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TMI Blog2024 (2) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a composite service of GTA by including these charges while determining the taxable value. Appellant is not providing GTA service to their customers PVVNL, but are manufacturing and selling the PCC Poles to their customers, which they deliver to their customer at the location specified by the customer. It is not even the case of the revenue that the GTA was providing the services categorized under category of loading and unloading charges and pole shifting and stacking charges . It is also not the case of revenue that the charges in respect of these service received by the appellant were paid to GTA. Not even a single invoice to this effect has been produced or relied upon by the revenue in entire proceedings - there are no merits in this demand. Professional and Legal Services - HELD THAT:- There are no merits in respect of the demand made by the revenue on the expenditure incurred by the appellant which they have categorized under the category of Professional and Legal charges , which in fact are not paid to advocate or the firms of advocate. Along with the appeal appellant have furnished the vouchers of payment, ledger accounts in respect of these expenses, which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 174 of CGST Act, 2017. iv. I impose a penalty Rs 5000/- (Rupees Five Thousand only) upon M/s Rohit Poles, 386, Karwal, Ralhupura (Dandi), Mugalsarai, Chandauli 232101 under Section 77(1)(a) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017. v. I impose a penalty Rs 5000/- (Rupees Five Thousand only) upon M/s Rohit Poles, 386, Karwal, Ralhupura (Dandi), Mugalsarai, Chandauli 232101 under Section 77(2) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017. vi. I order to appropriate the service tax amount of rs 3181/-, interest amount of Rs 4236/- and penalty amount of Rs 573/- The Service Tax, Interest and Penalties are to be deposited fortwith. 2.1 Appellant is registered with the service tax department and is paying service tax under the category Transfer of Goods by Road/ Goods Transport Agency Services in terms of Section 69 of the Finance Act, 1994 read with Rule 4 of the service Tax Rules, 1994. 2.2 On the basis of the information gathered from third party sources and on comparison of the amounts shown against various head in the Balance Sheet and Profit and loss Account of appellant for FY 2013-14 to FY 2017-18 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d others for transportation of PCC Poles manufactured by them on fixed rates/ per pole depending upon the distance. The rates includes transportation loading and unloading, stacking/ packing etc. Appellants engaged the services of GTA for the purpose of transportation while for the purpose of loading/ unloading, stacking/ packing they employed casual labours under their own supervision. From the invoices/ GR/ Bills of the transporters produced by them, it is evident that GTA had performed the work of transportation, and according appellant paid service tax under the RCM on the amount of freight paid by them. Copies of the GR s/ invoices and bills of the transporters were not submitted before the adjudicating authority and Commissioner (Appeal). Appellant have mentioned and charged the amount of transportation on their manufacturing invoices. Phrase only for Transportation appears on the bills/ GR s/ invoices but there is no mention of loading and unloading charges. From the ledger of loading and unloading charges and copy of payment vouchers submitted along with appeal it is evident that appellants have made payment to the casual labours employed for this purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of FY 2013-14 (Oct' 2013-Ma' 2014) to FY 2017- 18 (Apr' 2017-Jun'-2017) is liable or not. As per ST-3 return as well as submission of the party , It appears that the party got themselves registered under service tax under the category of Transport of Goods by Road/ Goods Transport Agency Service as consignee for payment of service tax in terms of the sub- section (2) of section 68 of the Act under RCM and paid the Service Tax for GTA service under RCM. I find that as per party's submission in reply to the impugned SCN, the party has affirmed that they have got the re-imbursement the amounts of expenditure occurred under Ledger account of 'Freight, Insurance Other Charges', 'Loading Unloading Charges', 'Pole Shifting Stacking Charges', Freight, Outward Other Charges ' for the period from FY 2013-14 (Oct 2013-Ma' 2014) to FY 2017- 18 (Apr 2017-Jun' 2017) from M/s Purvanchal Vidyut Vitran Nigam Limited (here-in-after referred to as 'M/s PVVNL'). It appears that the party has not included all amounts receipt towards 'Freight, Insurance Other Charges' 'Loading Unloading Charges', 'P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Charges for the period of FY 2013- 14 (Oct 2013-Ma' 2014) to FY 2017- 18 (Apr' 2017-Jun' 2017) made vide impugned SCN is proper and party is liable to pay the amount of Rs.3,31,667/-under GTA Service along with appropriated interest. . 7.6. Now, I am taking up the third issue viz. Service Tax under RCM on the Expenditure shown under the head 'Legal professional Charges' as per Balance Sheet P/L account for the FY 2013-14 (Oct 2013-Ma' 2014) to FY 2017- 18 (Apr' 2017-Jun' 2017). As per Notification No. 30/2012-ST dated 20-06-2012, i legal service IS provided or agreed to be provided by the individual advocate or firm of advocates by way of legal service to a business entity located in the taxable territory then recipient of service would be liable for payment of Service Tax under reverse charge mechanism. The party has agreed that they have failed to pay service tax on 'Legal and Professional Charges'. However, they have paid the Service Tax of Rs. 3,818/- along with interest of Rs. 4,236/- and penalty of Rs. 573/- deposited vide challan CTIN No. 2009280651 dated 26.09.2022 on the total Amount of Rs. 28,238/- in contrary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to GTA and loading unloading charges and separate ledger is also prepared for loading/ unloading charges and pole shifting stacking charges. Any service provided along with GTA service that is part of composite service and not as separate supplies. However, if such incidental services are provided as separate service and charged separately, whether in the same invoice or separate invoice they shall be treated as separate work. The confirmation of Service Tax of Rs.3,31,667/- on loading/unloading charges and Pole shifting stacking charges incurred by the appellant under GTA is not proper as these charges have been paid to casual labours engaged for the purpose and not GTA. 4.3.2 It has been held in the impugned order that the appellant have received the reimbursements of the amount of expenditure occurred under ledger account for freight, Insurance other charges , Loading and unloading charges Pole shifting stacking charges', freight, outward other charges for the period 2013-14(Oct'13 to March'14) to F.Y. 2017-18 (Upto June'17) from PVVNL and the party has not included all amounts of receipt towards Freight, Insurance other charges , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant that charges of PCC per poles as per distance has been provided in the agreement with PVVNL. The charges of Loading and unloading charges, shifting stacking charges are claimed to be billed to buyers along with invoice. On examination of the ledger A/c it is found that vouchers type have been mentioned but no document/voucher has been provided to show the details of transaction whether the same is against consignment note of GTA or transaction against any sale. It is also seen that that the appellant is a manufacturer of PCC poles and the transaction of sale of PCC pole on payment of central excise duty/VAT, should be inclusive of all the expenses incurred on account of manufacture and sale. These expenses, if part of sale must have to undergo burden of VAT. However the appellant did not provide any documentary evidence to show that these expenses are part of sale and undergone burden of VAT. Hence it is clear that these expenses reimbursed by the recipient are part of services on account of Loading and unloading charges , shifting stacking charges . 4.3.5 Now it is to be seen that whether these services are ancillary in nature for transportation of goods by road. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs.58,760/- shown under Legal Professional Charges' are related to expenditure incurred on amount paid to CA for tax audit, cost of TDS filing to Accountants, cost of stamp paper, cost paid to Excise consultants, court expenses, miscellaneous expenditure etc. Out of these expenses, only the amount paid as legal expenditure to individual advocates or a firm of advocates is chargeable to service tax under RCM. The CA fees, statutory fees etc. are not amount paid to Advocates or firm of Advocates for legal services. 4.4.1 It has been held in the impugned order that the appellant failed to provide in support of Rs.58,670/- as expenses not incurred for advocates or firm of advocates for legal services and therefore held the value of Legal and professional charges as mentioned in expenditure side of Profit Loss A/c to be taxable under RCM. 4.4.2 It is observed that the expenses mentioned under head of 'Legal Professional charges' have been held to be taxable under RCM treating the same as expenses towards legal charges paid to Advocates Group of Advocates for the legal services and appellant liable for payment of under RCM as per provisions of Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loading Charges, Pole shifting and stacking services. When the services are received from two different sources how can the same been clubbed under the category of GTA services as composite service. The entire case of the revenue is based creating a composite service of GTA by including these charges while determining the taxable value. Appellant is not providing GTA service to their customers PVVNL, but are manufacturing and selling the PCC Poles to their customers, which they deliver to their customer at the location specified by the customer. For delivering the PCC poles, appellant recover the charges on per pole basis dependent upon the distance. Whether these charges need to be added to the assessable value for payment of Central Excise duty is not the question before me. But the question which I am concerned is whether these services can be said to be composite service received by the appellant for determination of the taxable value for payment of service tax under the category of GTA services. I do not find any merits in the order holding so, as when the services are received from separate source and accounted separately in separate ledgers their cannot be any question of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere paid to GTA. Not even a single invoice to this effect has been produced or relied upon by the revenue in entire proceedings. Hence I do not find any merits in this demand. Professional and Legal Services: 4.5 Appellant ahs admitted the part demand to the extent of Rs 3181/- along with the interest of Rs 573/- during the course of investigation and prior to issuance of Show Cause Notice. 4.6 They have challenged the remaining demand of Rs 8216/- (Rs 11,397-Rs 3,181/-). While challenging the said demand they have stated that the expenditure which has been shown in the profit and loss account, is inclusive of the expenditure incurred on the purchase of stamp papers, CA for tax audit, cost of TDS filing to Accountants, excise consultants. 4.7 Notification 30/2012-ST dated 20.06.2012 provides for payment of service tax on reverse charge basis by the recipient of the services in certain cases as specified in the said notification. The relevant excerpt of the said notification is reproduced below: GSR ......(E).-In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), and in supersession of (i) notification of the Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of this notification I do not find any merits in respect of the demand made by the revenue on the expenditure incurred by the appellant which they have categorized under the category of Professional and Legal charges , which in fact are not paid to advocate or the firms of advocate. Along with the appeal appellant have furnished the vouchers of payment, ledger accounts in respect of these expenses, which substantiate their claim that these expenditures were made for the purchase of stamp papers, for TDS return filing, cost of court expenses/ fees etc. The ledgers of these expenditure were also produced before the lower authorities, and Commissioner (Appeal) has in the impugned order referred to some of the entries made in these ledgers. In view of the discussion as above I am not in position to uphold this demand too. 4.8 Thus I do not find any merits in these two demands and can uphold the impugned order to the extent of tax deposited by the appellant along with interest during the course of investigation (Rs 3181/- + Rs 573/-). This amount had been deposited by the appellant even prior to issuance of the SCN. As the amount is meager and has been deposited even prior to i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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