TaxTMI 
TaxTMI 
2018 (4) TMI 662
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....as 'SA (ST) 122/2017'. 2. Facts of the case in brief are that M/S. Rajasthan Crane Services (hereinafter referred to as RCS or as the assessee), a proprietary concern, situated at C-13 Nansi Munsi Quary, near Ansa Indl. Estate, D Bldg. Sakinaka, Andheri (East), Mumbai, are registered with Service Tax and holding Service Tax Registration Number AESPB7440KST001, dated 12-6-2008 for rendering taxable services under 'Supply of Tangible Goods' falling under the category of taxable services as provided under Section 65(105) (zzzzj) of the Finance Act, 1994 (hereinafter referred to as FA, 1994 or the said Act.) 2.1 On the basis of intelligence, enquiry was initiated against RCS for evasion of Service Tax, by visiting their registered premises under authorization on 20-12-2011 RCS were asked to furnish information along with copies of relevant documents to ascertain payment of Service Tax made by them. During course of investigation, based on the documents submitted by the assessee, was observed that: • RCS were engaged in the business of providing on hire of Hydra Cranes to be used in the construction activities. Their major clients were M/S. L&T, M/S. H....
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....nting to Rs. 1,88,23,722/- for the Financial Year from 2008-09 to 2012-13 (as detailed in Para 4 of show cause notice), out of which an amount of Rs. 1,03,88,821/- was paid by the assessee or recovered from the assessee, during the course of investigation. They have wilfully suppressed the material facts of providing taxable services i.e. Supply of Tangible Goods to the Department as They never intimated the department either by filling ST-3 returns or otherwise, which was only revealed after the visit of anti evasion team to their registered premises and after investigation. They failed to submit the detail as called for in various letters as mentioned investigation. in Para They 3 failed of SCN. to submit This act the of details the assessee further deliberate suppression of material facts and contraventions of various law, with mala fide intention to evade payment of Service Tax. 2.6 The assessee wilfully suppressed the material facts of providing taxable service receiving consideration for the taxable service provided including service tax and contravened various provisions of law with intention to evade payment of Service Tax and consequently the assessee for their act of c....
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.... 2009. However, returns in form ST-3 were not filed at the relevant time, even though the entire amount of service tax due has been paid by the plicant in 2013 itself. While much of the dues has been paid even before the vestigations started, the balance amount along with an additional amount Rs. 15,00,381/- towards interest has been deposited. The service tax returns the period from 2009 onwards have been filed on 20-10-2013. Even this was before the show cause notice was served on the applicant. However an error been committed in calculating the total amount of tax paid through cash and through Cenvat credit. However the same is verifiable from the records and duty liability is discharged accordingly. 3.2 The applicant obtained registration with the Service Tax Department under the category of "Supply of Tangible Goods" Service from 2008. Sire the value of services exceeded beyond the exemption limit of 10 lakhs the applicant was required to pay the Service Tax and accordingly the applicant started paying Service Tax. Since the applicants are liable to pay Service Tax, the applicant are also eligible to take credit of Service Tax paid on the input services, central excise duty....
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....to consideration the fact that the applicant has remitted the Service Tax and interest due from them and has also filed the ST-3 returns, and further the applicant has also cooperated with the department during investigations and therefore there can be no allegations of suppression or fraud and definitely not with the intention of evading payment of Service Tax, in a scenario where the amount already stands paid. 4. The application filed by the applicant has been allowed to be proceeded with under Section 32E (1) of the Central Excise Act, 1944 vide orders dated 7-4-2017 of Hon'ble Bench on file. 5. Revenue has not filed the statutory report till date. 6. Hearing in this case was held on 19-5-2017. Shri Arjun Radhakrishnan Nair, Advocate, appeared on behalf of the applicant. No one appeared on behalf of Revenue despite notice. 6.1 Ld. Advocate submitted that the applicant was engaged in business of providing Hydraulic Cranes on hire basis for the purpose of construction activities to their clients. Applicant is providing services under the category of 11Supply of Tangible Goods" and that they have admitted and paid their Service Tax liability of Rs. 1,88,23,722/-(Se....
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....ces rendered, for the period from 2008-09 to 2012-13. (C) The Service Tax liability was worked out to Rs. 1,88,23,722/- for period from 2008-09 to 2012-13. They had suppressed the above stated facts with clear mala fide intention to evade payment of Service Tax. Therefore, proviso to Section 73(1) of the Finance Act, 1994 was rightly invocable in their case. In view of the above a show cause notice No. F. No. V/ST11/HQ/AE/Enq/Gr-09/22/2011, dated 19-10-2013 was issued them to demand Service Tax liability amounting to 1,88,23,722/- (including Service Tax, Secondary and Higher Education Cess), along with applicable interest and to impose penalties under Sections 76, 77 and 78 of the Finance Act, 1994. (d) As the assessee has now filed application, the detailed verification of the payments was undertaken and it is observed as under: - As no returns for the period 2008-09 submitted/nor available system/ filed, the same cannot be verified. However, as stated in the show cause notice itself, there is no liability/ Service Tax payable for the year 2008-09. The assessee in their application to settlement commission has stated that out of the liability of Rs. 1,88....
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....s and thus they have clearly failed to declare the appropriate value of taxable services to the department in any manner. So, in the instant case, suppression of vital facts and contravention of statutory provisions of the Finance Act, 1994 by the assessee with mala fide intention is quite evident. The SCN dated 19-10-2013 proposed to impose penalty under Section 76, Section 77 and Section 78 of the Finance Act, 1994. 7.1 The Revenue report dated 19-6-2017 was sent to applicant for filing reply. The applicant vide their letter dated 30-6-2017 have made the submissions: (i) All the documents more specifically, the challans under which the Service Tax amount due to be paid by our clients has been paid as well as the copies of invoices based on which our clients are eligible for Cenvat credit were available on the records of the Hon'ble Settlement Commission having been made part of the application filed before the Settlement Commission- Since all such documents are available in the said application, our clients vide letter dated 19-52017 submitted a separate copy of the said record to the jurisdictional Service Tax officers. (ii) In their letter dated 9-8-201....
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....Rule 6 of the Finance Act, 1994 (payment of Service Tax before 5th of the month ending the particular quarter) has been ascertained to be Rs. 1,88,23,722/-. The show cause notice is issued for failure to discharge the Service Tax liability and the amount paid by our clients is proposed to be appropriated. However, the amount shown to be paid by our clients before and during the investigations is shown to Rs. 1,03,88,821/-. The entire show cause notice nowhere contains any allegation that our clients are not eligible for the Cenvat credit even though verification of all the documents and records was carried out. The invoices enclosed in the application as well as submitted to the Assistant Commissioner of Service Tax vide letter dated 19-5-2017 will show the amount of credit available to our clients on the basis of such invoices, the credit is available to our clients in the form of inputs as well as capital goods. In the year 2008-09 no credit is available nor has been claimed by our clients. For the year 2009-10 the invoices submitted will show that an amount of Rs. 34, 800/- is available as credit in relation to the inputs and an amount of Rs. 4,24,080/- is available as credit in....
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....after the interest has been correctly calculated at 18%. Even though the heading in the column shows as 13% the actual calculation will show that the interest has been calculated at 18% with regard to the interest liability for the amount paid on 21st December, 2011, 28^th December, 2011 and one payment made on 31^st July, 2012, since there is an error committed, our clients have calculated the differential amount of interest and the same is paid vide challan No. 50521, dated 30-06-2017. (viii) in view of the above, our clients most humbly submit and pray that case may be settled as prayed for in the application. 8. bench has considered the impugned application relevant case records, and submission made during hearing. 8.1 in this case applicant has rendered services of "supply of tangible goods" as provided under section 65 (105) zzzz) of Finance Act, 1994. On the basis of intelligence, the enquiry initiated against the applicant revealed that they were providing on hire the hydraulic to be used in construction activities and their major clients were M/s. L&T, M/s. HCC, M/S. Michigen Engineering, M/s. patel engineering, M/s. reliance industries etc. They were raisin....
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....oses the said amount to be appropriated. So there is no reason for not accepting said payment of Service Tax in cash vide various challans. Further, Revenue has not pointed out in their report dated 19-6-2017, any discrepancy in payment in any specific challan. Therefore, Bench do not find any infirmity in proposal made in the SCN to appropriate the amount of Rs. 1,03,88,821/- paid by the applicant towards their Service tax liability. 8.5 In the records of proceedings dated 19-5-2017 applicant was specifically directed by the Bench to submit all the related documents of Service Tax payment on the basis of which Cenvat credit is claimed and relevant records regarding availment and debit of the said Cenvat credit, to the jurisdictional Revenue authorities for verification within 3 days. The applicant failed to submit said records despite two letters issued by Revenue. It was obligatory on the part of the applicant to submit the said original records within 3 days of hearing date which they failed to comply. The applicant has in their letter dated 30-6-2017 made an excuse that all the copies of invoices and challans were already submitted along with settlement application. Applican....