TaxTMI 
TaxTMI 
2022 (7) TMI 716
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....heet /audit reports, bank statement were seized and statement of Shri Jagdishchandra Somani was recorded. Since, no documents like invoices/ bills were issued by the Appellant to various parties against the provisions of services could be found and recovered during the search, the revenue authorities collected the copies of invoices/ debits notes from the customers of the Appellant. On examination of the said debit notes/ invoices it was alleged that the Appellant have provided the Business Auxiliary Service, Management or Business Consultancy Services and Advertising Agency Services to customers. The officers also searched the premises of M/s Consumer Marketing Pvt. Ltd. and statement of Mr. Rajesh Ramchandra Stave, Authorized Signatory of M/s Consumer Marketing Pvt. Ltd. was recorded. It was alleged that the Appellant have collected the service tax from the customers. Investigation also revealed that Appellant have availed the cenvat credit without having any corroborative evidence. The said investigation was culminated into show cause notice asking them to show cause as to why - "(i) the service tax amounting to Rs. 3,50,25,248/- including cess, should not be demanded a....
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....apter -V of the Finance Act, 1944 as omitted vide Section 173 of CGST Act. The initiation of the proceedings vide the present show cause notice and the confirmation of demands by the impugned order is without jurisdiction, unconstitutional and erroneous and hence, deserves to be quashed and set aside. 3.1 He submits that the impugned order failed to consider that the show cause notice invoked wrong provision of the Finance Act, 1994 to demand Service tax. The demand of Service tax should have been proposed under Section 73A of the Finance Act, 1994 and not under Section 73. Therefore, there can be no demand of Service tax as the impugned order is passed without jurisdiction and hence liable to be quashed and set aside. He placed reliance on the following decisions: (i) Checkmate Industries Services Vs. CCE, Pune -III, 2016(44)S.T.R. 290 (Tri. -Mumbai) (ii) M/s Fusion India Inc V. CCE & ST., Lucknow- 2018 (11) TMI 358 -CESTAT Allahabad. 3.2 He also submits that the show cause notice proposes to recover service tax amounting to Rs. 3,50,25,248/- under Section 73 of the Finance Act, 1994 which is the provision for recovery of Service tax. However, the show caus....
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....provided by the recipients/ customers of the Appellant. 3.5 He also submits that the Appellant have provided Goods Transport Agency Services to M/s Consumer Marketing Pvt. Ltd. and M/s Lupin Ltd. The Service tax if any had to be paid by the recipient of the services under reverse charges mechanism and not the Appellant. The Show cause notice relies on the statement of Mr. Rajesh Stave of M/s Consumer Marketing Pvt. Ltd. to allege that the Appellant have provided marketing consultant services. The statement of Mr. Rajesh Stave is not based on any documentary evidence. 3.6 He further submits that demand of service tax is based on the definition of Services existed prior to 01.07.2012. However, the entire period of dispute in the present case is falling on or after 01.07.2012. The demand of service tax on the definition based in erstwhile regime cannot be confirmed. The show cause notice has failed to analyse the transactions properly and mechanically raised the demand of Service tax. He placed reliance on the following decisions: • Maharashtra Industrial Development Corporation 2014 (36) STR 1291 (Tri.- Mum) • Frisco Foods Pvt. Ltd. Vs. CCE, Dehradun 2....
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....n 9D(1)(b) of the Act. The Procedure prescribed in sub-section (1) of Section 9D is required to be scrupulously followed, as much in the adjudication proceedings as in criminal proceedings relating to prosecution. He placed reliance on decisions M/s G-Tech Industries Vs. Union of India 2016 (6) TMI 957-P&H - HC. 3.11 He submits that during the search proceeding at the premises of the Appellant at Sanghvi Tower, Adajan Road, Surat by the department, the panchnama was drawn. The said Panchnama refers to the Panchas as Mr. Ashwin Modi, resident at Katargam Darwaja, Surat & Mr. Swaroop Majee, Resident of Udhana, Surat. For the search proceedings, provisions of Code of Criminal Procedure, 1973 (2 of 1974) shall apply. The provisions of CrPC require that the Panchas ought to be the persons from the same locality who are respected and not dis-reputed. In the present case, the Panchas identified by the officials of the department were of a different locality. Thus, the entire search proceedings stands vitiated for want of proper procedure. 3.12 He also submits that it is a settled principle of law that in absence of corroborative evidence when the only relied upon document by t....
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....) • Sterlite Industries (I) Ltd. Vs. CCE Tirunelvelli 2017(357)ELT 161 (Tri- Chennai) 4.2 As regard the availment of Cenvat Credit by the Appellant he submits that ST return of service provider does not commensurate with Appellant's claim and condition of Rule 4(7) of Cenvat Credit Rules not fulfilled. Cenvat invoices of M/s Mehmood Construction Pvt. Ltd. show that appellant have received manpower services but it is not understood what is the need of the manpower service received by the Appellant while providing their output services. 4.3 He argued that for the GTA service rendered Appellant have only produced Debit Note/ Consignment note. No supporting details was produced. 4.4 He further submits that Section 73 covers the tax not paid or short paid, which covers the demand made of service tax in present case, while Section 73A covers only two situations viz. 73A (1) covers tax collected in excess than the prescribed rate and 73A(2) covers the situation where any amount representing as service tax has been collected which was not liable to be paid. Here, in this case none of the above two situation is there. He placed reliance on the decision of Bajaj Allianz....
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....as found by the authorities below, and having bearing on tax liability of assessee, even though said question was neither raised before the lower authorities nor in appeal memorandum before the Tribunal, but sought to be added later as an additional ground by a separate letter. 5.1 In the matter Devangere Cotton Mills Ltd. v. Commissioner - 2006 (198) E.L.T. 482 (S.C.) the question arose whether the third member of the Customs, Excise and Gold (Control) Appellate Tribunal to whom the case was referred on difference of opinion between the Bench of two members could permit an additional ground to be raised under Rule 10 of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982. The Hon'ble Supreme Court held that the Tribunal has got wide power to hear and consider a new ground and decide the appeal. The relevant observations are as follows : "Rule 10 of the 1982 Rules allows the parties to urge grounds not taken in the appeal provided the Tribunal grants leave to the parties to do so. The Tribunal has also been given a wide power to decide the appeal on grounds not taken in the memorandum of appeal. The only limitation on this power of the Trib....
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....xamine all the grounds raised before it by both the sides in accordance with law and both the parties are directed to cooperate in proceeding with the matter with requisite promptness. Appeal is, accordingly, allowed. Rule is confirmed. No order as to costs." In view of the above precedent law, we are of the considered opinion that the Law/Rules has not precluded CESTAT for considering new grounds/ evidence. We do not find merit in the pleas of the Ld. Departmental representative in this regard. 5.2 We find that in the present matter it is on record that during the search at the premises of the Appellants, no invoices/ debit notes etc., raised to their customers were found. The department in the present matter recovered the said alleged debit notes/ invoices from the customers. The Business Premises of M/s Consumer marketing (India) Pvt. Ltd. was searched and documents/ records were seized. Shri Rajesh Ramchandra Stave, Authorized Signatory of service recipient of M/s Consumer Marketing (India) Ltd, in his statement admitted the receipts of taxable services from Appellant.We also noticed that presumption of documents in certain cases under Section 36A of the Central Excise Ac....
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....at sections of the Central Excise Act 1944, as stipulated and in force from time to time shall apply so far as may be in relation to Service Tax as they apply in relation to duty of excise. Section 83 of the Finance Act reads as under : - "83. Application of certain provisions of Act 1 of 1944. - The provisions of the following sections of the Central Excise Act, 1944, as in force from time to time, shall apply, so far as may be, in relation to Service Tax as they apply in relation to a duty of excise :- sub-section (2A) of section 5A, sub-section (2) of Sections 9A, 9AA, 9B, 9C, 9D, 9E, 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 12E, 14, 15, 15A, 15B, 31, 32, 32A to 32P (both inclusive), 33A, 34A, 35EE, 35F, 35FF, to 35-O (both inclusive), 35Q, 35R, 36, 36A, 36B, 37A, 37B, 37C, 37D, 38A and 40." 5.3 In view of the above Section 83 of the Finance Act, 1994 a relevant Section 9D is applicable in the case of Service Tax matters also. The Department for confirmation of service tax demand also relied on the statement of the Director of the Appellant. We find that, it is settled law that though the admission is extremely important piece of evidence but it cann....
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....ervice tax on the basis of statement of persons not sustainable. 5.5 We also find that in the present case, allegation of the department is that Appellant have collected amount as commission from M/s Consumer Marketing (India) Pvt. Ltd. and M/s Lupin Ltd. against the provisions of commission agency service, when the Service tax is demanded on alleged services, it is the responsibility of the department to show that the appellant had rendered same services to customers with positive evidences. In the present case department failed to do so. We noticed that in the present matter director of Appellant's company submitted the Affidavit along with copies of invoices/ Debit notes /consignment notes raised by the Appellant and invoices raised upon them by their service providers. The said documents clearly established that the nature of the service provided by the Appellant to their customers are in the nature of Goods Transport Agency service and not the Commission Agency Service. We noticed that in terms of Notification No. 30/2012 -ST dated 20.06.2012 on GTA service, service tax is to be paid by the recipient of services i.e. M/s Consumer Marketing Pvt. Ltd. and M/s Lupin Ltd. and a....
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.... also. The impugned order is set aside and the appeal is allowed." In the matter of Calvin Wooding Consulting Ltd. Vs. Commissioner of C.Ex. Indore 2007 (7) S.T.R. 411 (Tri. - Del.) also Tribunal observed as under : 21. The liability of the recipient cannot arise merely from the fact that, the income-tax was deducted at source, which was the requirement of the Income-tax Act, on the recipient who made payment to the foreign supplier. Such a statutory requirement, as exists under the Income-tax law on the person making the payment to deduct tax at source, as a tax collecting agency of the Revenue, does not exist under the provisions of the Service Tax law, and no obligation was cast upon the recipient of the service to make any deduction from the amounts payable by way of consideration, under the statutory provisions. Authorization to pay Service tax under a contractual arrangement which obliged the recipient to pay the tax and file return, was a matter distinct and different from a statutory obligation to make tax deduction as a collecting agency, as envisaged under the Income-tax law. The Commissioner (Appeals) has, therefore, rightly set aside the orders-in-original i....
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....aving been rendered in the Jurisdiction of Rajasthan. No inquiries have been conducted by the Revenue to support their case. As such, we find that present appeal is without merit and accordingly, the same is dismissed. As per the consistent view taken in the above judgments, we are of the view that the demand of services tax is not sustainable on the basis of TDS /26AS statements. 5.8 Without prejudice, we also find that the show cause notice alleged that Appellant have provided business auxiliary services to M/s Consumer Marketing (India) Pvt. Ltd., Mumbai and M/s Lupin Ltd. whereas appellant have provided the GTA services as discussed above. Even if it is assumed that appellant have provided the business auxiliary service the impugned show cause notice has not specified under which clause of the definition of Business Auxiliary Service the activity of the Appellant falls. For determining the taxability of services, it very important. In the absence of the specification of the exact sub-heading under which the service falls, taxability of service cannot be decided. In this regard, the judgments relied upon by the appellant in the case of United Telecoms Ltd. v. Commissioner ....