TaxTMI 
TaxTMI 
2019 (8) TMI 210
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....fication No.46/2011-ST dated 19/09/2011. 3. As the entire dispute revolves around the applicability of Notification No.18/2002-ST as amended vide Notification No.46/2011, we deem it fit to reproduce the said two Notifications:- Notification No.18/2002-ST dated 16/12/2002 "In exercise of the powers conferred by Sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby, exempts the taxable services provided by a consulting engineer to a client on transfer of technology from so much of the service tax leviable thereon under Section 66 of the said Act, as is equivalent to the amount of cess paid on the said transfer of technology under the provisions of the Section 3 of the Research and Development Cess Act, 1986 (32 of 1986)". Amending Notification No.46/2011-ST dated 19/09/2011 "In the said notification, for the words, figures and brackets "amount of cess paid on the said transfer of technology under the provisions of the Section 3 of the Research and Development Cess Act, 1986 (32 of 1986)", the following words, figures and brackets shall be subs....
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....ands culminated into impugned order passed by the Commissioner vide which he confirmed the demand alongwith interest, as proposed in the notice and also imposed penalty to the extent of 100% of service tax in terms of the provisions of Section 78 of the Finance Act, 1994. 6. We have heard Shri Vivek Sharma learned advocate appearing for the appellant and Shri Shiv Pratap Singh learned A.R. appearing for the Revenue. 7. The short question required to be decided in the present appeal as to whether the availment of exemption by the appellant in terms of the Notification No.46/2011-ST dated 19/09/2011 is appropriate or not. The appellants have not disputed the factual position that Research & Development Cess was not paid at the time of payment of service tax and was deposited by them subsequently. The language of the Notification is unambiguous and clear that the R & D Cess has to be paid first and then the exemption equivalent to the amount of such Cess PAID would be available to the recipient. The Notification language is unambiguous and there is no room for any intendment. As rightly observed by Commissioner, the Hon'ble Supreme Court in the case of Commissioner of Sales Tax,....
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....at the service tax is not merely exempted to the extent of R & D Cess payable but said exemption would be available only if R & D Cess is PAID before the payment of the service tax. The expression used in the conditions was introduced as paid and not payable, thus leading to the inevitable conclusion that R & D Cess is required to be paid before payment of service tax. 9. The appellants have also contended that the payment of R & D Cess is only a procedural and administrative condition, which should be diluted and condoned. However, we do not find ourselves in agreement with the above stands of the appellant. If such conditions have to be taken as procedural conditions, the entire legislative exercise of introduction of the said two conditions becomes otiose and a futile exercise on the part of the Legislative. If the said two conditions are considered to be procedural, nothing remains in the Notification so as to extend the benefit of exemption to the service tax to the tune of R & D Cess paid by the importer. It is well settled law that any interpretation which renders the Notification as futile piece of Legislation has to be avoided. Inasmuch as the condition of payment of R ....
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....ity has invoked extended period of limitation by observing that the appellant never disclosed at any point of time that they have adjusted R & D Cess before discharging payment of the service tax. This is not a case of any bona fide interpretation inasmuch as the wordings of the Notifications are very clear and required the recipient to pay R & D Cess before payment of service tax so as to avail exemption. The appellants have not given any justifiable reasons for not paying R & D Cess in time and for availing exemption without such payment of R & D Cess. As such, we agree with the Adjudicating Authority in respect of the invocation of longer period of limitation. 12. In respect of penalty, the Adjudicating Authority referred to the case law as follows:- • In Corpus Juris Secundum, vol.85, at p.580, para 1023, it is stated thus:- "A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws." • R.S. Joshi v. Ajit Mills Ltd. (SCC p. 110, para 19) "Even here we may....