The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax cannot be levied for total receipt falling below the threshold limit of Rs. 10,00,000/- during the financial year.
The appellant M/s K.B. Sing, engaged in providing services of “maintenance and repair” and “commercial and industrial construction” and had not paid service tax on the amounts received towards such services. The Deputy Commissioner passed the order in demand for a service tax of Rs. 3,02,906/- along with interest and imposing penalties under Sections 76, 77, and 78 of the Finance Act 1994.
The appellant submitted that an abatement of 67% of this receipt is available towards the cost of material during the year 2007-2008. The appellant failed to produce any invoices or work orders to substantiate his claim. Further, he contended that the total amount received for services after abatement will be only Rs. 3,55,419/- which would be below the exemption limit of Rs. 10,00,000/-.
The Tribunal observed that the Commissioner (Appeals) was veracious in not allowing the abatement of 67% of the gross receipt. No service tax can be levied for the financial year 2008-2009, as the total receipts fall below the threshold limit of Rs. 10,00,000/- during the financial year. The Tribunal came to a conclusion that the demand for service tax needs to be set aside for the financial year 2008-2009 and held that no interest or penalty can be levied for this financial year.
The Coram of Mr Justice Dilip Gupta, President, and Mr P.V. SubbaRao, Member (Technical)while allowing the appeal has held that “the impugned order is set aside with consequential relief to the appellant.
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