Page 189 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] HAJEE A.P. BAVA & CO. v. COMMR. OF C. EX. & SERVICE TAX, JAIPUR-II 107
employer. The Service Tax amount involved on the value of above said amount
realized separately and not included in the value of taxable services declared to
the department comes to Rs. 76,20,415/- which is recoverable from the assessee
along with interest.
5. A show cause notice accordingly directed the appellant to show
cause within 30 days as to why :
“(i) Service Tax of Rs. 76,20,415/- should not be recovered from them
under proviso to Section 73(1) of the Finance Act, 1994.
(ii) Interest at the prevailing rates should not be recovered from them
on Service Tax of Rs. 76,20,415/- under Section 75 of the Act ibid.
(iii) Penalty should not be imposed upon them for short payment of
Service Tax under provisions of Section 76 and Section 78 of the Fi-
nance Act, 1994.”
6. The appellant filed a detailed reply denying the allegations and stat-
ed that it had not paid/short paid Service Tax amounting to Rs. 76,20,415/-. It
was specifically stated that though it was doing the job of fabrication and erec-
tion for which specific work orders were issued, but in case a client required
some other activity to be performed not connected with the main work order,
then separate work orders were issued for actual mobilization of labour and hire
of the crane for the use of such a client and during the period 2007-08 such work
orders were issued for which no Service tax was liable to be paid.
7. The Commissioner, however, did not accept the contention of the
appellant. The findings are as follows :-
(i) As per Rule 5(1) of the 2006 Rules, where any expenditure or costs
are incurred by the service provider in the course of providing tax-
able service, all such expenditure or costs shall be treated as consid-
ered for the taxable service provided or to be provided and shall be
included in the value for the purpose of charging service tax on the
said service.
(ii) The assessee is registered with the Service Tax Department since
2004 and should be well conversant with the provisions of the Act
and the Rules made thereunder. The entire amount charged for
providing services as per work order has been splitted in different
parts by raising separate bills. In view of above, it is clear that the
assessee had used the machinery, tools, equipments, cranes and la-
bour etc. for completion of each work allotted to them under con-
tract for which it realized a value of Rs. 83,09,388/- during the peri-
od 2004-05 for 2006-07 and Rs. 5,50,83,066/- during the period 2007-
08. This value was not included in the value of taxable services de-
clared to the department. The Service Tax amount involved on such
value is recoverable from the assessee.
(iii) The assessee has contended that the demand for Rs. 5,50,83,066/-
for the period 2007-08 is time barred by one year eight months
twenty eight days. It contended that the said amount has already
been disclosed in the Service Tax ST-3 return dated 23 July, 2008 for
the period October to March at Serial No. 4 under head payment of
service tax and sub-head amount billed for exempted service other
than export and hence the show cause notice should have been
issued within one year from the date of filing the return. A copy of
GST LAW TIMES  2nd July 2020  189