TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 259
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....ator Service', 'Maintenance or Repair Service', 'Survey and Exploration of Mineral', 'Transport of Passengers by Air.' On the basis of investigations conducted, a Demand-cum-Show Cause Notice No. 365/AE/Group-2/2013-14 dated 24.10.2013 for Rs. 7,11,46,287/- was issued by the Commissioner of Service Tax, New Delhi for the period FY 2008-09 to 2011-12 involving the extended period of limitation. Further two Demand-cum-Show Cause Notices dated 20.05.2014 of Rs. 2,60,26,090/- for the period from 01.04.2012 to 31.03.2013 and No. 07/ST/Div-Vi/2014-15 dated 29.05.2015 for Rs. 1,30,89,760/- for 2013-14 were issued by the Commissioner of Service Tax, New Delhi. In all these show cause notices, it was proposed to re-classify the services rendered by the appellant under the category of "Supply of Tangible Goods for Use" as defined under Section 65(105)(zzzj) of the Finance Act, 1994, instead of "Transport of Passenger by Air'. The notices also proposed to recover interest on the service tax demanded and to impose penalties under the provisions of the Finance Act, 1994.A total amount of Rs. 2,49,68,379/- already deposited by the appellant was proposed to be appropriated. 3. It was alleged tha....
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....e appellant are classifiable under the category of "supply of tangible goods for use service" ("SOTG"), taxable w.e.f. 16-5-2008, & not under 'Transport of passengers by Air Service'. 3.3 Sh. A.S. Hasija, Consultant, appeared on behalf of the appellant and Sh Sanjay Jain, DR, appeared for the Revenue. At the outset Sh Hasija accepted the majority judgment of the Larger Bench of the CESTAT, in the case of Global Vectra Helicopter Ltd Vs Commissioner of S.T Mumbai-II-2016(42) STR 118 (Tri-Mumbai) and did not contest the issue of classification of the service provided by the appellant under the category of "supply of tangible goods for use service" ("SOTG"), taxable w.e.f. 16-5-2008. He contested the demand and penalties imposed on the following grounds:- 3.4 That the Learned Commissioner has confirmed the demand of service tax on the services provided in 'Jammu & Kashmir' whereas service tax is not leviable on the services provided in 'Jammu & Kashmir' under the purview of the Finance Act, 1994. Service tax liability with regard to the same could not be confirmed. The services provided by the appellant originated and terminated in J&K. These services are not taxable under Section 6....
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....013 and 15 October 2013. Copy of CENVAT Credit Register was annexed with the reply to the Show Cause Notice dated 24.10.2013 and is placed & annexed in Vol.2. of Appeal paper-book. 3.8 That the CENVAT Credit Rules, 2004 do not impose any restriction regarding as to the time limit during which CENVAT credit availed at a particular point of time, could be utilized by manufacturer or provider of output service, towards the payment of output duty/tax liability, as the case may be. The only limitation provided in terms of proviso to Rule 4(7) of CENVAT Credit Rules, 2004 is that "while paying duty of excise or service tax, as the case may be, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month or quarter, as the case may be, for payment of duty or tax relating to that month or the quarter, as the case may be". 3.9 That the liability of Service Tax confirmed against the Appellant in respect of expenses incurred in Foreign Currency is Revenue Neutral. Foreign currency expenditure consists of two parts: * The value of material and parts used for maintenance of aircraft. * A pilot was appointed or employed by the company whose....
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....ax. Thus the extended period of limitation is applicable only if any of the ingredients specified above, exists. Further, in case a periodical return was required to be filed, then the relevant date will be the date on which such return was filed or last date of filing the return. In the present case the demand in respect of SCN dated 24.10.2013 is for the period 01.4.2008 to 31.03.2012. Thus the demand from 01.04.2008 to 23.10.2008 is beyond the scope of the SCN. Further two SCN dated 20.05.2014 and dated 29.05.2015 were issued covering the period up to 31.03.2013 & 31.03.2014 respectively. The extended period of limitation has been invoked for the subsequent periods also, which is contrary to the law. The extended period has been invoked against the Appellant on the basis that they have contravened the provisions of the Act by willfully suppressing the fact of wrongful availment of CENVAT credit and consequent short payment of service tax and that the Appellant did not submit the information when called for. The Allegations are contrary to the facts of the case on record. The appellant has been contesting right from the beginning the issue of classification of the service provid....
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.....3 That the details given in respect of payment made in Foreign Currency for Maintenance and repair of helicopters do not show bifurcation of value of spare parts and service components, Therefore, the total value is chargeable to Service Tax under Reverse Charge Mechanism (RCM) as confirmed in the impugned order. 4.4 That penalties have correctly been imposed. 5. We have carefully considered the submissions made by both the sides. We have also perused the case records. 5.1. Since the appellant in view of the majority judgment of the Larger Bench judgment of the CESTAT in the case of Global Vectra Helicopter Ltd Vs Commissioner of S.T Mumbai-II-2016(42) STR 118 (Tri-Mumbai), did not contest the issue of re-classification of the service provided by the appellant under the category of "supply of tangible goods for use service" ("SOTG"), taxable w.e.f. 16-5-2008, we refrain from deciding the issue of classification of Service provided by the appellant. 5.2. From the perusal of details available in respect of service claimed to be provided in J&K, it is observed in the impugned order that though the detail was year wise and client wise, it contained invoice numbers, names of indivi....
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....ed that they had incurred expenditure on 'repair and maintenance', 'salary', 'air ticket expenses reimbursement', 'professional charges', 'purchase of parts', 'fees of parts installation', and 'software' etc. The proforma invoice/ Delivery Note-HNB 2008162 dated 04.09.2008 for 24507440 in respect of 'Main Rotor Head Overhauled' and Delivery Note HNF 2009058 dated 14.4.2009 for 6596000 in respect of 'Main Gear Box Overhauled' and permission no. DGCA ref no. 5/1400/200-AI(2) dated 14.12.2007 in respect of Major Maintenance of LAMA SA 315B for 215502271 buttress the fact that the Noticee incurred the said expenses in Foreign Currency on account of maintenance and repair of their helicopter'. But the Learned Commissioner has not tried to determine the value of parts used in the said service of 'maintenance and repair' and as per law the value of parts and spares used cannot be charged to Service Tax for the said service. The appellant was directed to submit year wise details of value of service provided in J&K, the value of parts and spares used, service component, salary etc on the next hearing. 5.5. Next hearing was held on 18.10.2018 and the appellant submitted the required year....
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....stainable under the law and is set aside. 5.7. As discussed above, the Learned Commissioner has admitted in para 41 of the impugned order that the appellant claimed that Service Tax is not chargeable on the value of parts and spares used in providing the service under 'Maintenance and Repair service' and in para 80 of the impugned order has admitted that Service Tax is not chargeable on the value of parts and spares used in the said service, but has not ascertained the value of parts and spares used and instead confirmed the demand on total value of service including parts, pertaining to Maintenance and Repair Service. The appellant had submitted all the details and the documents in support of their claim. The appellant has provided as above, the total value of parts and spares used for maintenance and repairs was Rs. 10,37,49,243/- This amount is not chargeable to Service Tax and the demand of Rs. 1,12,46,921/- in respect of value of parts and spares is not sustainable under the law and therefore is set aside. The appellant has paid Service tax of Rs. 31,45,915.01 under Reverse Charge Mechanism, in respect of service of pilot hiring and service component under Maintenance and Rep....
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....service provided by the appellant. The learned Commissioner could have ascertained the details from the copy of the RG-23 Register submitted by the appellant. As per Rule 4(7) of CENVAT Credit Rules, 2004, CENVAT Credit of service tax paid can be taken at any point of time on or after the date of payment of service value and tax thereon. Rule 4(7) as existed prior to 01.04.2011 provides as follows: "The CENVAT Credit in respect of input service shall be allowed on or after the day on which payment is made of the value of input service and the service tax paid or payable, as is indicated in the invoice, bill or as the case may be, challan referred in the Rule 9 of the CENVAT Credit Rules,2004." On the reading of the same, it is clear that CENVAT credit for the input services availed can be utilized for the payment of Service tax liability on or after the date on which payment for input services has been made by the assessee. Therefore we hold that the CENVAT Credit of Rs Rs. 4,01,847/- is admissible to the appellant. 5.11. The appellant has contested that Extended Period of Limitation is not invokable in the present matter, because the appellant has not suppressed any information....
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....ble Goods service' or 'Transport of Passengers by Air Service'. There is no allegation in the impugned order that the appellant did not cooperate with the investigation undertaken by the Department. The Appellant has duly complied with all the requisitions of the Department and has duly submitted all documents/ information as and when demanded by the Department. The Appellant through various letters and correspondences was in communication with the department and all the documents were submitted to the department. No case has been made out against the appellant that the appellant has suppressed any facts or fraud committed with intention to evade payment of Service Tax.. Thus, the allegation of suppression or fraud with intention to evade payment of Service Tax cannot be sustained. In the case of Commissioner of Central Excise, Chennai Vs Chennai Petroleum Corporation Ltd.-2007 (211) ELT 193 SC, the Apex Court has held that where the department was aware of the activities of the assessee, the extended period of limitation could not be invoked on the basis of the bold allegation of suppression on the part of the assessee. In Anand Nishikawa Co. Ltd. Vs Commissioner of Central Exc....