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TMI Blog2023 (12) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... interfere with his Order in respect of the dropped demand of Rs.73,07,023/-. Accordingly, the Appeal filed by the Revenue is dismissed. Demand of Rs.25,70,758/- - Adjudicating Authority has held that the services provided by the assessee can not be termed as the Services provided by the sub-contractor to the main contractor - HELD THAT:- The submission of the assesse is agreed upon that till the new clarification was given on 23/08/2007, the Revenue was bound by the earlier clarification issued by the CBIC. Therefore, the demand prior to 22/08/2007 is legally not sustainable. Extended period of Limitation - HELD THAT:- The Department in its over-enthusiasm has issued the Show Cause Notice even for the period prior to five years. The Show Cause Notice has been issued for Rs.98.77 Lakhs whereas after thorough verification and reconciliation, the Adjudicating Authority has dropped the demand of Rs.73.07 Lakhs. Even in respect of balance 25.7 Lakhs confirmed demand, we find that the clarification given on 23/08/2007 has been applied for the transaction carried out between April 2006 to 31/03/2008 - the demand for the extended period is legally not sustainable and confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant s Certificate. The Learned Advocate submits that after going through the documentary evidence placed in each and every case, the Adjudicating Authority has dropped the demand of Rs.73,07,023/-. He reiterates the detailed findings given by the Adjudicating Authority for dropping this demand and submits that the Adjudicating Authority has correctly dropped the demand and prays that the Revenue s Appeal may be dismissed. 3. In respect of Rs.25,70,758/- confirmed by the Adjudicating Authority, he submits that they have undertaken Survey and Map Making Service provided to HSCL and others. They have undertaken this service as a sub-contractor to the main contractor i.e. HSCL. Therefore, in terms of Board s Circular No.F.No. B 43/1/97-TRU dated 06/06/1997 and Circular No. B 43/5/97-TRU dated 2/7/1997, the services provided by them cannot be treated as taxable service since the Appellant assesse was acting as a sub-contractor to the main contractor. He further submits that the Adjudicating Authority is in error in relying on the Circular No. 96/6/2007-ST dated 23/8/2007 to hold that the service provided by the Appellant assesse cannot be treated as any service provided by the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and Analysis Service became taxable with effect from 01.07.2003, Survey and Map Making Service came under the purview of Service Tax on 16.06.2005, Site Formation and Clearance, Excavation and Earth Moving and Demolition Service and Consulting Engineer s Service became taxable from 16.06.2005. As per the second proviso to rule 6(1) of the said Rules, no Service tax is payable on the receipts against the services provided before the dates they became taxable. As per Section 67 of the said Act value of taxable service is the gross amount charged for the service provided/to be provided. In terms of rule 6 of the said Rules, Service Tax is payable on the payment received towards value of taxable services. Thus Service Tax is payable on the payment received towards value of taxable services. Thus Service Tax is payable on actual receipts. Accordingly, opening and closing debtors were adjusted with the Gross Income to arrive at actual receipts. From the actual receipts gross receipts as per ST 3 returns were deducted and amount of tax payable was determined on the basis of such differential receipt amounts. It is found that the method adopted in the SCN for calculation of tax li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices amounting to Rs.1,61,30,030/- and Rs.41,55,866/- are to be deducted from the differential amounts to arrive at the differential value of taxable services. Provisions in relation to Service Tax apply to the whole of India except the state of Jammu Kashmir. It is observed that Section 64(1) of the said Act stipulates that Chappter V of the Finance Act, 1994 extended to the whole of India except the state of jammu Kashmir. As the territorial jurisdiction of the Service Tax legislation does not extend to the state of Jammu Kashmir, Service Tax is not leviable on the service rendered in the state of Jammu Kashmir, even if the service is provided by a person having place of business in any other state of India. The said assessee has submitted Annexure containing amount received against job nos. (year wise), copies of some work orders, running bills, amount received against running bills, cheque nos. etc. The above work orders and relevant bills establish that the said assessee provided services in the State of Jammu Kashmir during the material period and realized their charges through running bills. Considering the above position of law, facts and the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leads to the conclusion that Rs.2,16,23,888/- received by the said assessee by way of providing service as sub-contractor/subconsultant during the material period is taxable. It is found that uniform tax rate was not applicable during the material period. Rate of tax varied in subsequent years under consideration. But differential cum-tax values corresponding to different tax rates are not available. Under the circumstances, differential cum-tax values are apportioned on pro-rata basis for working out the tax amount in the following table. Period Differential cum tax value Rate of tax Tax payable Service Tax E. Cess S HE Cess July, 03 March, 04 to 43,13,068 8% 3,19,486 - - 01.04.04 09.09.04 to 40,22,630 8% 2,97,973 - - 10.09.04 31.03.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The Appellants have relied on the two Circulars issued in June 1997 and July 1997 about the sub-contracting work and non-taxability on the same. 9. We agree with the submission of the assesse that till the new clarification was given on 23/08/2007, the Revenue was bound by the earlier clarification issued by the CBIC. Therefore, the demand prior to 22/08/2007 is legally not sustainable. 10. We also note that the Appellant has obtained Service Tax Registration in October 2003 and has been filing their Returns regularly. The Department in its over-enthusiasm has issued the Show Cause Notice even for the period prior to five years. The Show Cause Notice has been issued for Rs.98.77 Lakhs whereas after thorough verification and reconciliation, the Adjudicating Authority has dropped the demand of Rs.73.07 Lakhs. Even in respect of balance 25.7 Lakhs confirmed demand, we find that the clarification given on 23/08/2007 has been applied for the transaction carried out between April 2006 to 31/03/2008. Therefore, we hold that the demand for the extended period is legally not sustainable and confirmed demand for the extended period is set aside on account of limitation also. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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