Service Tax
TRT-2025-
Cestat New Delhi
Date:-28-10-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 28 October 2022
Facts –
- The Appellant, Dinesh Chandra Dubey and others were receiving commission from M/s. Adarsh Credit Co-operative Society Ltd. for providing various services including that of ‘Consultants'.
- A specific intelligence was gathered by the Officers of DGGI, Jaipur Zonal Unit about appellants to have received commission from M/s. ACCSL in lieu of providing “Business Auxiliary Services” being provided to M/s. ACCSL. But the service tax was not being paid by the appellants on the amount of the said commission received. Accordingly a show-cause notice was issued to the appellants.
- Aggrieved by the Order, appellants had filed an appeal.
Issue –
- Whether Service Tax is to be paid on commission received in lieu of Business Auxiliary Services?
Order –
- Tribunal relied the decision of Hon’ble Supreme Court in the case of Continental Foundation Jt. Venture Vs. Commr. Of C. Ex. Chandigarh-I reported as 2007 (216) E.L.T. 177 (S.C.), in this case the appellants were under bona fide belief that the service tax is not applicable on the services provided by them that the services of commission agents are not covered under negative list under Section 66D of the Service Tax Act. The same has nowhere been denied by the appellant. Hence, there arises no doubt as far as the liability of the appellant to pay the service tax on the amount of commission received is concerned, however, within the normal period of their respective show cause notice.
- The reason for such bona fide belief stands corroborated from the fact that the service tax was neither collected by them from M/s. ACCSL nor accordingly, was paid by the appellant. There is no denial to the fact that appellants have not charged service tax from M/s. ACCSL. There is also no denial to the fact that the entire amount of commission was shown by the appellants in their income tax returns and the tax liability under direct taxes was duly discharged by the appellants. These perusals and undisputed facts are sufficient for to hold that there was no mala fide intent on the part of the appellants to evade the payment of service tax.
- Thus, extended period of limitation is held to have wrongly invoked by the department.
- Appeal is allowed.
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