TaxTMI 
TaxTMI 
2024 (2) TMI 562
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....ction 73(1) of the Finance Act. 1994 along with appropriate 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 ....
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....wrong availment of abatement) was proposed from the appellant under proviso to Section 73(1) of the Finance Act, 1994. 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 referre....
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....credit should not be denied to them for this reason as they had already intimated the change of address. 3.3 Arguing for the revenue learned Authorized representative reiterates the findings recorded in the impugned order. 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 cas....
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.... or any terms contained in a contract the assessee may take the credit of such excess service tax paid by him, if the assessee, (a) has refunded the payment or part thereof, so received along with the service tax payable thereon for the service to be provided by him to the person from whom it was received: (b) has issued 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 t....
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....e 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 eligibility of abatement provided under Notification No.01/2006-ST dated 01.03.2006 (as amended from time to time) (hereinafter referred to as the said Exemption Notification). 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 avail....
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....ption notification should be construed strictly, but once an article is found to satisfy the test by which it falls in the notification, then it cannot be excluded from it by construing such notification narrowly." (b) In case of Orient Traders Versus Commercial Tax Officer, Tirupati reported in 2009 (237) E.L.T. 447 (S.C.) it was held that an exemption notification has to be construed strictly. The relevant part of the judgment is reproduced as below:- 18. 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 ....
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....ut contains the details of duty or service tax payable, description of the goods or taxable service, assessable value, Central Excise or Service tax registration number of the person issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of output service and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received 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 ....
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....1994 read with the Valuation Rules made under the said section just by comparison of the receipts under profit and loss account with ST-3 returns. It cannot be inferred that the receipt was in respect of the service provided for computing this demand. Further the actual amounts received should have been the basis of the demand, and any amounts shown as bad debts should have been excluded while determining the taxable value. The similar observations have been made by the tribunal in the various decisions relied by the appellant. Show cause notice computed the demand on the basis of following table :- 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. ....
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.... proceed against the appellant. On the issue no.2- Appellant claim that they are entitled to claim the benefit of abatement under Rule 3 (2) of Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 and also claim the benefit of the CENVAT Credit in respect of the input services. Rule 3 (2) of the said rules, and explanation 2 to Rule 2B of Service tax (Determination of Value) Rules, 2006 is reproduced below: "Rule 3 (2) The provider of taxable service shall not take CENVAT Credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004." "Explanation 2 to Rule 2(B): "For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT Credit of duties or cess paid on any inputs, used in or in relation 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 d....
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....e bench of this Court has held that in every taxing statute -- the charging, the computation and exemption provisions at the threshold stage should be interpreted strictly. In case of ambiguity in case of charging provision, the benefit necessarily must go into favour of the subject/assessee. This means that the subject of tax, the person liable to pay tax and the rate at which the tax is to be levied have to be interpreted and construed strictly. If there is any ambiguity in any of these three components, no tax can be levied till the ambiguity or defect was removed by the legislature [See pages 53 to 55 in Dilip Kumar & Company]. However, in case of exemption notification or clause, same is to be allowed based wholly by the language of the notification, and exemption cannot be gathered by necessary implication, or on a construction different from the words used by reference to the object and purpose 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 ass....
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.... is no new room for intendment. Regard must be to the clear meaning of the words. Claim to exemption is governed wholly by the language of the notification, which means by plain terms of the exemption clause. An assessee cannot claim benefit of exemption, on the principle that in case of ambiguity a taxing statue must be construed in his favour, for an exception or exemption provision must be construed strictly. 9.4 In the case of Giridhar G. Yadalam (supra), it is observed and held that in taxing statute, it is the plain language of the provision that has to be preferred where language is plain and is capable of one definite meaning. It is further observed that the strict interpretation to the exemption provision is to be accorded. It is observed that the purposive interpretation can be given only when there is some ambiguity in the language of the statutory provision or it leads to absurd results. In paragraph 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 ....
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....ellant failed to establish that claim for exemption under the notification no 1/2006-ST, the demand made by denying abatement for determination of taxable value for the levy of service cannot be faulted with. Hence in our view the demand on this count needs to be confirmed. On the issue no.3- The credit has been sought to be denied for the reason that the invoices against which the appellant has taken the credit was not addressed to the registered premises of the appellant. We find that the issue in this regard is no longer res integra and the Tribunal/Courts have decided that for claiming the benefit of input services, it is not necessary that invoices be addressed to the registered premises of the appellant. Reliance is placed on the following decisions:- Manipal Advertising Services Pvt. Ltd. [2009 (10) TMI 434 - CESTAT, BANGALORE]; mPortal India Wireless Solutions P. Ltd. [2012 (27) S.T.R. 134 (Kar.)]; Allspheres Entertainment Pvt. Ltd. [2015 (8) TMI 953 - (CESTAT DELHI)]. Well Known Polyesters Ltd. [2011 (1) TMI 664 - CESTAT, AHMEDABAD] Gail India Ltd. [2016 (1) TMI 299 - CESTAT NEW DELHI] Atrenta....