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TMI Blog2024 (10) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no question of imposition of penalty under Section 76. It is also observed that when the demand is not maintainable, there is no question of interest on the differential demand of service tax. Hence, the interest demand on the differential service tax liability is not maintainable. The impugned order is set aside - Appeal allowed. - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. RAJU Shri Amber Kumrawat, Advocate appeared for the Appellant Shri Anand Kumar, Superintendent (AR) appeared for the Respondent ORDER RAMESH NAIR The issue involved in the present case is that Whether the security services received by NTPC Ltd. from CISF has been correctly valued under Section 67 of the Finance Act, 1994 for the purpose of discharging service tax liability on reverse charge basis. M/s NTPC Ltd. (hereinafter referred to as the Appellant ) are holding Service Tax registration for payment of Service Tax under various categories of services such as rent a cab service, consulting engineer service, manpower recruitment and supply agency service business support service, etc. The Appellant are availing security services from Central industrial securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) of the Finance Act, 1994 demanding an amount of Rs. 5,58,727/- for the period October 2014 to September 2015 along with interest and imposition of penalty. The Appellant submitted their Reply dated 17.05.2016 to the above Statement. 1.5 The aforesaid Show Cause Notices were adjudicated upon by the Ld. Commissioner vide Order-in-Original No. 119-120/ADJ/DEM/JCVVP/ 16-17 dated 29.09.2016 wherein the Ld. Joint Commissioner confirmed the proposals made in the show cause notices. Being aggrieved and dissatisfied by the order in original passed by the Ld. Joint Commissioner, the Appellants preferred an appeal dated 09.02.2017 before the Commissioner (Appeals) Central Excise, Customs and Service Tax, on various grounds. 1.6 The Ld. Commissioner (Appeals) vide Order-in-Appeal No. VADEXCUS- 002- APP-439-2017-18 dated 25.09.2017 (hereinafter referred to as the Impugned Order ) wherein the Ld. Commissioner dismissed the appeal of the Appellants on the following grounds: The Appellants have not paid service tax on the total amount charged by CISF for providing security service along with additional consideration by way of cost of additional facilities in accordance with the MOU entered betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure, if any, on part of the Appellants not to pay service tax. Hence, in terms of section 80 of the Act, penalty cannot be imposed under Section 78 of the Act. 2.4 The Appellants submit that where the demand is not maintainable, there is no question of interest on the differential demand of service tax. Hence, the interest demand on the differential service tax liability is not maintainable. He has relied on the following judgments:- Union Of India and Anr. versus M/S. Intercontinental Consultants And Technocrats Pvt. Ltd., 2018 (3) TMI 357 - SUPREME COURT; Central Industrial Security Force versus Commissioner Of Customs, C.E. S.T., ALLAHABAD, 2019 (1) TMI 1661 - CESTAT ALLAHABAD; C.G.S.T,C.C.E., Dehradun versus Commandant CISF Unit, 2019 (2) TMI 1175 - CESTAT NEW DELHI; Central Industrial Security Force versus Commissioner of Central Excise ST, Rajkot, 2024 (4) TMI 391 - CESTAT AHMEDABAD; Central Industrial Security Force versus Commissioner of Central Tax, Visakhapatnam, 2024 (5) TMI 565 - CESTAT HYDERABAD; Commissioner of Central Excise St, Rajkot versus the Commandant Central Industrial Security Force, Unit : Civil Air Port Rajkot and the Commandant Central Industrial Securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant extract of the above mentioned decision is reproduced below:- 7. We find that the issue to be decided is whether costs reimbursed by the appellant to CISF for medical telephone facilities, imprest expenses and notional value for rent free accommodation, free supply of rented vehicles, etc. are to be added to the assessable value for payment of service tax on reverse charge basis. The appellant is already depositing service tax on reverse charge basis on the cost of deployment, cost of arms and ammunition, cost of clothing items (uniforms), etc. which is not in dispute. We find that the Allahabad Bench of the Tribunal in the case of Central Industrial Security Force v Commissioner of Customs, C.E. S.T., Allahabad, Appeal No. ST/70293/2016-CU[DB] decided on 9th January, 2019, has already settled the issue in favour of the appellant to hold that expenses incurred towards medical Services, vehicles, expenditure on Dog Squad, stationery expenses, telephone charges, expenditure incurred by the service recipient for accommodation provided to CISF etc are not includible. Further, the Principal Bench at New Delhi in the case of Commr. of CGST, Cus C. Ex, Dehradun vs. Commandant CIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which is reproduced below: 3. Having considered the submissions made by both sides, we find that Hon ble Delhi High Court held in the case of Intercontinental Consultants Technocrats Pvt. Ltd. (supra) that provisions of Rule 5 of Service Tax (Determination of Value) Rules, 2006 were not in accordance with the provisions of Section 67 of Finance Act, 1994 and therefore, the reimbursable expenses paid to the service provider are not includable in the assessable value. We also note that Hon ble Supreme Court has upheld the said decision of Hon ble Delhi High Court and held that Section 67 of Finance Act, 1994 authorizes only such consideration which is received by the service provider for assessment of service tax. By following the said ruling of Hon ble Supreme Court we hold that the impugned order is not sustainable. 4. We, therefore, set aside the impugned order and allow the appeal. From the above decisions, it is seen that the demand raised by the Department is unsustainable and liable to be set aside. 4.2 We further observed that the appellant are not liable to pay service tax on the value of accommodation, vehicles for transportation, telephone facilities, etc. and it is fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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