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TMI Blog2024 (9) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... n of services other than the cleaning services. However these expenses could not be called as amounts received as Pure Agent . The value of the taxable service as has been rightly held by the first appellate authority shall be the gross amount received for the provision of service as per Section 67 of the Finance Act, 1994. Hence claiming deduction of these amounts from the gross amount received could not be a permissible deduction as per the Section 67 or Rules made there under. These cannot be said to be reimbursable expense also as claimed by the appellant. Hence on merits there are not much force in the submissions made by the appellant. Time Limitation - HELD THAT:- In the impugned order or order in original/ show cause notice, nothing has been stated as to how the mere fact of not disclosure of certain amounts in the ST-3 return would have constituted suppression with the intention to evade payment of service tax - no reason put forth in the show cause notice or the orders of lower authorities for holding that the appellant has suppressed the facts with intent to evade payment of service tax - there are no merits in the impugned order to the extent it uphold the demand by inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (iv) I also confirm a late fee of Rs.4,500.00 (Rupees four Thousand Five only) upon the Noticee for delayed filing of ST-3 returns under Section 70 of the Act read with Rule 7C ibid and section 174 of the CGST Act, 2017 (v) I do not impose any penalty under section 77(1)(c) of the Finance Act, 1994 read with section 174 of the CGST Act, 2017. 2.1 The appellant registered with the department vide Service Tax and is engaged in rendering taxable services not covered in the negative list under Section 66D of the Finance Act, 1994 nor exempted under Mega Exemption Notification No.25/2012 - Service Tax dated 20th June 2012. 2.2 As per the information received from the Income Tax Department, the appellant received Rs.2,44,74,682/- for the period 2014-15 but, had discharged their due service tax liability of Rs. 11,21,389/- only by declaring their assessable value as Rs.90,72,862/- and thus had failed to discharge their due Service Tax liability to the tune of Rs.19,03,682/- on the remaining value of amounts received towards provision of taxable services. 2.3 A show cause notice dated 24.10.2019 was issued to the appellant asking them to show cause as to why:- (i) Service Tax (including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses head and as per settled law reimbursable expenses could not have been included in value of taxable services provided. Extended period of limitation is not invokable. Reliance is placed on the following decisions. Citi Bank N A [Hon‟ble Supreme Court Order dated 09.12.2021 in civil Appeal No 8228 of 2019] T S Motors India Private Ltd [Final Order No 70112/2022 dated 17.06.2022] Dinesh Chandra R Agarwal Infracon Pvt. Ltd. [Final Order No 12431/2023 dated 02.11.2023] Shri Rajeshwar Prasad Choudhari [Final Order No 77516/2023 dated 22.11.2023] Piyush Sharma [Final Order No 77332/2023 dated 17.10.2023] International Air Charter [Final Order No 51662/2023 dated 13.12.2023] 3.3 Learned authorized representative reiterated the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submission made in appeal and during the course of arguments. 4.2 Impugned order records the findings as follows: The appellant on the other hand has argued that they had provided services of Man power supply and recruitment agency and therefore the amount received as re-imbursement should not be treated the -value of taxable service. As per Balance sheet for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of man power is integral part of service and all charges pertaining to him will form part of the value. It is settled law that service tax is to be charged on the full consideration for the supply of manpower whether full time or part time. The value includes staff salary and contributions, if any, as held by Hon'ble Kerala High Court in the case of M/s Security Agencies Association v/s UOI reported at 2012 (28) STR 03 (Ker.) Therefore, I am of the considered-view that the entire amount received by the appellant will form part of the taxable value and the appellant is liable to pay service tax on the gross amount received by them in lieu of rendering Mar power supply services. In respect of contention of the appellant challenging invocation of extended period of limitation, I find that on the basis of third party data provided by the Income Tax Department, the department is able to unearthed the service tax evasion amounting to Rs 19,03,,082/-. If the information would not have been received from the Income Tax Department, the said evasion of service tax couldn't be detected This is a clear cut case of suppression of facts with willful intention to evade payment of duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit Expenses an amount of Rs 2,20,78,246/- towards Operating Wages to staff . 4.4 Appellant has during the course of hearing of appeal produced the certificate as follows from the Chartered accountant explaining the difference in the value as reflected in the information provided by the Income Tax department and ST-3 return for the period in dispute. 4.5 Thus during the period of dispute appellant has incurred the expenditure towards the provision of services other than the cleaning services. However these expenses could not be called as amounts received as Pure Agent . The value of the taxable service as has been rightly held by the first appellate authority shall be the gross amount received for the provision of service as per Section 67 of the Finance Act, 1994. Hence claiming deduction of these amounts from the gross amount received could not be a permissible deduction as per the Section 67 or Rules made there under. These cannot be said to be reimbursable expense also as claimed by the appellant. Hence on merits we do not find much force in the submissions made by the appellant. 4.6 On the issue of limitation we agree with the submissions made by the appellant as they had d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 75 of the Act. The Noticee have also rendered themselves liable for penalty under Section 78 of the Act for suppressions of the facts with intention to evade the payment of Service Tax. The Noticee also appears to be liable for penalty under Section 77(1)(c) of the Act as the Noticee failed to furnish information called by the Central Excise officer/ CGST officer despite repeated reminders. 4.8 Following has been recorded in the order in original: Thus the demand of service tax short paid amounting to Rs 19,03,682/- is liable to be confirmed. I observe that when service tax has been short paid with intent to evade the tax, Interest under section 75 of the Act ibid is mandatory and I am inclined to demand interest for delayed payment at applicable rates till he actual date of payment of all the service tax confirmed. I also observe that the noticee has short paid the service tax by way of suppressing the facts with intent to evade the payment of service tax, extended period under proviso to section 73(1) of the Finance Act, 1994 has rightly been invoked. With the same reasoning, penalty equal to service tax of Rs 19,03,682/- confirmed under section 78 of the Act ibid should b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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