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BEFORE THE APPELLATE TRIBUNAL SINDH REVENUE BOARD
APPEAL No. ATIl73 OF 2015
Mis. Pak Shaheen Container Services (Pvt) Ltd24-27, Reclaimed Area, Timber Pond,Pak Shaheen Avenue,Keamari Town,Karachi APPELLANT
Versus
Commissioner (Appeals), SRB, Karachi RESPONDENT
For the AppellantFor the Respondents
Represented Syed Sibte Asif Naqvi, ITPRepresented by Mr. Zamir Ali Khalid, Deputy Commissioner(Legal) & Ms. Anum Sheikh Assistant Commissioner Unit-14,Sindh Revenue Board
ORDER
Date of HearingDate of Order
09.07.2015.05.08.2015.
RAZIA SULTANA TAHER. An appeal has been filed by the Appellant, challenging the
Order-in-Appeal No. 108 of 2015, dated 07-05-2015, passed by the Commissioner (Appeals)
confirming the Order-in-Original No. 559 of 2014 dated 27-10-2014 passed by the Assistant
Commissioner, SRB Unit-14 . The said order directs the Appellant to pay Sindh Sales Tax
amount of Rs. 3,843,456/- on account of baving provided or rendered taxable services of
contractual execution of work and also baving short declared the same for the tax period July
2012 to June 2013, alongwith default surcharge (to be calculated at the time of payment). In
addition, also ordered the payment of penalty of Rs. 192,173/-.
2. In brief, the facts of the case as stated in the Order-in-Original are that while comparing
the Financial Statements with Sales Tax Returns for the tax period July 2012 to June 20] 3, it
transpired that Mis Pak Shaheen Container Services (Pvt.) Ltd hereinafter referred to as
'P SC S' or as 'th~PCllant' earned revenue of Rs. 28,351,000/-, which invol ved Sindh Sa1';.----'
Tax of Rs. 4,536,1601- from the services of contractual execution of work and an amount of
Rs. 17,953,993/- which involved Sindh Sales Tax of Rs. 2,872,6391- from Terminal Operator
but they had failed to pay Sindh Sales Tax on these services.
3. The concerned Assistant Commissioner, in the Order-in-Original No. 559 of 2014,
observed and concluded that the Appellant had accepted the tax liability of Rs. 2,520,428/- and
had deposited the sum of Rs. 600,000 vide CPR No. S120 1409120250 1073486 without
payment of default surcharge. Thus, the Appellant was ordered to deposit the remaining Sindh
Sales Tax amount of Rs. 1,920,428/- and the default surcharge on the amount of Rs.
2,520,428/- (to be calculated at the time of payment), under Section 44 of the Sindh Sales Tax
on Service Act, 2011, in the Sindh' s Government head of account' B-023 84'. They were also
ordered to pay the penalty of Rs. 126,0211-, in terms of Section 43(3) of SST on Service, Act
2011 for violation of sections 8 and 17 of the SST on Services Act, 2011 (hereinafter referred
to as "SSToS Act, 2011).
4. In the said order it was further stated that the Appellant provided or rendered taxable
services of contractual execution of work and had short declared its taxable services involving
sales tax Rs. 3,834,4561- which was assessed under section 23(1) of the SSToS Act, 2011 as
tax payable. The said amount was also ordered to be recovered under section 47(1 A) of SSToS
Act, 2011, alongwith default surcharge under section 44 of SSToS Act, 2011. An amount of
Rs. 1,92,173/- was also ordered to paid as penalty under section 43(3) of SSToS Act, 2011 for
violation of sections 8 and 17of the said Act.
5. The Commissioner (Appeals), in his order at paragraph 32, stated that the Appellant
vide reference bearing no nil dated 03.12.2014 SRB Inward No 53123 dated 03.12.2014 had
already deposited admitted liability along with default surcharge amounting to Rs 2,942,0191
vide 3 CPRs bearing Nos: Sl-20140912-0250-1073486 for RS 6,00,0001- Sl-20141124-1069-
11695524 Rs 1,500,0001- and S1- 20141126-1069-1189710 for Rs 842,0191- short payment on
account of rendering and providing taxable services falling under the tariff heading 9819.9090
i.e Terminal Operater services.
6. Thereafter, the Commissioner Appeals, SRB dismissed the appeal and also upheld
paragraphNo. 21of theordefor;g;nay
7. The Appellant, in the grounds of appeal and m subsequent written and oral
submissions, have stated as follows:-
(i). That they are doing business of rendering of services on account off-Dock Terminal
Operators. The Sales tax was wrongly levied on the services rendered on account of lift on! lift
off and Maintenance of Repair (MnR), as the same have not specifically been defined under
the respective Tariff Heading nor in relevant rules i.e. rule 40 for the purpose of the
chargeability of the Sales Tax.
(ii). That under the law, the services which are taxable under one tariff heading of the
Second Schedule cannot be taxed under another tariff heading i.e. 9809.0000. The services
provided or rendered by the Appellant were included in the Second Schedule to the SST on
Services Act, 2011 under tariff Heading 9819.9090 "Services Provided or rendered by Port
Operators, Airport Operators, Airport Ground Service Providers & Terminal Operators" and
the legislature only mentioned 'Other import related services provided in Port Area and
Terminal Area'.
(iii). That the maintenance receipts were brought within the ambit of SST vide Finance
Act,20 14, in Second Schedule of the SST on Services Act 2011 under Tariff Heading
9822.2000 which implies that maintenance receipt prior to the insertion of separate tariff
heading were not liable to tax during the tax period under review.
(iv). That relevant rule 40 was amended vide notification No-SRB-3-4/13/2014 dated 1st
July, 2014 for chargeability of said receipt and, therefore, the taxpayer could not be charged for
providing services prior to be said amendment.
(v). That the Appellant earned revenue from execution of contractual work. The statement
was made as an alternative plea to support their primary stance that the nature of services of
Maintenance & Repair of containers performed was not within the scope of chargeability of
sales tax under the Act read with rule 40 of SSToS Rules, 2011.
8. The Appellant further submitted that the other dispute is bifurcation of income of MnR
and LOLO. The amount of MnR was enhanced from 7.1 million to Rs. 24.02 million and
added that, the value of LOLO was declared as Rs. 2l.21 million which was reduced to Rs. 4.3
million. While enhancing the amount ofMnR, the amount relating to Storage & Transportation
9. It was also argued that, services rendered on account of lift on I lift off (LOLO) and
Maintenance & Repair (MnR) services being ancillary services performed by a terminal
operator outside the port area were not liable to SST. Under the law only services provided by
the terminal operators within the Port area were chargeable to the Sales Tax. The technical
lacuna which existed in rule 40 was subsequently rectified by the legislature by amending the
relevant rule 40 vide Notification NO:SRB-3-41l3/2014 Dated 1st July,2014. Thus perusal of
the previous and amended rule 40 would show that, the word 'POI1 Area & Terminal Area'
have been removed & import related services have been elaborated. Further sub-rule (2) of rule
40 has been added whereby all the services of Terminal Operator within the fold of taxable
services have been wrapped. Thus, with the amendment in rule 40, it is conclusively
established that LOLO and M&R services prior to amendment of the said Rule were not
subject to tax.
10. Furthermore, it was argued that invoking of the provision of sub-section (1 A) of
Section 47 for recovery of alleged short payment of sales tax on LOLO and MnR was not
justified, as the same were not chargeable to Sales Tax under the Act and rules framed
thereunder. Here, the nonpayment was not hit by Section 47 (lA), as it was a matter of
difference of opinion of the taxability of services where no fraud or misstatement was
involved. The Appellant representative stated that all relevant case record and data had been
provided to the Department.
11. The Appellant placed reliance upon the following reported judgements (i) (1971
SCMR) MIS HIRJINA & Co. (Pakistan) Ltd, Karachi-Appellant Vis Commissioner of Sales
Tax Central, Karachi. Interpretation of Statutes-Taxing Statutes-Court cannot imply anything
not expressed in statute.
(ii). 1973 SCMR 445 Commissioner of Agricultural Income Tax East Bengal Vs. BWM
Abdur Rehman Manager -------- Interpretation of Statutes -Fiscal legislation-whether or a
particular matter in within a taxing statute-Only the letter of the Law must be looked to- No
room for any intendment to equity or presumption about tax.
(iii). 2006 PTD 1709 Commissioner of Income Tax East Zone Karachi vis Mis W.J Towel &
Co Agencies (Kuwait) Karachi Income Tax Reference No 70 and 232 of 1998, decided on 14th
April, 2006. Interpretation of Statutes. Tax law --- While interpreting any provision of law and
more particularly a taXF plain language of the law is to be looked into .... Words used bV
the Legislature are to be interpreted and they are not to be substituted or changed, as there is no
room for any intendment if the language used by the Legislature is clear and unambiguous. (iv)
(2009) 100 Tax 49 (H.C.Kar). (IN THE SINDH HIGH COURT KARACHI PAKISTAN
PETROLEUM LIMITED VIS COMMISSIONER OF INCOME TAX & OTHERS).
Interpretation of Statute-Words-Plain Meaning -Principle whether while
interpreting statute words should be read in its plain meaning and no words should be added or
deleted to arrive at interpretation of the statute.
12. Mr. Zamir Khalid D.C, argued that if the institution is listed in the schedule and
connotation service is used against that institution, all services provided by that institution are
taxable. It was further argued that exemption notification was not applicable to the Appellant
for the reason that the appellant was only providing services and the invoices produced by the
appellant do not contain any provision of supply of goods. The D.C relied upon un-reported
judgement in the case of MIS J.S Bank Ltd. Vis SRB c.p N0.4420/20 14 and judgement in the
case of Federation of Pakistan VIS Haji Mohammad Sadiq & Others 2007 PTD 67. In this case
it was held as follows:-
"A perusal of column-Il of the schedule speaks about the services
provided or rendered y banking companies etc. in respect of advance
made to any person. It is to be kept in mind that above discussion as it
has already been held that institutions named in column-Il of Item 14.14
provides service in respect of advance made to any person. It is also to be
observed that the word 'services' used in this column, represents to more
than one services. Thus, the arguments put forwarded on behalf of the
Respondents' counsel that as in the case of Hirjina (ibid) services were
specified, therefore, to that extent the item of the schedule discussed
therein is valid and in the item under discussion this expression has not
defined, therefore, on account of vagueness the provision has no
substance. The word 'services' in plural sense is sufficient to conclude
that it covers all the services provided by the institutions named in
column-Il to its customers, therefore, the legislation instead of spelling
out each kind of the service comparing to the item of the schedule 'which
were discussed in mrjinapse, a comprehensive expression =:
has been employed. Thus, it is held that no ambiguity or vagueness can
be attached to the contents of column-Il of the item J 4.14 for the
purposes of declaring the provisions vague or unspecified".
13. The Respondent submitted comments, wherein it has been stated that the Maintenance
and Repair (MnR) services are covered under tariff heading 9809.0000 as they are in the nature
of contractual services which is evident from the Agreement and have been provided outside
the Port area. In the instant case neither Rule 40 nor any sub-rule thereunder nor sub-section 98
of Section 2 of the Act-20 11 have any bearing on the services rendered by the Appellant
outside the port area. The stance that the chargeability of receipt on account of MnR services
was subject to tax by amendment in Rule 40 is not correct, that Rule 40 has been amended but
it has no applicability outside the port area.
14. The Respondent's representative stated that th MnR services being a service provided
or rendered in contractual execution of work, had been taxable with effect from 1sl July, 2011
and are covered under tariff heading 9809.0000. According to the guide lines on taxable
services under Act-2011, it is stated that taxable services falling under heading 9809.0000
comes within the ambit of section 3 of the Act 2011, when services provided or rendered by
persons engaged in contractual execution of work or furnishing supplies and are subject to SST
Act 16%. The tariff heading 9809.0000 covers all such contractual services as are not
specifically described in the First Schedule to the Act-20 11 and are also not listed in the
Second Schedule thereof but are provided or rendered or supplied under a contract, including
an agreement or a purchase I supply order against a tender. Thus, the services on account of
Maintenance and Repair of containers, under contractual agreements, came within the pu~view
of taxability - as the same fulfilled both the requirements, i.e. service was not specifically
described in First Schedule nor in Second Schedule to the Act-20 11 and the service had been
provided under contract agreements between the Appellant and MIS WAN Hai Lines Ltd
Taiwan and Florins Container Services Company Ltd. Hong Kong.
15. The Respondent further submitted that the difference of opinion does not prevent the
liability to penalty for the offence of short payment.
16. The Respondent added that, service of maintenance and cleaning falls under tariff
heading 9822.2000. The said service covers the maintenance and cleaning of buildings,
commercial corny and factories only, whereas, the repair & maintenance of containey
outside the Port Area does not fall under tariff heading 9822.2000. Furthermore, the Appellant
earned revenue of Rs. 28,351,000/- and did not pay the due amount of SST of Rs. 4,536,160/-
from the services of Contractual Execution of work.
17. I have heard the arguments by both the sides, perused the record and the two orders
passed by the two forums below. I have given due consideration to the Appellants argument
that services rendered by them as an off dock terminal operator, are defined under section
2(98) of the Sindh Sales Tax on Services Act, 2011 and the procedure prescribed in rule 40 of
Sindh Sales Tax on Services Rules, 2011, apply in relation to the Terminal Operator services
falling under tariff heading 9819.9090 of the Act. Ihave also given thought to their argument
that, certain other services have also been provided but the same are not liable to tax under the
Act because services which are taxable under one tariff heading of the Second Schedule (e.g.
9819.9090) cannot be taxed under another tariff heading i.e. 9809.0000. The contention so, put
forth by the Appellant has no force because in terms of section 2(96) of the SSToS Act, 2011,
read with section 3 (I) thereof, a service which is listed in the Second Schedule to the said Act
is to be treated as a taxable service. This is further amplified and clarified on a plain reading of
the provisions of rules 4(2) and 4 (3) of the SSToS Rules, 2011, which allows single
registration of a person providing or rendering more than one taxable service. The said rule
4(3) further states that where more than one taxable service is provided by a registered person,
he may make a single application mentioning therein all the services provided by him.
18. The second argument is that there was no intention on the part of the legislature to tax
the said services of terminal operators, as SST on Services Rules, 2011 under the old rule
40(1)(v) read as 'other import related services provided in port area and terminal area'. His
further argument is that a subsequent amendment was made in rule 40 sub-rule (1) of SST on
Services Rules, 2011 by deleting the word in "port area and terminal area" and insertion of
sub-rule (2) to rule 40 wrapped up all the services of terminal operator. The Appellant argued
that the said amendments were made on 1st]uly,2014 and the services in the instant case
pertains to period prior to the amendment. The amendments made in rule 40 of SST on
Services Rules, 2011. On perusal of the records of the case, we find that the Appellant provides
2 distinct and independent taxable services of which one is this service of Terminal Operators
(tariff heading 9819.9090) and the other is the service of contractual execution of work(tariff
heading 9809.0000). The prOVISIOns
}-of rule 40 are specific for the services provided /
rendered as terminal operators. The services of contractual execution of work(tariff heading
9809.9090,there is no specific procedural rule in the SSToS Rules,2011 and, therefore, this
service and the service provider shall be governed by the general procedure of rules 24 to 29 of
the SSToS Rules,20 II. However, the service provider shall have one single registration in
relation to both the said services provided or rendered by him. The provision of rule 40 do not
absolve the Appellant from his liabilities and obligations as a service provider of contractual
execution of work or furnishing supplies under tariff heading 9809.0000, which is a taxable
service within the meaning of section 3(1) of the 2011-Act and is liable to Sindh Sales Tax
Act-2011.
19. Now coming to the third argument, the contention that AC enhanced the amount of the
receipts of maintenance and repair service (MnR) from Rs. 7.1 million to Rs. 24.02 million and
reduced the services LOLO from Rs. 21.21 million to Rs. 4.3 million. In reply the AC
submitted that the amount was calculated and determined on the basis of invoices then
provided to the department. The Appellant, at the time of hearing, acceded to the submission of
the AC and for the first time produced additional invoices at the Appellate stage, which were
not submitted at the original stage nor the same were produced or submitted before the
Commissioner (Appeals).
20. The citations relied upon by the Appellant have no relevancy to the facts in issue. To
bring the services of (contractual execution of work, distinct for terminal operator services)
rendered or provided in the instant case under rule 40 of SST on Services Rules, 2011 is simply
over-stretching of the services of 'terminal operators' as given in the said rule, whether before
or after the amendment as of 151 July, 2014, and is of no consequence.
21. In view of the fact, that complete documentslinvoices were not provided at the original
stage. There still exists disputes on the bifurcation of different services. I feel it is necessary to
provide proper opportunity to the Appellant to produce all relevant documentslinvoices upon
which he has placed reliance. I, therefore, in exercise of powers vested in the Tribunal as
provided under clause (b) of sub-section (5) 0 f section 62 of the SST on Services Act, 2011, set
aside the orders by the AC Unit-14 SRB, the Commissioner (Appeals) and remand the case to
the concerned AC-SRB to examine the documents/invoices, which would enable the
department to correctly determine which of the services provided or rendered under the
'contracts' are taxable under tarpeading 9809.0000. The Appellant are directed to prOVidj
relevant documents/information to the concerned AC-SRB who shall re-determine the tax
liability of the Appellant in the remanded case.
The Appeal is disposed of in the above terms.
~(}!J.-A ~~(Razia Sultana Taher)
Member
Karachi,Dated: 11-08-2015
Justice (Retired) Nadeem Azhar Siddiqi. I, have the privilege of goingthrough the opinion recorded by the learned Technical Member of theTribunal. While agreeing with the conclusion drawn in paragraph 20 of theorder recorded by the learned Member, SRB Appellate Tribunal, I expressmy observations, findings and conclusion as in the paragraphs following.
22.The grievance of the Appellant is charging of Sindh Sales Tax on Servicesrendered/provided by the appellant to its clients on account of Lift-On/Lift-Of (LOLO) and Maintenance & Repair (M & R) of containers. Thecontention of the appellant is that these services neither specificallydefined under the respective Tariff headings nor in the relevant RuleNo.40 framed for the purpose of chargeability of Tax from portoperators and terminal operators. He submits that the department hasenhanced the income from M&R to Rs.24.02 Million from Rs.7.1 Millionand income from LOLOwas reduced from 21.21 Million to Rs.4.3 Million.The other contention of the appellant is that the above services werebrought within the ambit of Sales Tax on Services vide Finance Act, 2014whereby Tariff Heading 98.22 and the entries relating thereto to wereintroduced to the Second Schedule of the Act. The appellant has alsochallenged the imposition of penalty and default surcharge and submitsthat there is an issue of interpretation and the department has failed toestablish wilful & deliberate default and intention not to pay the tax orevasion of tax on the part of appellant.
23)The contention of the department is that M & R services is coveredunder tariff heading 9809.0000 (services provided or rendered bypersons engaged in contractual execution of work or furnishing supplies)and are taxable since the inception of the Act of 2011. In this regard theDepartmental Representative submits that Tariff heading 9809.0000covers such services as are not specifically described in the FirstSchedule and are also not listed in the second schedule, but areprovided or rendered or supplied under a contract, including anagreement or a purchase or supply order against tender.Further contention of the respondent is that Tariff Heading 9822.0000
\lV
covers only the maintenance and cleaning of building, commercialcomplexes and factories and the repair and maintenance of containersoutside the port area does not fall under the Tariff heading 9822.0000and the maintenance outside the port area cannot be treated asmaintenance under Tariff heading 9822.0000 introduced vide FinanceAct 2014, w.e.f. 1st July, 2014. The Department defended the impositionof penalty and default surcharge by pleading that difference of opiniondoes not prevent the appellant from payment of penalty on account ofshort payment.
24)The appellant is registered as Terminal Operator under Tariff heading9819.0000 (Services provided or rendered by port operators, airportoperators, airport ground service providers and terminal operators). Thedisputes relates to the periods from July 2012 to June 2013. The serviceswhich were taxable at the relevant time were provided in rule 40 ofSindh Sales Tax on Services Rules, 2011. There is no dispute in thisregard. The dispute started when the income derived by the Appellanton account of services provided by it to its clients outside port arearelating to M&R of containers its storage and transportation was alsotaxed under some other tariff heading i.e. 9809.0000 (services providedor rendered by persons engaged in contractual execution of work orfurnishing supplies). The dispute relates to the Tax Periods from July2012 to June 2013. The appellant is discharging its obligation and paidconsiderable amount towards sales tax. During the stage of assessmenton 14.7.2014 the appellant has submitted a letter interalia pleaded asunder:-
Revenue Declared in the Sales Tax Returns Rs.130,522,708
"Revenue declared in the financial statements 2012-2013 Rs.176,738,OOO
Difference Rs. 46,215,292
Revenue relating to Diplomatic Missions Rs. 2,111,616
Revenue relating to M&R Rs. 7,139,019
Revenue relating to LOLO Rs.21,211,981 (Rs. 30,462,616)
Rs.15,752,676
Sales Tax @ 16% Rs. 2,520,428
The above said amount of Rs.15,752,676 may be said short declared but it was not
intentional and the registered did not collected sales tax on this revenue. The registered'
person wants to concentrate on his business do not want to go into litigation for this
amount. The sales tax of Rs.2,520,428/- @16% on the amount of Rs.15,752,676 may be paid
by the registered person. Your honour is requested to allow the registered person to pay the
said sales tax in 3 or 4 instalments".
(The Appellant has deposited the said amount of Rs.2,520,428/=, which fact is mentioned in
order in appeal).
From the above letter it appears that the appellant claims exemptionsfrom payment of sales tax on the following items.
"Revenue relating to Diplomatic Missions Rs. 2,111,616
Revenue relating to M&R Rs. 7,139,019
Revenue relating to LOLO Rs. 21,211,981 (Rs. 30,462,616)
25)The assessing officer has allowed exemption in respect of revenuerelating to diplomat missions. After making the payment ofRs.2,520,428/= as mentioned above the dispute remains in respect ofRs.24,021,600/= involving sales tax of Rs.3/843,456/= on account ofalleged rendering taxable services of contractual execution of work. (Theappellant disclose the value of M&R as 7,139,019/= while AssessingOfficer enhanced it to 24.02 million). It is an admitted position that theservices of M&R of containers are outside the port area and is notcovered by Tariff heading 9819-9090. The repealed rule 40 provides thatall import related services provided by a port operator and terminaloperator shall be levied to tax. The services which were taxable at therelevant time were mentioned under sub rule (1) of rule 40. Clause (v) ofsub rule 1 of rule 40 further provides that other import related servicesprovided in port area and terminal area. Admittedly the services of M&Rof containers were provided outside port area and the same is not partof the services specified under sub-rule (1) of rule 40. From rule 40 (v) itis clear that other import related services provided in port area andterminal area can be taxed. There is no discussion on the point thatwhether the services provided are relating to import related service ornot. The legislature in its wisdom has not tax certain services providedby Port or Terminal Operators outside the port area and the same
service cannot be taxed by implication. It is to be seen that storage
charges was introduced in Rule 40 w.e.f. 1st July, 2014. If the storage
charges can be taxed under Tariff heading 9809.0000 the introduction of
storage charges by way of amendment in Rule 40 is not necessary. For
interpretation of statutes levying taxes, it is established rule not to
extend their provision by implication, beyond the clear import of the
language used or to enlarge their operation so as to embrace matters
not specifically pointed out. In case of doubt they are construed most
strongly against the government and in favour of the tax payer. It is a
binding rule of construction that before taxing a person it must be
shown that he falls under the charging section as no tax could be
imposed by way of implication simpliciter. If a person has to be brought
within the ambit of the charging section it should be by clear words
otherwise he cannot be taxed at all.
26)The appellant is admittedly registered as a Terminal Operator and is
providing ancillary services of M&R of containers as the same service
appears to be part of its obligations towards its clients. The Tariff
heading 9809.0000 is a general heading to cover contractual execution
of work or furnishing supplies not falling in any other tariff heading. The
benefit under Tariff heading 9809.0000 can only be taken if the service
provided or rendered is not listed in the First or Second Schedule to the
Act and provided under a contract, including an agreement or a
purchase/supply order against tender. Tariff heading 9809.0000 has two
components i.e. providing or rendering services and furnishing supplies.
To attract 9809.0000 it is necessary that both the components are
available in the contract or agreement. This argument finds support
from the Exemption Notification No. SRB-3-4/7/2013 dated 18th June,
2013 which provides that "in relation to the work or supplies the total
value of which does not exceed 50 Million rupees in a financial year
subject to the condition that the value component of services in such
contractual execution of work or furnishing supplies also does not
exceed 10 million rupees. The other question is, whether furnishing
supplies can be taxed under the- Act of 2011. Since no arguments have
~
been advanced by the parties on this point this will be considered in
some other appropriate proceedings.
27)Once a person is registered in a particular heading and is providing
ancillary services not covered by such heading the services cannot be
taxed by taking benefits from some other heading of general nature.
The value of services rendered or provided on account of M&R of
containers is Rs.24,021,600/= which as per appellant also includes the
cost of repair, storage and transportation of containers and these type
of services are not taxable under Tariff heading 9819.9090 and cannot
be taxed under Tariff heading 9809.0000. Even if it is presumed that the
services of M&R is taxable under Tariff 9809.000 the amount involved is
Rs.24,021,600/= involving sales tax of Rs.3,843,456/=. The appellant
referred to Exemption Notification No. SRB-3-4/7/2013 dated
18.06.2013, which provides that in relation to work or supplies the total
value of which does not exceed 50 Million in a financial year subject to
the condition that value component of service in such contractual
execution of work or furnishing supplies also does not exceed 10 million
rupees. The value of services is less then RS.50 Million and the appellant
is entitled to the benefit of exemption. The Assessing Officer has not
done any exercise in this regard and tax was levied on the entire amount
of Rs.24,021,600/= without considering the implication of the
Exemption Notification. Furthermore the Assessing Officer enhanced the
value of M&R from RS.7.1 Million to Rs.24.02 Million and the value of
LOLO was reduced from 21.21 Million to 4.3 Million without any
discussion and justification. It appears that it was done just to enhance
the value to services to levy more sales tax, which apparently is not
proper. It is not known on what basis this has been done.
28) In view of the above both the orders of forum below are setaside. The
Assessing Officer shall decide the matter afresh after considering the
point of view of the appellant and after providing due opportunity of
hearing in the light of the above observations.
KarachiDated. 07.09.2015
deem Azhar Siddiqi)CHAIRMAN
ORDER OF THE TRIBUNAL
Accordingly, we setaside both the Order-in-Original No. 559/2014 dated
27.10.2014 and Order in Appeal No. 108/2015 dated 07.05.2015 as
passed by the Assistant Commissioner and the Commissioner (Appeals)
respectively, in this case and we remand the case to the jurisdiction of
the Assessing Officer to decide the case afresh on merits after affording
the tax payer due opportunity of hearing to plead his case and produce
documents and evidence in support of his arguments. While deciding
the case, the Assessing Officer shall decide the case on merits within 90
days from the date of this order, without being influenced by the
observations made by us hereinabove.
~u£~!~Member Chairman
Karachi.
Dated.07.09.2013
Copies Supplied to:
1) The Appellant through Authorized Representative
2) The Assistant Commissioner SRB for compliance
3) The Deputy Commissioner (Legal) SRB.
Copy for Information
4) The Commissioner Appeals, SRB
5) Guard File
6) Office File