TaxTMI 
TaxTMI 
2018 (8) TMI 176
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.... of such tax from service recipient and it was unaware of changes made in the service tax club regarding payment of service tax slabs accrual basis after introduction of Point of Taxation Rules, 2011 with effect from 01.04.2011. It therefore continued to pay service tax after receipt of consideration value of service as contemplated under Section 68 read with Rule 6 of Service Tax Rules, 1994. During audit conducted for the period from financial year 2011 to 2014 objection was raised that appellant had not paid service tax in terms of Rule 3 of Point of Taxation Rules, 2011 and accordingly a tax demand of Rs. 17,79,239/- was made. Appellant recalculated the same and found actual tax liability came to Rs. 15,16,841/- and paid the same along with interest of Rs. 1,95,081/- vide challan dated 04.06.2014. Subsequently show-cause notice dated 15.04.2016 was issued and on receipt of its reply, first adjudicating authority i.e. Asst. Commissioner of Service tax, Div-V, Ratnagiri confirmed the demand of service tax of Rs. 15,62,686/- along with interest, penalty of Rs. 10,000/- under Section 77(2) and penalty of 15% of duty demand under Section 78(1)(i) of Finance Act, 1994 by justifying t....
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....as per the Indian Evidence Act, the same is not required to be established by way of additional proof. Pointing to the observation made by the first adjudicating authority and the appellate authority regarding suppression of fact the ld. AR submitted that the adjudicating authority was not empowered under the statute to impose penalty of 15% for which the Commissioner (Appeals) had rightly allowed the appeal preferred by the department and increased the penalty to 50% since such 15% penalty was permitted by the statute to have been voluntarily paid by the defaulter and cannot be imposed in an adjudication process. 5. Heard both sides at length and gone through the case record including the orders passed by the adjudicating authority and first appellate authority as well as provision of law involved in the case. Admittedly, appellant company had expressed its ignorance about change of procedure concerning Point of Taxation Rules, with effect from 01.04.2011 and made delayed payment of service tax upon its receipt and not on the basis of dates on which invoices were raised by it. But it pleads that because of long practice prevailing since introduction of service tax, it was just ....
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....use "nothing contained in sub-rule 3 shall apply" to a case where service tax has not been levied or paid or short levied or short paid or erroneously refunded by reason of those five grounds mentioned above under proviso to subrule (1) of Rule 73. 7. Be that as it may it is now to be seen as to how this practice of fraud, collusion, submission of "wilful" misstatement or suppression of fact vis-a-vis contravention of provisions of this chapter and rules made thereunder "with intend to evade tax payment" is to be established and on whom the burden lies. In an adversarial judicial system and as per rule of evidence, burden lies on the person who asserts in the affirmative. Therefore, it is up to the respondent department to establish that the appellant had practised any kind of act contemplated under sub-rue (4) so that penalty can be imposed on it. Going by the adjudication order and also the order passed by the Commissioner (Appeals), it cannot be said to have been established by the department that such practice of fraud collusion etc., were established before those authorities. Rather what is found from the order-in-original is that the first adjudicating authority has narrat....
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....d by the R/Supdt. Considering the correct payment made by LEPL in respect of Sr. No 11 which is in excess of amount demanded at the said entry by Rs. 45,845/-, I find that LEPL have correctly paid the service tax of Rs. 15,62,686/- (which is equal to corrected amount of demand of Rs. 15,16,841/- plus correct amount of service tax paid by LEPL for Sr. no 11 of annexure which is in excess by Rs. 45,845/- of demanded amount)." 10. Therefore, it cannot be said that delayed payment of tax liability by a month or so by the appellant was purposeful and deliberate as it had all along practising the procedure existing before introduction of such Point of Taxation Rules, 2011 with effect from 01.04.2011, since it is apparent from record that it acted on an honest principle found upon reasonable ground of a state of circumstances. In the order of the Commissioner (Appeals) also not a single reference is made to establish that such act of the appellant in delayed payment of tax upon its realisation was made with any ulterior motive to evade tax. It would also be desirable and befitting to reproduce a relevant portion of the judgment pronounced by the Hon'ble Apex Court in the case of Un....