2006 (9) TMI 31

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..... The Revenue proceeded to demand Service tax based on the Profit and Loss Account and the returns filed with the Income-tax. The appellant's contention is that in terms of the Income-tax Act, they have to show the gross receipts as per the Income-tax Returns, while in the case of Service tax, the Service tax is payable on the gross receipts received by them. 2.The Asst. Commissioner after due verification found that the amount shown in the Income-tax returns had not been received by the assessee and therefore, the taxable amounts shown in the Profit and Loss Account have not been realised, hence the assessee is not liable to pay Service Tax on the amounts still due from the parties and hence, he dropped the proceedings. The Commissio .....

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..... ice Tax. In the case of Service Tax, the tax is required to be calculated on total receipts and not on the amount still due from the customers. This position has been clarified in the cited case of BPL Ltd. The findings recorded in Para 2 is reproduced herein below : 2.We have heard both sides in the matter and have perused the records. T. Velu Pillai Co., Chartered Accountants have issued certificate based on the verification of books of account of the appellant company, that till date the appellant did not receive payments towards the debit notes raised for various engineering services provided to M/s. B.S. Refrigerators Ltd., and M/s. B.S. Appliance Ltd., Bangalore. The appellants had been filing returns regularly and informing the .....

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..... not received value of taxable services from their customers in terms of Section 68 and Rule 6(1) of Service Tax Rules. The service tax is not liable to be paid as the assessee has not received the payments towards the value of taxable service. The appellants have been filing returns and informing the department about the non-receipt of the value of services rendered by their customers and about the non-payment of the same. The department is aware of these facts as the returns have been filed. Therefore, the issue of show cause notice beyond the period of one year is barred by time. For the reasons stated above, the appeal is thus allowed with consequential relief if any. 5.1The appellant's contention is required to be accepted. The o .....

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