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TMI Blog2024 (7) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax, held that ' If any double taxation is involved the legislature itself has, in express words, sanctioned it. It is not open to any one thereafter to invoke the general principles that the subject cannot be taxed twice over.' It is found that the TDS paid/ deposited to the government exchequer by the appellant arises out of a statutory liability. In the normal course TDS cannot be held to be a consideration for the service unless specifically mandated/ deemed by law - the contention of the Appellant that the amount would not be part of the consideration for the taxable services received by them as per Section 67(1)(a) of the Finance Act, 1994 in the absence of the legislature itself sanctioning such a provision, mandating doubl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the net sales of their products. During the scrutiny of details furnished by the appellant regarding the TDS portion of the royalty payment made for the period April 2010 to September 2010 and October 2011 to March 2012, it revealed that while paying service tax on the royalty payments made to the foreign company, the appellant had not paid service tax on TDS portion of the royalty amount retained by them. As it appeared to the department that TDS portion retained by them was also taxable, Show Cause Notices dated 21.12.2010 and 2.7.2012 were issued for recovery of the dues. After due process of law, the original authority confirmed the demand proposed in the Show Cause Notices along with interest and also imposed penalties. Aggrieved ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant s own case, vide Final Order No. 40878/2018 dated 2.3.2018 and Final Order No. 42344/2021 dated 24.9.2021, it was held that service tax liability has to be discharged on amounts paid to the foreign service provider and there cannot be a demand on the TDS portion which has been separately discharged by the appellant. Accordingly, she prayed for setting aside the demand confirmed in the impugned order. 5. The learned AR Shri N. Satyanarayanan reiterated the findings in the impugned order. 6. Heard both sides and perused the appeal documents. 7. Prima facie there does not appear to be a bar on tax being a part of assessable value. The Hon ble Apex Court (5 judges) in Jain Bros. Others vs The Union Of India Others [1970 AIR 778 / 1970 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, we observe that service tax is not payable on the TDS paid by the appellant on behalf of the foreign service provider. 9. The issue is no longer res integra as it has already been decided by the Tribunal in the appellants own case and in the case of Adani Bunkering Pvt. Ltd. Vs. CCE, Ahmedabad II reported in 2024 (1) TMI 984 CESTAT Ahmedabad wherein the Tribunal has held that TDS deposited to the Income Tax Department in relation to the payment made to the foreign service provider over and above the invoice value of the services, is not liable to service tax. The relevant portion of the order is reproduced below:- 9. In our considered view, the plain reading of Section 67 with Rule 7 of Service Tax Valuation Rules, in this case in han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non- resident since it is not towards value/consideration, there is no merit in requiring such assessee to include even the TDS it paid in the value of services, as in the case on hand. There is an argument advanced for the Revenue that as per the terms of agreement, it is for the appellants to bear the TDS and thus it is to be treated as part of the consideration. We are unable to yield to the said contentions since in such agreements where one is a non-resident and such non-resident doesn't have any PE, then it becomes the responsibility of the other party who is an Indian resident, to meet with the TDS obligation arising on account of the agreement in question. Even if such clause is not there in the agreement, still the residen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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