9911796707
TMI Blog2011 (3) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant submitted the return and disclosed the receipts. There was no suppression of fact made by them in respect of the payment received, as it was furnished to the authorities in the course of adjudication. Only because the discrepancy was noticed by the department by comparing ST3 return with the profit and loss account, the adjudication was made. The appellant pleads that because of the bonafide belief they did not disclose the total receipts. It is also normal understanding that certain elements of recovery in respect of security services shall not form part of gross value on taxable service. Therefore, the appellant prays that the adjudication can not sustain both on limitation as well as on merit. 2. Ld. Counsel also prays that penalty should not be imposed on the appellant for the bonafide belief it had, at the early stage of implementation of law. 3. Per contra, ld. DR for the Revenue submits that there is nothing for debate on the value of services. Tribunal has already decided the case of Naresh Kumar and Co. Pvt, Ltd. vs. CST, Calcutta reported in 2008-TIOL-1016-CESTAT and held that gross receipt shall be taxable although it was held that certain items like payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of proof was on the assessee to come out with clean hand to prove its stand. When we did not find any merit on the part of appellant, we agree with ld. appellate authority that invoking section 73 is appropriate. So far as the valuation aspect is concerned, whether the statutory dues which form part of gross value of the service shall be included or excluded is not a prescription of law. But the consideration that shall contribute to render the services shall essentially form part of the gross value of the taxable service. Tribunal had occasion to deal with this matter in elaborate detail in para 5 to 8 of its order in the case of CCE Chandigarh vs. TEAM S & S. For convenience, we reproduce it as under;- "5. The basic principle that service tax being destination based consumption tax, till the service reaches its destination, that contributes to the proposition that all expenses incurred till that point and time become essential consideration of cost of service. Agreement of parties in respect of modality of payment of valuable consideration towards service provided does not matter for Revenue. In whatever manner the recipient and provider of taxable service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders like stock-brokers, practicing chartered accountants, practicing cost accountants, security agencies, tour operators, event managers, travel agents etc." 7. The nature and character of service tax has also been explained by Apex Court in para 22 of the judgment Association of Leasing & Financial Service Companies vs. Union of India and others reported in 2010-TIOL-87-SC-ST-LB. "22. In All India Federation of Tax Practitioners' case (supra), this Court explained the concept of service tax and held that service tax is a Value Added Tax ('VAT' for short) which in turn is a destination based consumption tax in the sense that it is levied on commercial activities and it is not a charge on the business but on the consumer. That, service tax is an economic concept based on the principle of equivalence in a sense that consumption of goods and consumption of service are similar as they both satisfy human needs. Today with the technological advancement there is a very thin line which divides a "sale" from "service". That, applying the principle of equivalence, there is no difference between production or manufacture of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tribunal in the case of Naresh Kumar & Co. Pvt. Ltd. vs. CST, Kolkata (supra). Our view aforesaid is fortified by the ratio laid down in para 6.10 of the said judgment to allow the appeal of revenue. Accordingly, we allow the appeal of revenue setting aside the first Appellate order and restoring the order-in-original" 10. When there is no prescription of law in respect of the statutory liabilities of the service provider, we are handicapped to provide any sort of relief to the appellant in the matter of EPF and ESI contribution received and forming part of the gross value of the service provided. 11. When we held that proceeding under section 73 was appropriate penal consequence under different provisions of law arise. The Adjudication order had directed penalty under section 76, 77 and 78 of the Finance Act 1994. So far as section 76 and 78 is concerned, looking at the lack of clarity experienced by the assessee at the initial stage of implementation of law, we are of the view that levy of penalty under section 78 would be appropriate to the extend permissible under the law, in view of the concessional provision existing in the statute book. We are guided by the judgement of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
