TaxTMI 
TaxTMI 
2017 (7) TMI 726
X X X X Extracts X X X X
X X X X Extracts X X X X
....thin thirty days of the issuance of the show cause notice the appellant also paid penalty of Rs. 1,67,10.332/-, @ 25% of the disputed credit. Ld. Counsel argued that the benefit of Section 73 (1A) and 73 (3) of the Finance Act, 1994 has been denied to them on the ground that the appellant had not admitted their liability on all five different charges but only on this single charge. Ld. Counsel argued that the provisions of Section 73 (1A) do not put any such limitation on the noticees. Ld. Counsel submitted that the doctrine of severability was considered by the Hon'ble Supreme Court in the case of RMD Chamarbaugwalla (AIR) 1957 SC 628. In the said decision it was held that when a statute is in part void, it will be enforced as regards the rest, if it is severable from what is invalid. He also relied on the decision of Hon'ble Apex Court in the case of Gautam Jain - 2017 (345) ELT 586 (SC) and in the case of Universal Cables Ltd. - 1978 (2) ELT (J) 632 MP. He argued that in these circumstances, the benefit of reduce penalty cannot be denied to them. 2.2 The second issue relates to denial of Cenvat Credit of Rs. 3,12,78,763/- taken on the invoices of M/s.CP Systems Pvt. Ltd. Duri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....valid documents for availing credit. He pointed out that Rule 9 (2) of the Cenvat Credit Rules, 2004, in the first proviso prescribes that if other documents do not contain all the particulars to contains the details of service tax payable, description of taxable service, assessable value, service tax registration number of the person issuing the invoices, name and address of the provider of output service and the Deputy or Assistant Commissioner of Central Excise, is satisfied with the services covered by the said documents was received and accounted for in the books of account of the receiver, he may allow credit. Ld. Counsel further pointed out that even the show-cause notice in para 16.2 clearly admits that the appellant had received the input service from M/s.CP System Pvt. Ltd. Ld. Counsel further pointed out that even the IT authorities while disallowing the expenses claimed by the appellant against the invoice for which services were not received have allowed the expenses on these invoices. In these circumstances, the learned Counsel argued that they are entitled to credit, as it is not disputed that they have received the services, they have paid service tax, the service p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....were providing works contract service to JSW Energy, Ratnagiri and filing the Works Contract (Composition Scheme for payment of Service Tax) Rules 2007, the credit on these invoices was denied. Ld. Counsel pointed out that they have filed details of purchase orders placed by them on the suppliers and the said goods were actually not used for the project at JSW Energy, Ratnagiri. Ld. Counsel argued that they have filed details of the purchase orders placed by them on the supplies in support of their claim and the invoices bore the strength of JSW Jaigad and the same were not connected with the JSW Energy. He argued that all these invoices bear the stamps that these inputs were received in the JSW Jaigad site and the same were used only in the Jaigad site. He further argued that all these invoices bear the indication "Ratnagiri - Structure" which indicate that they are for Jaigad port. In these circumstances, he argued that it is apparent that the goods have been received and consumed in their Jaigad site where the benefit of composition under works contract scheme has not been filed. In these circumstances, Cenvat Credit on these invoices cannot be denied. 2.5 The next issue rais....
X X X X Extracts X X X X
X X X X Extracts X X X X
....argeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) willful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "thirty months", the words "five years" had been substituted. Explanation. Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of 5 thirty months or five years, as the case may be. (1A) Where any service tax has been levied or paid or has been short-levied or short paid or erroneously refu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ility under Section (1A). Alternatively, if only part is admitted then the same become liability under Section (1A). Proviso to sub-section (2) talks about payments of service tax in full together with interest and penalty under sub-section (1A). Proviso to sub-section (2) talks about the liability accepted under Section (1A) and if only part liability is admitted under sub-section (1A), so far as the proviso to sub-section (2) is concerned, it become full liability. In these circumstances, we find that the appellants are entitled to the benefit of sub-section (1A) of Section 73 of the Finance Act, in respect of Cenvat Credit wrongly availed on fictitious invoices. Since the appellants have paid the entire amount of Cenvat Credit along with interest and 25% of penalty within one month of the issue of show-cause notice, all proceedings shall be deemed to be concluded in respect of that amount in terms of the proviso to sub section (2) of section 73. On the above ground, the benefit of section 73(1A) read with subsection 73(2) is allowed in so far as it relates to the first issue. Moreover it is seen that they have admitted full liability in so far as the charge of taking credit on t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... number of person providing taxable service ii) The name and address of the person receiving taxable service; iii) Description and value of taxable service provided or agreed to be provided; and iv) The service tax payable thereon. It has been argued that even if the details which have been altered were not present in the invoices the same would have been valid invoices in terms of Rule 4A of the Service Tax Rules, 1994. Consequently the alteration is not material in so far as validity of invoice is concerned. 4.4 These invoices were originally issued by CP Systems Pvt. Ltd. Shri Amar Nayak of CP Systems Pvt. Ltd., in his affidavit stated as under about these invoices: "I say that the correct facts of the matter is that the invoices No.1 to 24 shown to me being submitted by M/s.Sunil Hi Tech Engineers Ltd., Nagpur vide their letter reference No.SHE/NGP/CEX/11-12/838 dated 31/05/2011 are being undoubtedly issued from my company M/s.C.P System Pvt. Ltd.,New Delhi against the work done by us at Barmer site. The aforesaid invoices have been signed by the authorized signatory of our company M/s.C.P. Systems Pvt. Ltd. New Delhi whomsoever was available....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Hi Tech Engineers Ltd. to the department on 31/05/2011. Please confirm the above facts. Please refer to para 9 of your statement, wherein you were asked to compare (Annexure 312) with the invoices submitted by Shri Sachin Jain (1 to 17 Annexure 310 of the SCN) and the invoices submitted by you on 27/07/2011 (18 to 24 Annexure 314). You have stated that since the invoices bearing S.Nos.1 to 13, 15, 17, 21, 22, 23 & 24 as provided by M/s.Sunil Hi Tech Engineers Ltd. are not similar to the ones furnished by Shri Sachin Jain and yourself and hence these 24 invoices submitted by M/s.Sunil Hitech Engineers Ltd (Annexure 312) were not issued by M/s.C.P Systems Pvt. Ltd. Please explain this portion of your statement. Ans. As mentioned in my para 6 of my affidavit dated 28/07/2011 the invoices at Sr.No.1 to 24 furnished by M/s.Sunil Hitech Engineers Ltd. (F.No.SHE/NGP/CEX/11-12/838 dated 31/05/2011) have been issued by M/s.C.P. Systems Pvt. Ltd. at the request of M/s.Sunil Hitech Engineers Ltd., Q.5 Please see invoice Numbers 8, 9, 10, 11, 12, 13, 14, 15, 17, 19, 20, and identify the signature. Ans: Yes. The signatures which are on the above mentioned invoices bearing Nos. 8, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he benefit of said notification was denied solely on the ground that the services provided by the appellant are not works contract service but are erection, commissioning and installation services. Impugned order states that the items included in the value of contract are only consumables, viz., paint, MS grills, welding electrodes, etc. which do not make said contract a 'works contract'. The appellants have submitted the VAT returns for the year 2008-09, 2009-10. A perusal of the said returns shows that the appellants have included the revenue of these project in their VAT tax return as works contract. There is no reason for such inclusion in the VAT return unless such Revenue is considered as works contract. Secondly, in the internal page 70 of the impugned order, the description of the work as described as under: "Light and medium structural steel work: Taking delivery of raw steel material (rolled sections and plates etc.) from the Employer's stores/stock yard, transporting to site including loading and unloading, fabricating, erecting, aligning, leveling and fixing in position at all heights and depth above and below plinth level. Structural steel work including....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntained an endorsement regarding receipt of material at JSW Jaigad site. A perusal of the invoice and commercial invoices confirms this fact. The appellants have relied on the decision of the Tribunal in the case of SGS India Pvt. Ltd. - 2011 (270) ELT 115 and in the case of EEI Industries Ltd. - 2013 (287) ELT 475. It has been argued by the appellant that merely because at different address is mentioned on the invoices, the credit cannot be denied so long as it is established that the goods were received by the appellants at JSW Jaigad site. The Commissioner in the impugned order has held that the claim of the appellant that the goods were received at JSW and not at JSW Energy is not substantiated by the documentary evidence and therefore the credit has been denied. It is apparent that in principal the impugned order agrees that if the goods were indeed supplied to the appellants plant at JSW Jaigad site, the credit would be available. It appears that the documents presented before us were not presented before the original adjudicating authority. Since it is an issue regarding verification of facts, the demand is set aside and the matter remanded to the original adjudicating autho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Owner to Such Bank Guarantee issuing Bank authorizing the reduction of the value of the payment security. We find from the agreement that it true that the security payment is to be reduced in proportion to the amount of advance adjusted in the invoices of the contractors, i.e., appellant. We also find from Para 11.2 (shown below) of the agreement that the advance payment is made on mobilization of site by the appellant. We note that it is the normal procedure in such contracts to provide advance payment which helps the contractors to mobilize men/material to begin the work. Para 11.2 is reproduced below : 11.2 MILE STONE PAYMENTS FOR PROGRESS WORK : Upon mobilization of site by one of the Mechanical Erection Sub-Contractor of the main Contractor, the owner shall pay to the contractor a Mile Stone Payment of Rs. 80.50 lacs (Rupees Eighty Lacs Fifty Thousand only). (Ten percent) of the Contract Price ( Mile Stone Payment ). 11.2.1 Payment of the Mile Stone Payment shall be effected directly within three days from the date of submission of following documents. The agreement also provides for payment of service tax before deducting proportionate a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ltd. Authorised Signatory REGD OFFICE : THERMAX HOUSE, 14 MUMBAI-PUNE ROAD, WAKDEWADI, PUNE 411 003, INDIA This specific Invoice No.RAB 001, dated 20-12-2010 clearly indicates that the advance is deducted in each invoice from the value of invoice, which includes the service tax payable. It all goes to show that service tax is periodically paid on the value of service provided up to a particular stage. If tax were also to be demanded separately on the advance received, it would clearly amount to double taxation. The Commissioner has come to a hasty conclusion without examining in right perspective the details of the agreement/contract, the method of invoicing, the method of paying service tax on the total invoice value, and the adjustment of advance from the total invoice value as we have shown above. In fact it has been rightly contended by the appellant that they have paid the tax in advance, that is at the time of issue of invoices on accrual basis whereas tax was to be paid on receipt of payment basis as per law existing during the relevant period. 8. Further, the account books of the appellant indicate that the advance received is shown as current liabi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e contract. Reliance is placed on the case of Pharpur Cooling Towers Ltd. - 2015 (37) S.T.R. 550 (Tri.-Del.) held that - 3. As regard demand of Rs. 18,54,468/- confirmed on the advance received by the appellant, we find that the show cause notice itself concedes that Service Tax on the advance was paid (adjusted) subsequently and the appellants are also not contesting the said demand. As regards the interest of Rs. 2,76,359/- ordered to be recovered by the impugned order on delayed payment of service relating to the advance received, it is to be noted that during the relevant period the rate of tax applicable was rate of tax prevailing on the date of providing the service. Therefore, before the service was provided the appellants would have been in no position to know as to at what rate to pay the Service Tax. The Service Tax was paid as and when the service relating to advance received was rendered. In this view of the matter, it is not possible to sustain the order relating to recovery of impugned interest. It was only on 18-5-2012 that Section 67A was introduced which provided that the rate of Service Tax, value of taxable service and the rate of exchange, if any, shall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on account of poor workmanship (or) materials brought by him and used and notified within the defects liability period of 12 months from the date of completion of the works. Hence, the word "maintenance period" appearing anywhere in the tender shall stand substituted by the word "Defects Liability period". It is seen that the appellants have not produced any documents to establish the facts in their case are identical to the facts in the case laws cited by them. In the case of Thermax Instrumentation Ltd (supra) the benefit was given on the grounds that the amount obtained by them was in the nature of security deposit just to honor the terms of the contract. From the terms examined in the instant case no such facts emerge. In view of above no reliance can be placed on the decision in the case of Thermax Instrumentation Ltd (supra). 4.7.2 The appellant have however claimed the benefit of section 73(1A) read with subsection 73(2) as they had paid the amount of service tax demanded along with interest and 25% of the penalty within the prescribed period. In view of the findings in the para 4.2 above it is held that the benefit of section 73(1A) read with subsection 73(2) cannot b....