2024-VIL-377-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax – Transactions between Associated Enterprises - Demand of service tax on provisional entry made in the book of accounts for expenses towards the payments to be made to associate enterprises - point of taxation with respect to associated enterprises – Extended period of limitation – HELD – Pursuant to amendment to Section 67 of the Finance Act, 1994 vide Section 90 (C) of the Finance Act, 2008, the determination of taxable value in case of associated enterprises was to be made on the basis of any amount credited or debited in any book of accounts of the person liable to pay service tax, where the transaction was between the associated enterprises. Thus, the determination of taxable value was to be after taking into accounts all the credit and debit and credit entries made by the person liable to pay service tax, in case of transaction of services between the associated enterprises - the appellants were require to pay the service tax as advance tax, at the time of making the expense entry in their book of accounts, for the expense incurred towards the services received from their associate enterprises - Appellant is required to pay Service Tax on the service received by them from their associate enterprises on the taxable value as determined in terms of section 67 of the Finance Act, 1994. Appellant should furnish the complete details of the expenses incurred by it towards the receipt of these services to the adjudicating authority - The service tax liability is to be discharged by the appellant in the manner and at the time as determined in terms of Rule 6 of the Service Tax Rules, 1994 read with Rule 7 of Point of Taxation Rules, 2011. For any delay in payment of Service Tax from the due date interest at appropriate rate should be paid by the appellant in terms of Section 75 of the Finance Act, 1994 for period of delay in payment of tax - Extended period of limitation for making the demand as per Section 73 is invokable for making this demand - Demand of service tax needs to be recomputed after determining the value of taxable service as per section 67 and after adjusting the tax actually paid by the appellant. Reconciliation in the figures of tax paid as per show cause notice and as claimed by the appellant should be done before concluding any short payment of service tax - Penalty under Section 78 is imposable but needs to be redetermined after computing the tax short paid - For re-computation of the demand of tax and interest, and the penalties imposable the matter need to be remanded back to the original authority – the appeal is partly allowed
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