Cal. HC: POSH Committee to Re-Consider Complaint Dismissed for Being Barred by Limitation  ||  Financial Assistance Scheme for District Judiciary Employees Introduced by CJ of Madras HC  ||  MP HC: ?20 Lakh Minimum Threshold for Loan Recovery by NBFCs Not Applicable on HFCs  ||  Delhi High Court: Man Held Guilty of Criminal Contempt for Posting Video Defaming Judges  ||  Kar HC: State to Not Take Action Against Old Vehicles For High-Security Number Plates Till June 12  ||  Delhi High Court: Centenary Chance Exams of Delhi University Not a Matter of Right  ||  Delhi High Court: Centenary Chance Exams of Delhi University Not a Matter of Right  ||  Delhi High Court: Centenary Chance Exams of Delhi University Not a Matter of Right  ||  Ker. HC: To Seek Investigation u/s 156(3) of CrPC, Pre-Conditions Have to be Satisfied  ||  OBC Certificates Issued In West Bengal After 2010 Cancelled by Calcutta High Court    

J J Patel and Brothers vs. CCE And ST, Surat-I - (Customs, Excise and Service Tax Appellate Tribunal) (11 Apr 2022)

Electricity charges reimbursed to the service provider by the service recipient not includible in gross value of service

MANU/CS/0083/2022

Service Tax

In present case, an enquiry was conducted against the Appellant and on verification of documents, department noticed that, assessee are providing 'Business Auxiliary Service" to Gujarat Gas Co. Ltd. in the form of infrastructural Support by way of providing land, building & equipment's, manpower, electricity connection and selling and billing of CNG gas, collection of bills etc.

On further verification of Bank Statement & ST-3 returns, it was noticed that there was huge difference in taxable value shown in ST-3 returns and amount of service charge received in Bank account. The Appellants submits the reason of difference that the difference is due to reimbursement of electricity charges. A show cause notice was issued demanding service tax on reimbursement of electricity expenses. The show cause notice also proposed interest thereon and also to impose penalties.

The adjudicating Authority confirmed the demand of Rs. 45,65,552 along with interest and imposed equal penalty under Section 78 of the Finance Act, 1994. In addition, penalty of Rs. 10,000 under Section 77 was also imposed. Being aggrieved by such order, Appellant filed appeal before Commissioner (Appeals) who vide impugned Order-In-Appeal upheld the same. Hence, present Appeal.

The issue is squarely covered by the decision of this Tribunal in the case of Kiran Gems Pvt. Ltd. where it was held that, electricity charges reimbursed to the service provider by the service recipient are not includable in gross value of renting of immovable property service. Said principle is equally applicable in the instant case.

The issue involved has been settled as the electricity charges reimbursed to the service provider by the service recipient not includible in gross value of service. Present Tribunal is of the view that the demand is not sustainable. Accordingly, the impugned order is set aside. Appeal allowed.

Tags : DEMAND   CONFIRMATION   LEGALITY  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved