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TMI Blog2024 (5) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... made whether the said amounts pertains to material or services. Further took notice that the assessee have been able to segregated/identify the material portion and the service portion with respect to the receipts as mobilisation advance, and admittedly service tax is already discharged on the service portion, he was pleased to drop the demand - there are no error in the findings of the Learned Commissioner on this issue and accordingly this ground is rejected. Short payment of service tax on the alleged difference between trial balance and ST3 returns - HELD THAT:- In the impugned order the Learned Commissioner observed that the assessee have already furnished the details of services rendered to SEZs developer/units along with the purchase order and the relevant documents and that the same have been perused. Further observed that the assessee produced the relevant forms and there is no dispute regarding the provision of service to SEZs units/developer. Further that denial of benefit of exemption by relying upon procedural requirement of notification would be against the provisions laid down in the SEZs act. Exemption cannot be denied on the ground that form A 1 and A 2 have not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BLE Mr. ANIL CHOUDHARY , MEMBER ( JUDICIAL ) And HON BLE Mr. A. K. JYOTISHI , MEMBER ( TECHNICAL ) Shri Ayyam Perumal , Special Counsel for the Appellant Ms R. Radhika Chandrashekar , Advocate for the Respondent ORDER [ ORDER PER : ANIL CHOUDHARY ] This appeal is filed by Revenue against the impugned Order-in-Original passed by the Commissioner dropping the proposed demand(s) in part. 2. The respondent assessee is registered with the department and interalia providing services of Works Contract Service, erection commissioning and installation service, maintenance or repair service and various other services. The respondent maintained proper books of accounts and regularly filed the service tax returns and have discharged the service tax under the respective categories. The Revenue during the verification of the financial records found some apparent discrepancies or short payment of service tax as follows: i) Alleged non-payment of service tax on mobilisation advance received. ii) Alleged short payment of service tax on the reconciliation of values shown in books of accounts with that declared in ST3 returns (this includes supplies made to SEZ). iii) Alleged short payment of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on advance portion attributable to the service portion. So far the portion of advance is related to material component the adjudicating authority have dropped the demand. It is contended that mobilisation advances were received mainly for mobilisation of materials and not for any services provided or to be provided, since provision of service did not require mobilisation. Accordingly prior to 01.04.2011 service tax is not attracted on such advances received towards material portion. They had enclosed the statement showing service portion in the mobilisation advances on which they have discharged service tax and in support thereof had enclosed statement and copies of invoices raised for mobilisation advance. 5. The Learned Commissioner on examining the evidence produced found force in the contentions of the assessee. It took notice that service tax has admittedly been paid on the service portion in the mobilisation advances. The Learned Commissioner also examined some of the invoices for advance which were only for the cost of materials, wherein the description of invoice it was mentioned value of items delivery at site 30% initial advance received adjusted. Thus there is no error i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground Learned Counsel for the respondent assessee urges the show cause notices proposed to demand service tax without even prima facie examining the books of accounts and the method of accounting followed by the assessee. A bald allegation that there was a short payment of service tax on reconciliation of taxable value as per profit and loss account of the assessee with the amount declared in the ST3 returns filed. 11. The SCN proposed to demand service tax with respect to the following: i) value in the relevant ledgers presenting consideration towards supply of materials ii) demand of service tax on the services provided to SEZs units, which is an exempted service. 12. For the period April 2008 to June 2011 the Department has calculated the service income on accrual basis, whereas service tax liability during the said period was on receipt basis. The SCN proposed to levy service tax by taking the entire amount shown in the profit and loss account, considering the same as the value of services rendered, without appreciating the fact that the figures were inclusive of value of materials and that service tax have already been discharged on the value of service. In terms of Section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee have already furnished the details of services rendered to SEZs developer/units along with the purchase order and the relevant documents and that the same have been perused. Further observed that the assessee produced the relevant forms and there is no dispute regarding the provision of service to SEZs units/developer. Further that denial of benefit of exemption by relying upon procedural requirement of notification would be against the provisions laid down in the SEZs act. Exemption cannot be denied on the ground that form A 1 and A 2 have not been produced. reliance is placed on the ruling of the Hon ble High Court of Andhra Pradesh and Telangana [2019 (31) GSTL 596 AP] wherein it has been held that denial of benefit of exemption by relying upon procedural requirement of notification would be against the provisions laid down in the SEZs Act. 17. The 3rd ground raised by revenue with respect to non-payment of GTA service tax as the recipient of service. Learned Special Counsel urges that on reconciliation of the taxable value of GTA service as per profit and loss account with that of declared value in ST3 returns for the period 2008 09 to 2011 12, there appeared to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of service tax for the financial years 2012 13 and 2013 14 also. Deferred revenue is, in accrual accounting, money received for goods or services which have not been delivered. According to the revenue recognition principal, it is recorded as the liability until delivery is made at which time it is recognized as the revenue. The Adjudicating Authority have simply accepted the explanation put forth by the assessee without verifying any documentary proof. The assessee was not asked to produce any documentary proof in the defence and hence the dropping of the demand is bad in law. 21. Assailing the ground, Learned Counsel for the assessee urges that the additional revenue had been recognised in the books of account as accounting adjustment, but neither it was a consideration for service provided nor it was the payment received against any service provided, and therefore no service tax is leviable on the said amount. For the period prior to 01.04.2011 service tax was discharged on receipt basis on the total bill/received. An amount that the accounts reflected under accounting head as additional revenue is only a book adjustment for which they had neither raised any invoice not rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in the bills raised to the volume of work done, was calculated as per the norms prescribed under the accounting standard prescribed. Learned Commissioner have categorically observed I find that the deferred revenue is recognised in the books of account as an accounting adjustment but there is no payment received against the same nor any invoice was raised on the customer. Hence no service tax was liable to be paid on such book adjustment. Further observed similar is the case with unbilled revenue as it was recognised in the books of account as an accounting adjustment but there was no payment received against the same nor any invoice was raised on the customer. Accordingly it was held that no service tax was liable to be paid on such book adjustment. 24. We find that there is no error or impropriety in the findings recorded by the Learned Commissioner. Accordingly we reject this ground also raised by the Revenue. 25. In view of our aforementioned findings and observations, we find no merits in this appeal by Revenue and accordingly we dismiss the appeal. The impugned order in original is upheld. ( Operative part of this Order was pronounced in court on conclusion of the hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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