Custom, Excise & Service Tax Tribunal
Kerala State Council For Science ... vs Trivandrum on 9 August, 2024
ST/22019/2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE
TRIBUNAL BANGALORE
1st Floor, WTC Building, FKCCI Complex, K. G. Road,
BANGLORE-560009
Regional Bench COURT-1
Service Tax Appeal No. 22019 of 2015
[Arising out of the Order-in-Original No.TVM-EXCUS-000-COM-05-15-
16 dated 11.06.2015 passed by the Commissioner of Central Excise,
Customs & Service Tax, Thiruvananthapuram.]
M/s. Kerala State Council for Science
Technology and Environment, .......Appellant
Sasthra Bhavan, Pattom,
Trivandrum - 695 004.
Versus
Commissioner of Central Excise, ......Respondent
Customs & Service Tax, ICE Bhavan, Press Club Road, Thiruvananthapuram - 695 001.
Appearance:
Mr. Cherian Punnose, Advocate Appeared for Appellant Mr. K.A. Jathin, Authorized Representative for Respondent Coram:
HON'BLE MR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) FINAL ORDER No. 20636 of 2024 DATE OF HEARING: 09.08.2024 DATE OF DECISION: 09.08.2024 PER: D.M. MISRA This is an appeal filed against Order-in-Original No.TVM- EXCUS-OOO-COM-05-15-16 dated 11.06.2015 passed by the Commissioner of Central Excise, Customs & Service Tax, Thiruvananthapuram.
2. Briefly stated the facts of the case are that the appellant are registered under the category of "Scientific or Technical Page 1 of 4 ST/22019/2015 Consultancy services", operating as an autonomous body constituted to encourage the activities related to Science and Technology and declaredly plans and implements Science and Technology promotion, research and developments programs; also they serve as a umbrella organization for Seven Research and Development (R & D) centres, namely Kerala Forest Research Institute (KFRI), Centre for Earth Science Studies (CESS), Centre for water Resources Development & Management (CWDRM), National Transportation Planning & Research Centre (NATPAC), Jawaharlal Nehru Tropical Botanic Garden & Research Institute (JNTBGRI), Srinivasa Ramanujan Institute for Basic Sciences (SRIBS), State-Centre Resource Institute for Partnership in Technology (SCRIPT). On the basis of the intelligence, investigations were initiated by the Special Cell of Trivandrum, Commissionerate. The balance sheet and profit and loss statement have been analyzed and after carrying out necessary scrutiny of the documents submitted by the appellant, show-cause notice was issued to them on 20.10.2014 for recovery of the service tax amounting to Rs.4,94,96,024/- along with interest and penalty. On adjudication, the Commissioner after taking note of the submissions and other aspect, reduced the demand to Rs.3,25,15,948/- with interest and penalty of Rs.10,000/- was imposed under Section 77 and penalty of Rs.2,41,11,962/- was imposed under Section 78 of the Finance Act 1944. Hence, the present appeal.
3. At the outset, the learned advocate for the appellant has submitted that the present show-cause notice has been issued to the appellant who has never rendered any services nor executed them and Services Tax demand has been raised solely on the basis of consolidated balance sheet which included the income and expenditure of other R & D units. It is his contention that as and when, services were rendered by respective R & D units, service tax has been discharged. He further submits that even though the appellant had raised this issue before the learned Commissioner that the entire income of the appellant received Page 2 of 4 ST/22019/2015 from grants-in-aid and other non-taxable receipts, however, the same were not considered by the learned Commissioner. To establish his case, he has referred to the consolidated balance sheet for the year ending 31.03.2010 [page No.117 to 138 of the paper-book]. Further, he has submitted that while adjudicating the demand for the subsequent period, the Commissioner taking note of the submissions advanced before him, dropped the demand for the period 2014- 2015; therefore, the present appeal be also decided on the same line.
4. Learned Authorized Representative [AR] for the Revenue reiterating the findings of the learned Commissioner, submits that it seems that before the adjudicating authority, they have not specifically raised the above issue; therefore, the matter may be remanded to analyze the same for the Financial year i.e. 2009 - 2010 to 2012 - 2013.
5. Heard both sides and perused the records. We find that the short issue involved in the present appeal is: whether service tax demand can be confirmed as alleged in the show-cause notice, when the learned Commissioner had confirmed that the appellant had rendered taxable service for the period in question. Further, from the subsequent Order of the Commissioner placed by the learned counsel for the appellant, we find that on the very same issue, after analyzing the arguments and submissions made by the appellants, the learned Commissioner has dropped the demand accepting appellant's contention that they have not rendered any taxable service during the period; Other R & D centers have rendered the taxable service tax and discharged service tax. We do not find merit in the contention made by the learned AR for the Revenue that the appellant has not specifically argued before the adjudicating authority that the income received are mostly from grants-in-aid, which is not taxable, as is contrary to the finding recorded by the adjudicating authority. In the circumstance, it is appropriate to remand the matter to the Page 3 of 4 ST/22019/2015 adjudicating authority to decide the case in the light of subsequent order passed.
6. All issues are kept open, appellant is at liberty to file all necessary and relevant documents before the adjudicating authority. Needless to mention that appellants be given a reasonable opportunity of personal hearing. Consequently, the impugned order is set aside and the appeal is allowed by way of remand.
(Dictated & pronounced in the open court) (D.M. MISRA) Member (Judicial) (R. BHAGYA DEVI) Member (Technical) Ganesh Page 4 of 4