TaxTMI 
TaxTMI 
2018 (4) TMI 1184
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....r the central excise department since 2003 and under service tax since 2008 and was filing returns regularly. The appellant also incorporated a subsidiary HPCL Mittal Pipeline Ltd. in January, 2008 to set up the pipeline for transporting crude oil to the refinery. The appellant availed extra commercial borrowing through State Bank of India, London and imported various technical engineering services through overseas service providers in the year 2007-08 to 2009-10 for which the payments were made in foreign exchange. The appellants also incurred various expenses for its subsidiary during the period 2007-08 to 2009-10 which were required by the subsidiary during laying of pipelines, etc. and claimed reimbursement of the same without any mark up. An audit was conducted during 15.09.2010 to 21.09.2010 for the period 2006-07 to 2009-10 and on the basis of the scrutiny of the balance sheet for the period 2007-08 and 2009-10, the appellant was asked to make payment of service tax on the imported services under reverse charge mechanism on the expenses reimbursed from the subsidiary and further to reverse the credit taken by the appellant in certain cases. The appellant reversed the credit ....
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....ther, it was bonafide interpretative issue where taxability itself was in doubt. Therefore, the entire exercise is revenue neutral as service tax deposited was availed and there was no reasonable cause for non- payment of service tax during the relevant time. The service tax with interest has been paid promptly on being pointed without any protest before issuance of show cause notice. Therefore, in the absence of suppression in the show cause notice ought not to have issued under section 73(3) or absent suppression the provisions of section 73(4) are not applicable. Similarly section 73(1A) was also not applicable. He submits that the benefit of section 80 of the Act be granted to the appellant. To support his contention, he relied on the following decisions: (1) Pushpam Pharmaceuticals -1995 (78) ELT 401 (SC) (2) Chemphar Drugs & Liniments-1989 (40) ELT 276 (SC) (3) Uniworth Textiles Ltd.-2013 (288) ELT 161 (SC) (4) Calderys India Refractories Ltd.-2014 (36) STR 102 (T) (5) Essar Steel Ltd.-2009 (13) ELT 579 (T) (6) Endeka Ceramics India Pvt.Ltd.-2013-TIOL-497-CESTAT-AHM (7) Tejas Agency-2013-TIOL-1596-CESTAT-AHM (8) Matrix Telcom Pvt.Ltd.-2013 (32) STR 423 (T) (....
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....e service shall be evaluated under the provisions of 67. Clause (i) of sub-section (1) of Section 67 provides that the value of the taxable service shall be the gross amount charged by the service provider "for such service". Reading Section 66 and Section 67(1) (i) together and harmoniously, it seems clear to us that in the valuation of the taxable service, nothing more and nothing less than the consideration paid as quid pro quo for the service can be brought to charge. Sub-section (4) of Section 67 which enables the determination of the value of the taxable service "in such manner as may be prescribed" is expressly made subject to the provisions of sub-section (1). The thread which runs through Sections 66, 67 and Section 94, which empowers the Central Government to make rules for carrying out the provisions of Chapter V of the Act is manifest, in the sense that only the service actually provided by the service provider can be valued and assessed to service tax. We are, therefore, undoubtedly of the opinion that Rule 5(1) of the Rules runs counter and is repuqnant to Sections 66 and 67 of the Act and to that extent it is u7tra vines, It purports to tax not what is due from the s....
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.... in the case of Mothersons (supra), the Hon'ble High Court have decided the issue against the Tribunal wherein the Tribunal has held that if the duty has been paid before issuance of show cause notice. In that circumstance, the issue before the Hon'ble High Court was whether the penalty can be imposed under section 112 of the Act when the duty has been paid before issuance of show cause notice. In that case, the Hon'ble High Court has relied on the decision of the Apex Court in the case of Rajasthan Spinning Mills held that the payment of duty before issuance of show cause notice does not absolve the liability of penalty but have not given any finding on suppression in the said case. Therefore, the case law relied on the by the learned AR do not throw the light on the issue in the case in hand. In this case, from the facts it is to be ascertained whether there was any intention to evade payment of service tax by the appellant or not. As it is admitted position that in this case the service tax is to be paid under reverse charge mechanism, this is a situation of revenue neutrality. For the reimbursement of expenses recovered from the subsidiary, service tax is not ....
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....3,250/- in respect of services received during the period 16-5-2007 to 28-2-2008, Further, the appellant were asked vide letters dated 19-6-2008 and 17-7-2008 to furnish details regarding the services received, value thereof and status of Service Tax liability thereupon and relevant documents viz. invoices, etc. The appellants in response to the letters issued to them, submitted reply vide their letters dated 24-6-2008, 16-7-2008, 28-7-2008 and 4-9-2008. From the details and documents furnished by the appellant, it appeared that they had not paid the amount of Service Tax amounting to Rs. 21, 76,361 leviable on the engineering consultancy services received by them during the period 2007-08 and 2008-09 (upto 31-7-2008). The appellant paid the Service Tax amounting to Rs. 21/76,361/-vide challan dated 10-5-2008 of challan No, 6 dated 26-7-2008 of Rs. 1/37/359/- & cha//an No. 8 dated 25-8-2008 of Wherein this Tribunal has observed as under: 6. Obviously show cause notice has been issued invoking suppression of facts and therefore we have to see whether in the facts and circumstances of this case suppression of fact or misdeclaration could be alleged. Obvious/y the Assistant Commis....
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.... which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. 12.Further to impose penalty, there should be deliberate positive act. The same has been discussed by the Apex Court in the case of Champhar Drugs & Liniments (supra) wherein the Apex court has observed as under: 8. Aggrieved thereby, the revenue has come up in appeal to this Court. In our opinion, the order of the Tribunal must be sustained. In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made there....