Service Tax
TRT-2025-
Cestat Chennai
Date:-09-06-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 09 June 2023
Parties: M/s. Stahl India Pvt. Ltd. Vs Commissioner of Central Excise
Facts –
- The Appellant, M/s. Stahl India Pvt. Ltd., had entered into a Service Level Agreement (SLA) with their holding-company M/s. Stahl Holdings, BV, Netherlands and paying service tax under the head Management or Business Consultancy service.
- On verification of documents and accounts of the appellant, for the year 2005 – 2009, it was noticed that the appellant has not included VAT amount in the value of taxable service to arrive at the service tax payable by them which has resulted in short-payment of service tax.
- The demand was confirmed along with interest and penalty.
Issue –
- Whether service tax is payable VAT amount?
Order –
- The Tribunal observed that the It is also seen that the period involved is prior to 18.4.2006. The judgment of the Hon'ble High Court of Bombay in the case of Indian National Shipowners’ Association which has been affirmed by the Hon'ble Supreme Court has held that the service recipient cannot be called upon to pay service tax under reverse charge mechanism for the services rendered prior to the introduction of Section 66A. Thus, the demand upto 18.4.2006 is set aside
- When the entries are made in the books of accounts of the appellant in respect of the amounts which are to be paid to the overseas entities, prior to 10.5.2008, there is no liability to pay service tax merely on such accounts. The provision to make such book entries taxable came into existence after the amendment in section 67 with effect from 10.5.2008. Thus demand from 18.4.2006 to July 2007 is also set aside.
- The department has not been able to establish any positive act of suppression of facts with intent to evade payment of tax on the part of the appellant. In such circumstances, the demand raised invoking the extended period cannot sustain and the Show Cause Notice is time-barred.
- The appeal is allowed.
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