Team One India Pvt Ltd Vs Commissioner of Customs (CESTAT Hyderabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad partly allowed the appeal filed by Team One India Pvt. Ltd. against an Order-in-Original confirming service tax of ₹1,05,44,311 along with interest and imposing penalties under Sections 76, 77 and 78 of the Finance Act, 1994.
The appellant, engaged in providing Architect Services, was registered with the Service Tax Department and regularly filed ST-3 returns. During an audit conducted in September 2011, the Department noticed that service tax had allegedly not been discharged on amounts representing Tax Deducted at Source (TDS) deducted by customers while making payments. A show cause notice was issued proposing recovery of service tax with interest and penalties, which was subsequently confirmed by the adjudicating authority.
Before the Tribunal, the appellant contended that the Department had incorrectly treated the gross receipts reflected in the bank account as taxable value exclusive of service tax. It argued that the invoices clearly showed that the consideration received from customers was inclusive of service tax and, therefore, cum-tax benefit ought to have been granted. The appellant also submitted that the Department ignored the TDS component while computing taxable value and failed to extend cum-tax benefit. According to the appellant, inclusion of the TDS component and recomputation on a cum-tax basis would substantially reduce the tax liability. It further stated that service tax of ₹74,23,440 had already been paid before the audit and an additional ₹20,50,142 along with interest had been paid before adjudication.
