Order Date – 14 December 2023

Parties: Vainavi Industries Ltd and B. Satish Kumar Managing Director, Vainavi Towers Vs Commissioner of Central Tax Secunderabad – GST

Facts –

• The Appellant, Vainavi Industries Ltd, rendering taxable services under the heard “Online Information and Database Access Service or Retrieval Service” (OLIDAR) and other services. 
• Pursuant to inquiry, it was observed that the company is an Internet Service Provider and they also undertake Works Contract with various other ISPs for designing and installing network. They were charging service tax on the same.
• However due to change in staff and shifting of premises they could not filed the ST-3 returns after period ended September 2015. Consequently show cause notice was issued for proposing demand of service tax not paid and irregular availment of cenvat credit and exemption.

Issue –

• Whether the appellant is required to discharge the service tax?

Order –

• The Tribunal observed in the issue of availment of Cenvat credit after more than one year from the date of issue of invoice that the Appellants have regularly taken Cenvat credit and no case is made out of having taken credit after more than one year from the date of invoice. Thus the ground is allowed in favour of the Appellant.
• Regarding the short payment of tax on OIDAR service, the tribunal found that evidently Appellants have not disputed the amount of turnover as calculated by the Revenue and the same is matching with their financial records for the period April 2011 to March 2016. Since it was already held that the Cenvat credit availed by the Appellant is legal and proper and the same is not irregular. Thus, it was held that Appellants have rightly discharged the service tax and there is no case of escaped service tax.
• Further regarding the non payment of tax on the difference amount in Profit & Loss Account, vis-à-vis ST3 returns, it was found that Appellants have got matching turnover for sales of goods, which is not exigible to service tax during the period of dispute. Accordingly, the demand is set aside. Regarding irregular availment of exemption, it was held that Appellants have simply provided multimedia presentation, website hosting and domain registration services which are not taxable under the category of OLIDAR service.
• The Tribunal further held in the issue of demand of Service tax under RCM towards security service and consultancy service the expenses in question, incurred by the Appellant, have not been received from Advocate or a firm of Advocates towards legal services. Accordingly, no service tax demand is attracted under RCM.