Whether the service tax is payable on the difference between values of services reflected in ST-3 returns and income in profit & loss account where such difference is due to non taxable services.

PJ/Case Laws/2010-11/1112

Prepared By:
CA. Rajani Thanvi &
Arpita Birla

CASE:- NISHAN DITECTIVE & SECURITIES SERVICES P. LTD. V/s C.S.T. AHMEDABAD

Citation: 2010 (20) S.T.R. 184 (Tri. – Ahmd.)

Issue:-
Whether the service tax is payable on the difference between values of services reflected in ST-3 returns and income in profit & loss account where such difference is due to non taxable services.

Brief Facts:-
The appellant is engaged in providing of “Security Services” and were holding service tax registration for the said purpose. Proper ST-3 returns were being filed by the appellants along with payment of service tax. However, as a result of scrutiny it was found that the value of services as reflected by them in their ST-3 returns was lower than the income reflected in their profit and loss account. The appellant in his statement recorded on 26-9-2005 stated that apart from providing the security services, they are also providing other services like housekeeping, sweeper, sanitation, gardener, helper and labour etc. and such services are non-taxable services. The difference in the value of taxable services as reflected in the ST-3 returns and the total income as shown in profit and loss account is on account of the income received from such other non-taxable services.The show cause notice is issued demanding the service tax and same was confirmed along with penalties by the Adjudicating Authority. Hence the appellant is in appeal before Tribunal.

Appellant’s Contention:-
The appellants have challenged the demand on the point of limitation as well as on merits, it is also the appellant’s contention that details of non-taxable services were given to the Assistant Commissioner who had not considered the same and by referring to the department’s investigation, demand for the entire period has been confirmed against them.

Reasoning of Judgment:-
As it is a case of suppression of value of taxable services, in which case the extended period of five years would be available to the Revenue. However, as regards the merits of the case, The tribunal found that the appellants failed to substantiate their stand that the reason for difference in the value of services reflected in ST-3 return and the income shown in the profit and loss account is on account of the fact that they were also providing the non-taxable services. It is seen that the Revenue has made investigations from one M/s. Automotive Manufactures Pvt. Limited as regards non-taxable services and found that the details do not tally. Accordingly, they have held that all the services provided by the appellants are under the category of security services.

It is noted that there is nothing on record to show that such details along with invoices were placed before the adjudicating authority. The honorable court set-aside the impugned order and remand the matter to original adjudicating authority with directions to re-adjudicate the case.

Decision:-
Stay petition as also the appeal disposed off. The case was remanded.

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PJ/Case Laws/2010-11/1112

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