TaxTMI 
TaxTMI 
2024 (4) TMI 112
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....of the Finance Act, 1994. 2. I also order for charge and demand of interest at the appropriate rate under Section 75, ibid on Rs. 10,65,330/- at (1) above. 3. I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand only) upon the party under Section 77 of the Finance Act, 1994. 4. I impose a penalty of Rs.10,65,330/- (Rupees Ten Lacs Sixty Five Thousand Three Hundred and Thirty only) upon the party under Section 78 of the Finance Act, 1994, an amount equal to service tax evaded." 2.1 Appellant is providing taxable services under the commercial or industrial building and civil structure, Management Consultant Service, Technical Inspection and Certification, Repair and Maintenance Service, Business Auxiliary Service, and Renting of Immovable Property Service. 2.2 During the course of audit, it was observed that appellant have wrongly adjusted service tax payment to the tune of Rs.10,65,330/- under Rule 6 (3) of Service Tax Rules, 1994 in the month of October, 2010 and November, 2010 as reflected in ST-3 returns for the period October, 2010 to March, 2011. 2.3 Appellant was asked to deposit this wrongly adjusted service tax vide letter dated 23.09.2....
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....195 (SC)] No penalty under Section 77 could have been imposed and the appellant should be given the benefit of Section 80. In the case of Motor World [2012 (27) S.T.R. 225 (Kar.)] following has been held: "6. It is in this background keeping in mind the object and intendment of the Parliament in enacting this law, the provisions dealing with the penalty have to be considered. Sections 76, 77, 78 and 80 of the Finance Act reads as under :- "Section 76. Penalty for failure to collect or pay Service tax. - Any person liable to pay Service tax in accordance with the provisions of Section 68 or the Rules made thereunder, who fails to pay such tax shall pay in addition to paying such tax, an interest on that tax in accordance with the provisions of Section 75, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of Service tax that he failed to pay. Section 77. Penalty for failure to furnish prescribed return. - If a person fails to furnish in due time the return which he is requi....
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....x. Even if a person who has registered himself and has been paying Service tax for certain activities, may fail to include in his returns the activity, which according to him does not attract Service tax and therefore may not pay tax. It also amounts to a case of failure to collect or pay Service tax on that particular activity, though he has registered himself under the Act and has filed returns in respect of activity on which Service tax is attracted. In such cases, there is a bona fide dispute whether tax is payable or not and whether a particular activity is construed as a taxable service under the Act. 10. It is in this background that, we have to take note of the fact that when the Service tax was introduced in 1994 for the first time, it had only three taxable services. In every annual Finance Act, different categories of services are brought within the tax net. Even though the expressions "services" and "taxable services" are defined, there may be a doubt whether a particular activity falls within those definitions and is liable to Service tax. It is after a period of time that disputes arose, matters reached judicial forums, doubts cleared and law laid down. It ca....
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....th a non obstante clause and provides that notwithstanding anything contained in several provisions enumerated therein including section 271C, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. A clause beginning with "notwithstanding anything" is sometimes appended to a section in the beginning with a view to give the enacting part of the section in case of conflict an overriding effect over the provision of Act mentioned in the non-obstante clause (see Orient Paper and Industries Ltd. v. State of Orissa, AIR 1991 SC 672). A non-obstante clause may be used as a legislative device, to modify the ambit of the provision of law mentioned in the non-obstante clause, or to override it in specified circumstances. (see T.R. Thandur v. Union of India, AIR 1996 SC 1643). The true effect of the non-obstante clause is that in spite of the provision or Act mentioned in the non-obstante clause, the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operati....
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.... be exercised reasonably. Before levying penalty, the authority is required to find out whether there was any failure referred to in the concerned provision and the same was without a reasonable cause. The initial burden is on the assessee to shown that there existed reasonable cause, which was the reason for the failure referred to in the concerned provision. Thereafter the authority has to consider the explanation offered by the assessee for failure and whether it constitutes a reasonable cause. "Reasonable cause" means an honest belief founded upon reasonable grounds, of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinarily prudent and cautions man, to come to the conclusion that the same was the right thing to do. Only if it found to be frivolous, without substance or foundation, the question of imposing penalty would arise." 3.3 Learned Authorised Representative reiterates the findings recorded in the orders of the lower authorities. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 In the impugned order following has been observed for up....
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.... group company, this leads to doubt regarding the genuineness of the credit note. Be that as it may, Rule 6(3) ibid provides for adjustment only when a taxable service was not provided either in full or in part and not in situation where services were provided and the same were found to be poor/ deficient by the recipient. 10. As regards the contention of the appellant that extended period was not invokable in the case I find that the fact of issue of credit notes on account of poor performance was disclosed by the appellant only when the matter was detected at the time of audit. Prior to that, these facts were not intimated to the department. Hence vital facts on the basis of which demand has been raised and confirmed were suppressed from the department and extended period in the instant case has been rightly invoked." 4.3 Undisputedly, this is the case prior to the notification of Point of Taxation Rules, 2011. During the relevant period the service tax was payable on the amounts received by the service provider against the taxable services provided. Rule 6(3) of Service Tax Rules provided for adjustment of excess service tax paid during the subsequent period, R....
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..../s Vipul IT Infrasoft Pvt. Ltd. but have refused to accept the same for a simple reason that the same was issued without any apparent discussion and negotiation and being in respect of only one bill. Accordingly, raised doubt regarding the genuineness of the credit note, the doubt in the mind of Commissioner (Appeals) is specified by any evidence which has been part of record. On the contrary, it is submission of the appellant that the figures stated in the balance sheet for the year 2009-10 wherein the total value of services provided is shown as Rs.24,55,90,004/- instead of Rs.27,63,86,166/- as claimed in the ST-3 returns. After this difference in the true values is on account of the amount refunded by way of issuance of credit note as this amount of Rs.3,24,07,774/- inclusive of service tax of Rs.10,65,330/- was refunded back to their service recipients, the same was excess payment and could have been adjusted as per Rule 6(3) in subsequent returns. 4.6 The view expressed by us is in line with the decisions as follows: A. In the case of Central Mine Planning And Design Institute Ltd. [2014 (36) S.T.R. 328 (Tri. - Del.)], Delhi Bench has held as follows: 5. After h....
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....yment of Service Tax can be adjusted for future payments. With these observations, the contention of the ld. AR that if they have paid excess Service Tax for the earlier period, they have to file refund claim is not acceptable in the light of the judgment in the case of Nirma Architects & Valuers (supra), wherein this Tribunal held that if adjustment of excess Service Tax is not allowed for future payments, the provisions of Rule 6(3) ibid shall become otiose and non-implementable. As the fact that excess payment is not in dispute and same has been adjusted for the future liability of Service Tax by the appellant, therefore, to pay Service Tax is only an exercise which created hurdle in the smooth functioning of imposition and collection, as held by the Tribunal. Therefore, the adjustment can be allowed. 9. In these circumstances, I allow the adjustment of excess Service Tax paid by the appellant during the period 2001 to 2002 for the Service Tax liability to October, 2002 to March, 2003. In the light of these observations, the matter is remanded back to the Adjudicating Authority to make the adjustment of the demand for the period October, 2002 to March, 2003 with the exc....
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....s to pay service tax at the rate of 0.25% of the basic fare (up to 13-5-2003) and at the rate of 0.40% of the basic fare from 14-5-2003 in the case of domestic tickets and in the case of international tickets at the rate of 0.50% up to 13-5-2003 and at the rate of 0.80% from 14-5-2003, respectively. In the other option, an assessee can pay service tax at the rate of 5% up to 13-5-2003 and at the rate of 8% from 14-5-2003 on the commission received from the airlines. 3. The dispute in the present case arose on account of the fact noticed by the Revenue that the assessee had taken suo motu refund of service tax of Rs. 3,17,661/- on account of service tax already paid in respect of the tickets which were cancelled. 4. In appeal, the Commissioner (Appeals) upheld the order passed by the Assessing Officer. However, the Tribunal accepted the appeal filed by the assessee. The contention raised by the assessee before the Tribunal was based on circular dated 26-6-1997 of the Central Board of Excise and Customs (for short, „the Board') and also an order passed in the case of the assessee in Jaipur jurisdiction whereby the claim of refund/adjustment of the service tax ....