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TMI Blog2025 (2) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be the consideration in money charged by the service provider. Therefore, it is primarily important to determine the value on which service tax shall be levied on a specific percentage and such value should be value of taxable service. Clause (44) of Section 65B of Finance Act, 1994 has provided for definition of service and it has elaborately dealt with a list of activities which shall not be included in such definition. Further, Section 66D of Finance Act, 1994 has provided for negative list of services where activities covered by such negative list do not qualify to be taxable service. Therefore, it is clear that while determining the value of taxable service under Section 67 ibid, such aspect as to the activities which are covered by negative list and activities which are mentioned in the definition of service as those which are not covered by the said definition, become important. Therefore, for arriving at the amount of service tax not paid or not levied arriving at correct value of taxable service which has not suffered service tax needs to be determined - Further, there are services where entire or part of service tax is to be paid by service recipient. Further, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.10.2023 to the said show cause notice. Through the said defence reply, appellant submitted that there was no law that permits assessment of service tax on the basis of income as reflected in Form 26AS and profit and loss account of the income received from the service recipient by adopting the highest value as consideration under Finance Act, 1994 and that service tax was demanded on gross value of works contract service provided by the appellant denying the abatement as admissible under Service Tax (Determination of Value) Rules, 2006. They further submitted that the appellant had deposited an amount of Rs.1,11,77,605/- towards service tax and also claimed the benefit of cenvat credit of Rs.65,00,000/- and that no details were provided in respect of the allegation that service tax was collected without giving any details from whom and when service tax was collected. Original authority adjudicated the said show cause notice and confirmed the demand of service tax of Rs.5,05,21,843/- and appropriated the amount of Rs.1,11,77,605/- deposited by the appellant. The original authority imposed a penalty of Rs.3,93,44,238/- under Section 78 of Finance Act, 1994 and also ordered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is not in accordance with law. f) In respect of the allegation that service tax was collected by the appellant but was not deposited, he has submitted that no information about the person from whom service tax was collected and how much amount from an individual is collected and when it was collected and for rendering which service has not been stated anywhere in the show cause notice for the appellant to defend their case. Therefore, the said allegation and confirmation by the original authority is in violation of principles of natural justice. g) The original authority has refused to allow the cenvat credit of Rs.65,00,000/- stating that the same has not been claimed in ST-3 returns. The said cenvat credit is admissible to the appellant as provided by Cenvat Credit Rules which have not provided any condition that cenvat credit shall not be available and admissible to the appellant if the appellant fails to record the same in the ST-3 return. The admissibility of cenvat credit is on the basis of admissible taxes and duties paid on the input, input service or capital goods received by the appellant and there are no allegations that the said capital goods were not received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case no investigation was conducted by the Revenue in respect of procurement of raw material, manufacture and clearance of the goods regarding which demand is confirmed, as the demand is only based on the figures submitted to the Health Department for procurement of order in response to tenders, therefore, in view of the decisions relied upon by the appellant the demand and imposition of penalties are not sustainable hence set aside. The appeals are allowed. Appellants are entitled for consequential relief, if any, in accordance with law." 5. We find that in para 4 of the final order in the case of Deltax Enterprises (supra) relied upon by the appellant, it is held as follows:- "4. Admittedly, the appellant did not maintain detailed accounts for all the transactions undertaken by them. They have availed the provision of Section 44AD of Income-tax Act for filing returns. This formed basis for service tax demand as the income shown is much higher than the declared consideration for taxable service. We note that the appellants categorically asserted that they did not provide any other service other than those, the details of which have been submitted to the lower authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the value of taxable service under Section 67 ibid, such aspect as to the activities which are covered by negative list and activities which are mentioned in the definition of service as those which are not covered by the said definition, become important. Therefore, for arriving at the amount of service tax not paid or not levied arriving at correct value of taxable service which has not suffered service tax needs to be determined. Further, there are services where entire or part of service tax is to be paid by service recipient. Further, there is a mega notification which provided conditional exemptions to various activities from payment of service tax. In addition, there are Service Tax (Determination of Value) Rules, 2006 which provide abatement to services such as works contract service. Unless all these aspects of Service Tax law are taken into consideration, the allegations of service tax not paid or not levied are not sustainable. We do not find any such exercise was done in this case.
7. We, therefore, set aside the impugned order and allow the appeal with consequential relief to the appellant.
( Order pronounced in the open court on 25. 02. 2025 ) X X X X Extracts X X X X X X X X Extracts X X X X
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