The Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad, ruled that the amount of Rs. 1,43,25,803/- which was paid to M/s Shriram EPC Ltd in Indian Rupees is not liable for payment of any service tax.
The tribunal found that both the lower authorities have assumed that the total amount shown as foreign currency expenditure in the financial statement of the appellant is an amount paid to foreign service provider, therefore, the total amount is liable to payment of service tax.
The tribunal observed that an amount of Rs. 1,43,25,803/- was neither paid to the foreign person nor in foreign currency. In this position, the amount of Rs. 1,43,25,803/- which was paid to M/s Shriram EPC Ltd in Indian Rupees is not liable for payment of any service tax.
The bench said that both the lower authorities have not taken pain to verify the actual transaction, they have gone merely on the nomenclature i.e. foreign currency expenditure shown in the appellant’s books of account. To know the actual nature of transaction, the documents such as ledgers, Vouchers, invoices, payment particulars, etc. can be verified to bring the fact on record that whether this amount was paid to M/s Hamon & CIE (International) in foreign currency or paid to M/s Shriram EPC Ltd in Indian Rupees.
Facts
The appeal was directed against the Order-In-Appeal passed by the Commissioner (Appeals) Central Excise, Customs and Service Tax, Surat whereby the demand of Service Tax was confirmed on the ground that the value of service was booked as ‘Foreign Currency Expenditure’ in the appellant’s books. Therefore, the Revenue is of the view that this amount was paid to the foreign person against the receipt of taxable service.
Submissions
Prakash Shah, Counsel with Suyog Bhave Advocate appearing on behalf of the appellant submitted that out of the total management fees of Rs. 2,86,51,605/- paid an amount of Rs. 1,43,25,803/- was paid to M/s Hamon & CIE (International) based in foreign country paid in foreign currency on which the service tax was paid under VCES Scheme.
He contended that as regard the remaining of Rs. 1,43,25,803/- , the same was paid to M/s Shriram EPC Ltd. in India in Indian currency on which M/s Shriram EPC Ltd has discharged the service tax. The demand was raised only on the ground that the total amount of Rs. 2,86,51,605/- was booked as foreign currency expenditure.
He submitted that the amount paid to M/s Shriram EPC Ltd was inadvertently included and shown as foreign currency expenditure, whereas the same was not paid to M/s Hamon & CIE (International) and accordingly, is not liable to service tax.
Conclusion
“On verification, if it is found that the amount is paid to M/s Shriram EPC Ltd in Indian rupees, as submitted by the appellant, the same is not liable to service tax. Accordingly, for the limited purpose of verification of the actual nature of transaction, the matter needs to be remanded to the adjudicating authority”, the tribunal observed.
The tribunal set aside the impugned order and remanded the matter to the adjudicating authority to decide a fresh.
Case Details
Case Name: Hamon Shriram Cottrell Pvt Ltd v/s Commissioner of C.E. & S.T.
Citation: Service Tax Appeal No. 10049 of 2019
Tribunal: CESTAT Ahmedabad
Coram: Member (Judicial), Mr. Ramesh Nair And Member (Technical), Mr. Raju