMS CENTRAL EXCISE 2019 (8) TMI 260 - CESTAT NEW DELHI where Division Bench in M/s India Yamaha Motor Private Limited 2019 (7) TMI 772 - CESTAT NEW DELHI examined the issue both for the period prior to 1 July, 2012 and for the post negative list for the period subsequent to 1 July, 2012 and held that neither during the pre-negative list nor post negative list, Service Tax could not be levied on deputation of employees from a group company in Japan to the Appellant in India - thus, the appellant is not engaged in rendering supply of manpower service - demand set aside. Difference between ST-3 and balance sheet - HELD THAT - The appellant had clearly explained the difference in the values appearing in the Service Tax Return and the Balance Sheet. The reason stated was that the appellant had reported wrong value-cum-tax basis in the Service Tax Return, whereas the appellant paid service tax on the correct value. These facts were placed before the Adjudicating Authority with supporting documents but the same have not been considered. The explanation offered by the appellant was required to be examined - for the reason that the category of taxable service under which the demand was confirmed has not been specified and for the reason that the appellant has satisfactorily explained the difference in the tax value, the demand under this head cannot be sustained. Wrong availment of credit - demand on the ground that closing balance as per Service Tax-3 returns in the months of March, 2006 and March, 2008 was NIL - period April, 2006 and April, 2008 - HELD THAT - It is seen that the Commissioner has not examined the documents that were on record. It would, therefore, be appropriate to remand the matter to the Commissioner to examine this issue, after taking into consideration the documents, including the Chartered Accountant certificates which are at pages 1428 to 1435 and 1470 of the appeal memo. The order dated April 18, 2013 passed by the Commissioner, except to the extent it has confirmed the demand of CENVAT credit for the months of April 2006 to April 2008, cannot be sustained and is set aside. So far as the confirmation of demand of CENVAT credit for the months April 2006 to April 2008 is concerned, the Commissioner shall re-examine the matter - Appeal allowed by way of remand.
Issues Involved:
1. Service tax under BSS on the transit house income. 2. Manpower supply services. 3. Difference between ST-3 and balance sheet. 4. Wrong availment of credit. Issue-wise Detailed Analysis: Service Tax under BSS on the Transit House Income: The appellant owns guest houses used by employees of group companies during official tours, charging the group companies accordingly. The appellant contends that the transit house income should not be subject to service tax under Business Support Services (BSS) as it falls under "short-term accommodation services" taxable only from May 1, 2011. The Commissioner did not accept this argument, maintaining that the services were infrastructural support under BSS. However, the Tribunal accepted the appellant's submission, stating that the provision of housing facilities is specifically covered under "short-term accommodation services" and taxable only from May 1, 2011. The Tribunal referenced the Bombay High Court's decision in Indian National Shipowners’ Association, which held that new service entries imply no prior coverage under existing categories. Additionally, accommodation or guest house facilities do not form part of infrastructural services as defined under BSS. Therefore, the Commissioner was not justified in confirming the demand under BSS. Manpower Supply Services: The appellant was charged under "manpower recruitment and supply agency service" for supplying manpower to group companies. The appellant argued that it only deputed employees to group companies, who reimbursed their salaries, and thus did not supply manpower. The Tribunal agreed, citing precedents like Computer Sciences Corporation India P. Ltd. and Lowe’s Services India Pvt. Ltd., which clarified that merely deputing employees does not constitute manpower supply services. Consequently, the appellant was not engaged in rendering supply of manpower service. Difference between ST-3 and Balance Sheet: The Commissioner confirmed a service tax demand of ?2,14,001/- due to discrepancies between ST-3 returns and the balance sheet. The appellant explained that the difference arose from reporting the wrong value on a cum-tax basis in ST-3 returns while paying service tax on the correct value. The Tribunal found that the category of taxable service was not specified and the appellant had satisfactorily explained the difference. Therefore, the demand under this head could not be sustained. Wrong Availment of Credit: The Commissioner confirmed a demand of CENVAT credit for April 2006 and April 2008, stating that the closing balance in ST-3 returns was shown as NIL. The appellant argued that the balance was incorrectly reported as NIL and provided supporting documents, including a Chartered Accountant's certificate. The Tribunal noted that the Commissioner did not examine these documents and remanded the matter for re-examination in light of the provided evidence. Conclusion: The Tribunal set aside the Commissioner's order dated April 18, 2013, except for the confirmation of CENVAT credit for April 2006 to April 2008, which was remanded for re-examination. The appeal was allowed to the extent indicated.
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