TaxTMI 
TaxTMI 
2018 (2) TMI 1250
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....vat Credit Rules, 2004. The SCN also demands late fee of Rs. 1,33,900/- under Section 70 read with Rule 7C of Service Tax Rules, 1994. Brief Facts : 1.2 Briefly stated the facts of the case are as under : • The applicant holder of Service Tax Registration No.AACCP5961AST001 are engaged in providing services falling under the category of 'Development and Supply of Content Services' classifiable under Section 65(105)(zzzzb)/65(36c) of the Finance Act, 1994. • Based on intelligence gathered by the jurisdictional officers that though the applicant were rendering taxable services during 201011 to 2014-15, they had not paid any service tax and not filed ST-3 returns from 10/2013, inquiry into the matter was initiated. Search of the premises conducted on 28-5-2015 and certain documents recovered- Statements dated 1-6-2015 and 8-6-2015 were also recorded from Shri b. Tirupal Reddy, Chief Financial Officer of the applicant-company. • From the scrutiny/verification of documents and statement of Shri B. Tirupal Reddy, CFO of the applicant-company, it was revealed that : A. Short payment of service tax for the period 2011-12 to 2014-15 : ....
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....services availed by them as receiver of service. The service tax liability under reverse charge mechanism worked out to Rs. 24,15,945/- for the period 1-42014 to 31-3-2015 and the same was liable to be paid by the applicant. D. Non-fulfilment of obligation under Rule 6(3) of Cenvat Credit Rules. 2004 : • The applicant is engaged in trading of airtime of various telecom companies and the same is reflected in their Financial Statements as exempted turnover. As trading is an exempted service, the Cenvat credit on input services attributable to the exempted service was not available to the applicant in terms of Rule 6(3) of Cenvat Credit Rules, 2004. From the ST-3 returns filed for the period 10/2013-3/2014 and 4/2014-9/2014 as well as data furnished by the applicant for the period upto 3/2015, it was seen that the applicant had availed Cenvat credit on input services without fulfilling the obligation under Rule 6(3) of CCR, 2004. • As per Rule 6(3)(i) of CCR, 2004, the applicant has to pay an amount equal to six per cent of "value" of the exempted goods. The "Value" in case of trading for this purpose shall be the difference between the sale price and cost....
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.... jurisdictional Commissioner of Service Tax, Hyderabad. The show cause notice proposed to : (i) Demand Service Tax of Rs. 1,67,02,830/- for rendering taxable services of "Development and Supply of Content Services" for the period 1-4-2011 to 31-3-2015 under proviso to Section 73(1) of the Finance Act, 1994; (ii) Recover an amount of Rs. 25,17,977/- under being wrong Cenvat credit availed on ineligible input services under Rule 14 of Cenvat Credit Rules, 2004; (iii) Demand an amount of Rs. 24,15,945/- under Notification No.30/2012, dated 20-6-2012 read with Section 68(2) of the Finance Act, 1994; (iv) Demand an amount of Rs. 3,63,071/- under Rule 6(3) of Cenvat Credit Rules, 2004. (v) Demand of Service Tax of Rs. 2,56,238/- on commission received from M/s. BSNL for rendering service in State of J&K under proviso to Section 73(1) of the Finance Act, 1994; (vi) Demand of interest under Section 75 of the Finance Act, 1994 on the amounts demanded above; (vii) Appropriate an amount of Rs. 20,21,874/- being the interest paid by the applicant towards the total interest liability; (viii) Impose penalty under Sections 77 and 78 of the Finance Act, 1994 and Rule 15A of....
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....obile Tower. From the write-up submitted on the above service, it could be seen that the applicant was required to keep the special kits in the car which was rented for this purpose and the car had to test drive up to 3000 kms. around the Mobile Tower to verify the strength of the signal. They also enclosed the purchase order dated 28-1-2015 from M/s. Nokia and invoice dated 1-3-2016 along with equipment purchased tax invoice dated 8-10-2015 from M/s. ASCOM, it would be clear that the rent-a-cab service was used for the main business and not for transporting any staff etc. Hence, the applicant were eligible for the credit taken in respect of the rent-a-cab service and therefore they admitted an amount of Rs. 1,02,032/- and not admitting the balance demand of Rs. 24,15,675/-. • In respect of the demand of Rs. 24,15,945/-, the applicant submitted that Rs. 7,44,980/- pertained to Private Limited Company viz., M/s. B&S Utilities Solutions Pvt. Ltd. and M/s. Maa Shakumbhari Travels Pvt. Ltd. and hence not covered under RCM. Sample copies of said companies were enclosed in support of their claim. In respect of the balance demand of Rs. 16,70,965/-, they submitted that they h....
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....1,61,905/- for the period from 2011-12 to 2013-14 as they had taken credit based on proper documents; though the applicant had submitted list of input service invoices, no evidence with regard to maintenance of proper records for the receipt and consumption of services to discharge the burden of proof regarding admissibility of Cenvat credit as required under Rule 9(6) of Cenvat Credit Rules, 2004 was provided by the applicant; that the applicant also did not show the credit taken particulars in the ST-3 returns filed during 2011-12 to 2013-14 as required under Rule 9(9) of the CCR, 2004. Hence the claim of the applicant with regard to eligibility of Cenvat credit of Rs. 1,31,61,905/- was not tenable in view of the provisions of Rule 9(6) and 9(9) of CCR, 2004. In the absence of the credit particulars being indicated in the periodical return, the Cenvat credit cannot be allowed to the applicant. • With regard to recovery proposal of input service credit of Rs. 25,17,977/-, the applicant have admitted an amount of Rs. 1,02,032/- being input service credit taken on hospitality services. Applicant have argued that they were eligible for input service credit of Rs. 24,15,6....
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....heard on 20-6-2017. Shri S. Ravi, Advocate and Shri S. Sivaganesh, Consultant represented the applicant and no one represented the jurisdictional Commissioner. 4.2 It was submitted by the learned advocate that they are engaged in provision of "Development and Supply of Content Services"; that the impugned show cause notice was issued demanding Service Tax totalling to Rs. 2,22,56,061/- on account of 5 grounds; that they admit their Service Tax liability of Rs. 1,67,02,830/- on account of provision of "Development and Supply of Content Service for the period from 1-4-2011 to 31-3-2015; that similarly they also admit their liability of Rs. 3,63,071/- and Rs. 2,56,238/- demanded in para 22(iv) and para 22(v) of the impugned SCN 4.3 With regard to the demand of Rs. 1,67,02,830/- it was submitted that they have discharged their Service Tax liability fully by payment of Rs. 35,40,925/- in cash and the remaining amount of Rs. 1,31,61,905/- through accumulated Input Service credit; that however, Department is not accepting payment from their input credits on the ground that no evidence was produced with regard to proper records for the receipt and consumption of Services has been mai....
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....4. With regard to ineligible Cenvat credit of Rs. 25,17,977/- on rent-a-cab services, Commissioner has contended that Rule 2(e) of CCR, 2004, unequivocally excluded the benefit of input service credit on rent-a-cab services to the applicant. 4.7 On the issue of demand of Service Tax of Rs. 24,15,945/- on rent-a-cab services under reverse charge basis, Commissioner accepted the contention of the applicant that they are not liable to pay Service Tax under RCM of Rs. 7,44,980/- on rent-a-cab services provided by a private limited company; that however, on the balance demand of Rs. 16,70,965/- the applicant is under obligation to pay tax on reverse charge basis notwithstanding the fact that they reimbursed/paid Service Tax component to their service providers of rent-a-cab services. 4.8 Bench directed the applicant to submit his further submissions on the Commissioner's report, particularly their entitlement with regard to the issue of ineligible Cenvat credit within a week's time with a copy to the jurisdictional Commissioner. Post-Hearing Submissions The Counsel for the applicant vide his letter dated 27-6-2017 made the following submissions : (a) With regard t....
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....M/s. Marvel Vinyls Ltd. v. Commissioner of Central Excise, Indore [2017 (49) S.T.R. 424 (Tri. - Del.)]. In view of the above, the demand of Rs. 24,15,675/- in respect of Rent-a-Cab Services was not acceptable, (c) With regard to demand of Service Tax of Rs. 24,15,945/- pertaining to Service Tax payable under RCM, it was stated that department itself had accepted the applicant's contention regarding cab services provided by private limited company and hence the demand of Rs. 7,44,980/- was not sustainable. In respect of balance demand of Rs. 16,70,965/- relating to cab services provided by proprietorship/partnership firms, it was stated that the applicant had paid the entire Service Tax for the same to the respective service providers. Since the Service Tax amount was discharged, the applicant need not pay the same again. Department's contention that the applicant was under obligation to pay the Service Tax of Rs. 16,70,965/- under reverse charge mechanism notwithstanding the fact the applicant had paid Service Tax to the service providers would amount to double taxation/ double jeopardy. Findings and Decision of the Bench : 6.1 The Bench has gone through the conten....
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....ice recipient to pay Service Tax on rent-a-cab services. 6.3 The Bench finds that the stand of the applicant and the department are at huge variance which require detailed verification of records and documents so as to allow or reject the claims made especially with regard to eligibility of Cenvat credit utilization for payment of Service Tax. Department has contended that the applicant had not maintained proper records for receipt and utilization of input services for provision of output services whereas the applicant in their Settlement Application had stated that credit was taken based on proper documents and have enclosed a statement showing the invoices based on which such input service credit was availed. Similarly with regard to ineligible Cenvat credit on input service and Service Tax payment on 'rent-a-cab' on reverse charge, both applicant and the department are unrelenting and sticking to their own stand. 6.4 The Bench is of the considered view that Settlement Commission is not the forum to decide upon contentious issues, by evaluating the evidences let in by the rival parties to the proceedings. Such an act would tantamount to the Settlement Commission adj....
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....nvestigation for arriving at an adjudication of such facts". In paragraph 9 the following principles were set out : (i) "The Settlement Commission cannot substitute itself for the adjudicating officer by deciding complicated and highly disputed or contentious questions and issues of facts themselves, because the expression "settlement' is used in the Customs Act in contradistinction with 'adjudication' and the very scheme of the Settlement provisions is to settle and not adjudicate". 6.7 Similarly in the case of Vinay Wire Poly Product Pvt. Ltd., reported in 2014 (307) E.L.T 438 (All), the Hon'ble Allahabad High Court has held as follows : 26 "The Settlement Commission has given good and cogent reasons for sending the case back to the adjudicating authority. The Settlement Commission noticed that the applicants had not accepted a substantial part of the duty liability and had in fact contested the evidence collected by the Revenue as being fabricated and tampered with. It also noticed that the Revenue had given reasons to substantiate its position regarding the investigation as well as the quantification of duty liability. In such a situation, the Settlemen....