TaxTMI 
TaxTMI 
2024 (2) TMI 562
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....iate interest as leviable under Section 75 of the Finance Act, 1994 (as alleged in the show cause notice dated 24.9.2015) (ii) I confirm demand of Service Tax amounting to Rs.1.20.094/- (Rs. One Lakh Twenty Thousand and Ninety Four only) on the abated portion of value of services upon M/s Nexus Engineers, M-30, Paper Mill, Mahanagar, Lucknow under proviso to Section 73(1) of the Finance Act. 1994, alongwith appropriate interest as provided under Section 75 ibid. (iii) I impose a penalty of Rs 5.65.033 (Rs 4.44.939+Rs1.20.094) (Rupees Five lakhs Sixty Five thousand and thirty three only) upon M/s Nexus Engineers. M-30. Paper Mill. Mahanagar, Lucknow under Section 78 of the Finance Act 1994, for suppressing the material facts and willful misstatement, with intent to evade payment of service tax. (iv) I confirm the demand of wrongly taken Cenvat Credit of Rs.69.864/- (Rs. Sixty Nine Thousand Eight Hundred and Sixty Four only) upon M/s Nexus Engineers. M-30. Paper Mill, Mahanagar. Lucknow availed on the basis of improper invoices under Rule 14 of the Cenvat Credit Rule 2004 along-with applicable interest under Section 75 of the Finance Act 1994. (as alleged in the show cause n....
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.... the recovery of Interest on the aforesaid demands was proposed from the appellant under Section 75 of the Finance Act, 1994. the imposition of penalty under Section 78 of the Finance Act, 1994 on the appellant was proposed for suppression of information from the department and contravention of the provisions of Finance Act, 1994 with intent to evade payment of Service Tax. the recovery of inadmissible Cenvat Credit to the tune of Rs.69,864/- along with applicable interest was proposed from the appellant under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 73(1) of the Finance Act, 1994 and Section 75 of the Finance Act, 1994. the imposition of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 on the appellant was proposed for suppression of information from the department and contravention of the provisions of Finance Act, 1994 with intent to evade payment of Service Tax." 2.4 This show cause notice was adjudicated as per the Order-in-Original referred in para-1 above and the appeal filed by the appellant has been dismissed as per the impugned order. Aggrieved appellant has filed the present appe....
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..... 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For holding against the appellant, impugned order records as follows:- 10.1 Issue No.1 10.1.1 In view of the facts of the case (discussed in para 3 to 5 supra), the grounds of appeal (discussed in Para 6 supra) and oral submissions made during the course of personal hearing (discussed in para 7 supra), it can be observed that this issue relates to the payment of Service Tax on the value which has not been received by the Service Provider. 10.1.2 In this regard, I find that prior to 01.04.2011, the Rule 6(1) of the Service Tax Rules, 1994 read as under:- "6(1) The Service Tax shall be paid to the credit of the Central Government - (i) by the 6th day of the month, if the duty is deposited electronically through Internet banking and (ii) by the 5th day of the month, in any other case, Immediately following the calendar month in which the payments are received, towards the value of taxable services." Provided that where the assessee is an Individual or proprietary firm or partnership firm, the service tax shall be paid to the credit of the C....
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....ssued a credit note for the value of the service tax not so provided to the person to whom such an invoice had been issued." 10.1.4 In view of the provisions reproduced in Para 10.1.2 and 10.1.3 above, I find that prior to 01.04.2011, the Service Tax was liable to be paid when the payments were received towards the taxable services whereas w.e.f.01.04.2011, the service tax was liable to be paid when the invoice was issued (or service was provided). From the facts of the case, I find that year-wise bifurcation of the demand of Rs.4,44,939/- is as under:- F.Y.2010-11:- Rs.3,65,224/- F.Y.2011-12:- Rs.73,033/- F. Y.2012-13:-Rs.6,682/- The department has raised the said demand on the basis of reconciliation chart already reproduced in Para 3.2(i) supra. Per-contra, the appellant has contended that since the value on which the demand has been raised was not received by them and accordingly, the Service Tax is not liable to be paid by them. The appellant also claimed that they are submitting the relevant debit notes issued by the Service Receivers, Ledger of Bad Debts, Reconciliation chart etc. with the appeal memorandum which will corroborate their claim. At the outs....
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....ion). 10.2.2 I find that the said exemption notification granted abatement of 67% (on the gross receipts) to the person providing the taxable services under the category of 'Erection, Commissioning & Installation Service' and 'Commercial and Industrial Construction Service The said abatement from gross taxable value was interalia subject to certain conditions in light of following proviso to the said exemption notification:- "Provided that this notification shall not apply in cases where - the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such faxable service, has been taken under the provisions of the CENVAT Credit Rules, 2004, or the service provider has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2003- Service Tax, dated the 20th June, 2003 [G.S.R. 503 (E), dated the 20th June, 2003." 10.2.3 I find that the original adjudicating authority has denied the benefit of exemption Notification on the basis of the fact since the appellant was availing the benefit of Cenvat Credit on various input services....
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....8. It is well established principle that the exemption notifications are to be construed strictly, reference may be made to State of Jharkhand & Others v. Tata Cummins Ltd and another, 2006 (4) SCC 57 and Kartar Rolling Mills v. Commissioner of Central Excise, New Delhi 2006 (4) SCC 772. If the intention of the legislature is clear and unambiguous, then it is not open to the courts to add words in the exemption notification to extend the benefit to other items which do not find mention in the notification...... In view of the above pronouncements of the apex court, I find that on various occasions it has been observed by the courts of law that an exemption notification has to be construed strictly. There is no scope of any extension / restriction in the scope of the exemption Notification. 10.2.6 In light of the above-mentioned judgments, I find that the said exemption notification is clear in its wording that the benefit of abatement would not be available only If Cenvat Credit on Inputs / Capital Goods / Input Services used in providing such services has not been availed. In the present case, I find that the appellant was availing Cenvat Credit in respect of Input service....
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....eceived and accounted for in the books of the account of the receiver, he may allow the CENVAT credit. Rule 4A of the Service Tax Rules, 1994, provides for the details which are to be mentioned on a service invoice. The said rule can be reproduced as under:- "Rule 4A. Taxable service to be provided or credit to be distributed on invoice, bill or challan- (1) Every person providing taxable service shall not later than fourteen days from the date of provision of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier, shall issue an invoice, a bill or, as the case may be, a challan signed by such person or a person authorized by him in respect of taxable service provided or to be provided and such invoice, bill or as the case may be challan shall be serially numbered and shall contain the following, namely:- (i) the name, address and the registration number of such person; (ii) the name and address of the person receiving taxable service; (iii) description, classification and value of taxable service provided or to be provided, and (iv) the service tax payable thereon." 10.3.4 From the above mentioned rule....
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.... S.No. Financial Year 2010-11 2011-12 2012-13 2013-14 MAINTENANCE & REPAIR SERVICE 1 Income from O&M (Maintenance & Repair) as shown in Balance Sheet (excluding Service Tax) 50012660 39970991 38176755 46659314 2 Last Year Debtors (Including Service Tax) 17534354 N.A. N.A. N.A. 3 Last Year Debtors (Including Service Tax) 15896966 N.A. N.A. N.A. 4 TOTAL (1+3) 65909626 39970991 38176755 46659314 5 Current Year Debtors (Including Service Tax) 6581011 N.A. N.A. N.A. 6 Current Year Debtors (Including Service Tax) 5966464 N.A. N.A. N.A. 7 Total Taxable Value (4-6) 59943162 39970991 38176755 46659314 8 Taxable Value as shown in ST-3 Return 56397302 39276309 38122691 48891267 9 Value on which Service Tax not paid (7-8) 3545860 694642 54064 - 10 Service Tax Short Paid 3,65,224 71,552 6,682 11 Total Service Tax Short Paid Rs.4,43,458/-(Rs.3,65,224/-+Rs.71,552/- +Rs.6,682/-) ERECTION, COMMISSIONING AND INSTALLATION SERVICE 12 Income from Erection, Commissioning and Installation as per Balance Sheet (excluding Service Tax) - 198372 - &n....
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....lation to the said works contract, under the provisions of CENVAT Credit Rules, 2004." We reproduce the proviso appended to exemption Notification No.1/2006-ST dated 01.03.2006 as it existed during the relevant period:- Provided that this notification shall not apply in cases where, - (i) the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has been taken under the provisions of the CENVAT Credit Rules, 2004; or (ii) the service provider has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2003-Service Tax, dated the 20th June, 2003[G.S.R. 503 (E), dated the 20th June, 2003] Appellant has not produced any evidence to show that they have not availed Cenvat credit in respect of the input services as alleged in the show cause notice. However the dispute is whether the appellants were providing the service under the category of "erection Commissioning and Installation Service & Construction Service in respect of Commercial or Industrial Building and Civil Structure Service" or the "work contract servi....
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....of granting exemption [See Hansraj Gordhandas Vs. H.H. Dave, Assistant Collector of Central Excise Customs, Surat & Ors., AIR 1970 SC 755]. Further it's for the assessee to show by construction of the exemption clause/notification that it comes within the purview of exemption. The assessee/citizen cannot rely on ambiguity or doubt to claim benefit of exemption. The rationale is not to widen the ambit at the stage of applicability. However, once the hurdle is crossed, the notification is constructed liberally [See Collector of Central Excise, BombayI & Anr. vs. Parle Exports (P) Ltd., (1989) 1 SCC 345 and Union of India & Ors. vs. Wood Papers Ltd. & Anr., (1998) 4 SCC 256]. Thus, distinction can be made between the substantive requirements that require strict compliance - noncompliance of which would render the assessee ineligible to claim exemption, and the procedural or compliance provision which can be interpreted liberally [See paragraphs 64 to 65 in Dilip Kumar & Company]. 9.2 Essar Steel India Ltd. & Anr. was a case relating to grant of exemption under Section 3(2)(vii)(a) from payment of electricity duty under the 1958 Act. The court relied on several decisions on interpre....
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.... 16, it is observed and held as under:" 16. We have already pointed out that on the plain language of the provision in question, the benefit of the said clause would be applicable only in respect of the building "which has been constructed". The expression "has been constructed" obviously cannot include within its sweep a building which is not fully constructed or in the process of construction. The opening words of clause (ii) also become important in this behalf, where it is stated that "the land occupied by any building". The land cannot be treated to be occupied by a building where it is still under construction. If the contention of Mr Jain is accepted, an assessee would become entitled to the benefit of the said clause, at that very moment, the commencement of construction even with construction the moment one brick is laid. It would be too farfetched, in such a situation, to say that the land stands occupied by a building that has been constructed thereon. Even Mr Jain was candid in accepting that when the construction of building is still going on and is not completed, literally speaking, it cannot be said that the building "has been constructed". It is for this reason th....