Service Tax
TRT-2025-
Cestat Ahmedabad
Date:-24-01-24
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 24 January 2024
Parties: Prabhakar Enterprises Vs C.C.E BHARUCH
Facts –
- The Appellant, Prabhakar Enterprises, rendered services of cleaning, house-keeping and manpower supply to Indian Railways, Airport Authority and also provided to SEZ Units.
- A show cause notice was issued demanding service tax on various incomes disclosed in their financial records. After examining the details, the Commissioner has dropped the demand in respect of services provided to SEZ and to railways and confirmed the demand in respect of services provided to others. Aggrieved by the order both sides are in appeal.
Issue –
- Whether the appellant is liable to pay service tax on the services provided to railways and whether the extended period of limitation can be invoked?
Order –
- The Tribunal observed that in the case of Mukesh Kalway 2017 (3) GSTL 183 (Tri. Del.), the Tribunal has held that service tax is payable in respect of cleaning services provided to railways. In view of above, there is no merit in the order of the Commissioner dropping the demand in respect of cleaning services provided to railways and the order to that extent is set aside and appeal of Revenue to that extent is allowed.
- Commissioner himself has held that no duty was payable in respect of the services provided to railways under the belief that the said services are not chargeable to tax for various reason cited in the impugned order. In those circumstances, it will not be out of place to hold that the assessee could also have harbored similar beliefs in respect of services provided to railways. Thus, extended period of limitation cannot be invoked in respect of the amount demanded as service tax in respect of supply of services of railways.
- Section 67(2) of the Finance Act 1994 clearly stipulates that gross amount charged by service provider should be treated as inclusive of Service Tax payable. In the instant case, the entire calculation stand made on the basis of gross amount charged by the appellant and therefore, the benefit of cum tax has to be granted to the appellant.
- Thus the appeal of revenue and the appellant are partly allowed.
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