Page 106 - GSTL_11th June 2020_Vol 37_Part 2

192 GST LAW TIMES [ Vol. 37
6. We have carefully considered the submissions made by both sides
and perused the record. We find that appellant have strongly submitted that on-
ly the commission amount received by them is chargeable to service tax and re-
maining amount such as salary of the security guards, PF, ESI etc. is not liable to
service tax. We find that as per Section 67, the gross amount charged towards
providing service shall be liable to service tax. As regards the salary of security
guards, PF and ESI, the same is not an expenditure incurred by the appellant on
behalf of the service recipient. The service recipient is concerned about the over-
all provision of security service irrespective of bifurcation of payment of service
paid by the service recipient to the appellant. Therefore, it cannot be said that
salary of guards, PF, ESI etc. are reimbursable expenditures to be deducted from
the gross value of security service. Therefore, we do not agree with the appellant
(assessee) that only the commission portion is liable to tax and not the gross val-
ue.
7. As regards the submissions made by the appellant on limitation, we
find that right from the beginning the appellant were paying service tax only on
the commission portion without adding the value towards salary of guards, PF,
ESI, etc. They have declared to the department on the said value on which the
service tax is paid which is representing only commission. Therefore, the de-
partment is of the belief that the appellant is paying service tax on the gross val-
ue of security service provided by them to their recipient of service. We find that
as per provisions of security service, there is absolutely no ambiguity that on
which value the service tax will be chargeable. Therefore, it cannot be said that
the appellant was under bona fide belief that only commission is chargeable to
service and not the total gross value of service provided by them. Even in case of
judgments cited by the appellant, the relief was given from the penalty by invok-
ing Section 80 whereas the demand of service tax on the gross amount was main-
tained. In these facts, we are of the view that the show cause notice has rightly
invoked extended period and therefore, the demand for the extended period is
sustained.
8. As regards the penalty imposed under Section 78, we find that since
the appellant despite clear provisions for value of security service, paid service
tax on commission only, the bona fide is not proved. Hence, the penalty imposed
under Section 78 is maintained.
9. As regards the Revenue’s appeal against the benefit of 25% penalty,
extended by Learned Commissioner (Appeals), we find that in terms of Hon’ble
Supreme Court decision in the case R.A. Shaikh Paper Mills Pvt. Limited v. CCE &
Cus, Daman - 2010 (259) E.L.T. 53 (Guj.), the option of 25% penalty should be giv-
en explicitly in writing by the Adjudicating Authority in the order. On perusal of
the adjudication order, it is clear that the Adjudicating Authority has not given
the benefit of 25% penalty in writing in the adjudication order. Therefore, the
Commissioner (Appeals) is legally correct in extending the benefit of 25% penal-
ty.
10. On the above settled position, the Revenue’s appeal is not sustaina-
ble. As a result, the assessee’s appeal as well as Revenue’s appeal are dismissed.
MA (Ors) also stand disposed of accordingly.
(Pronounced in the open Court on 30-10-2019)

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