Service Tax
TRT-2025-
Cestat Allahabad
Date:-19-10-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 19 October 2023
Parties: M/s Adept Vs Principal Commissioner of CGST & Central Excise, Lucknow
Facts –
- The Appellant, M/s Adept, is a partnership firm, engaged in Operation & Maintenance of Telecom/Mobile towers.
- During the inspection upon reconciliation of the figures of income reflected in P & L Statements and ST-3 returns it was observed that the Party was paying Service Tax only on the income booked by them under "Operation and Maintenance Charges' whereas they were not paying any Service Tax on the gross income booked under 'Supply of Diesel'.
- Accordingly a show cause notice was issued demanding service tax along with interest and penalties.
Issue –
- Whether the appellant is required to discharge service tax on the gross income booked under 'Supply of Diesel'?
Order –
- The Tribunal observed that the issue involved in the matter is covered on all fours with decision rendered by CESTAT in case of Ganpati Associates [Final Order No.50686-50688/2019 dated 12.04.2019 in ST/51074 & 55554/2014]. Though this order is for the period prior to the amendments made in Section 67 in 2015 as consequence of the decision of the Hon’ble Delhi High Court in case of Intercontinental Consultants in our view the principles, enunciated in the said order are applicable to facts of the present case.
- CESTAT has held that “Even if diesel is considered to be free of cost supplied by the service recipient to the service provider, no service tax can be levied on it in view of the decision of the Supreme Court in Bhayana Builders. The impugned order proceeds on the footing that diesel is an input required for provision of the output services. This is a completely wrong impression as the diesel filling is the service for which a separate consideration has been provided in the contract and diesel cannot be considered as an input for the provision of this service.”
- In view of the decision of the CESTAT, the Appeal is allowed.
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