TaxTMI 
TaxTMI 
2024 (4) TMI 172
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....e recovered under the proviso to Section 73(1) of the Finance Act, 1994 along with interest at the appropriate rate payable under Section 75 of the Finance Act, 1994 read with Section 174 and 142 of the CGST Act, 2017. Since the party have already deposited the Service Tax amounting to Rs.25,00,000/-the same is liable to be appropriated. (ii) I impose a penalty of Rs.25,01,176/- (Rupees Twenty five lakh One Thousand One Hundred & Seventy Six only) upon the party under Section 78 of the Finance Act, 1994 read with Section 174 and 142 of the CGST Act, 2017 for suppression of value of taxable service. (iii) I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand only) upon the party under Section 77 (1) (d) of the Finance Act, 1994 read with Section 174 and 142 of the CGST Act, 2017." 2.1 Appellant is registered with the Department from 29.05.2007 for providing taxable services under the category of 'Consulting Engineer Services'. 2.2 Investigations were undertaken by DGGI, Lucknow Zonal Unit, based upon the intelligence that appellant is engaged in providing taxable services and suppressing the value of taxable services, thus evading the payment of service tax....
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....d upon them under Section 77(1)(d) of the Act for not depositing Service Tax in due time as per Rule 6 of the Service Tax Rules, 1994 and Section 68 of the Act." 2.6 This show cause notice has been adjudicated as per the Order-in-Original referred in para-1 above. Aggrieved appellant has filed appeal before the Commissioner (Appeals) which has been dismissed as per the impugned order. Aggrieved appellant have filed this appeal. 3.1 We have heard Shri T. K. Srivastava learned Counsel for the appellant and Shri Sandeep Pandey learned Authorised Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that - Appellant is providing services to various Government Departments and all the payments received by them are reflecting in Form 26AS of the Income Tax Act. Demand is barred by limitation as nothing was mis-stated or suppressed. It is well evident from the record that balance sheet figures, ST-3 returns and figures and of Form 26AS and all were in conformity with each other. The demand has been made by concealing those invoices on which service tax was already paid and deposited by the appellant. Yes to make ....
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....the Service Tax Rules, 199, the service provider has to issue invoice/ bill on receipt of any payment towards the value of the taxable service. Thus, invoice/ bill has to be issued even for advance payments. However, in respect of the impugned value, no invoice/ bills were found to have been issued. The appellant claims that some bills were already issued, but details of such bills and value thereof have not been furnished in the grounds of appeal. The argument of limitation is not sustainable in view of the facts narrated in para 6.13 of the impugned order. In view of the above, I do not find any merit in the appeal and the same is dismissed." 4.3 From the above observations which are stated in the impugned order, it is evident that appellant has failed to issue invoice/bill on receipt of certain payments towards the value of taxable services, even in case where these payments were received as advance. Adjudicating authority has in the order in original recorded as follows: "6.9 I further observe that party‟s contention that during investigation their taxable value was not reconciled with their Balance Sheet, Form 26AS vis a vis ST-3 Returns is also not acceptabl....
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....e the invoice is not issued within the time period specified in rule 4A of the Service Tax Rules, 1994, the point of taxation shall be the date of completion of provision of the service. (b) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment. Provided that for the purposes of clauses (a) and (b),- (i) in case of continuous supply of service where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the receiver of service to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service; (ii) wherever the provider of taxable service receives a payment up to rupees one thousand in excess of the amount indicated in the invoice, the point of taxation to the extent of such excess amount, at the option of the provider of taxable service, shall be determined in accordance with the provisions of clause (a). Expl....
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....h before, d. receipt of payment in cash and non reflection of the same in the documents such as Balance sheet, Form 26AS vis a vis ST-3 Returns, e. non issuance of invoices in all cases of advance received. 6.10 I further observe that the invoices in respect of all drawings/works which were completed/finished during the period 20.06.2014 to 21.03.2016 as detailed in Ann I of the SCN, should have been issued at the time of completion of services in terms of Rule 3 of Point of Taxation Rules, 2011, if the same could not be issued within the time specified in Rule 4A of the Service Tax Rules, 1994. As such all these drawings/works were completed /finished during the period 20.06.2014 to 21.03.2016 as detailed in Ann I of the SCN and also admitted by the party in their statements that "depending on the convenience of their clients, they did not issue the bills in spite of completion of service". Thus I hold that the party had not raised the bills/invoices in respect of the services provided by them and had not assessed the service tax due on the taxable service, consulting engineering service provided by them and not paid/short paid the service tax including ....
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.... issued only few bills against advances received by us from our clients for initiation of our services & not from all. I agree with the lapse made us, by not issuing the bills on advance in all cases, but it depends on case to case basis. Q-13: Please see the print of bills & data taken out from your computer. Have you raised the bills in respect of given data to the concerned clients & if yes, have you paid service tax on the same? & if no, why bills are not issued? A. In respect of few cases as shown bills are raised & service tax has been paid with issue of bills in the following quarter of the issue of bills. In other cases bill will be raised on finalization of work / drawing & tax will be paid accordingly. Q-14. Please see & put your signature in token of the data print in respect of services provided to M/s. Arch En Design? Have you raised the bills for all data contained intc M/s. Arch En design on which Service Tax collection of Rs.15 Lacs approximately has been shown by you & service has already been provided by you at your end? A. All the projects in list are not finanzed, few are finalized & bills are raised for which service tax has ....
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....spute. In absence of consideration in terms of Section 65B(44) of the Finance Act, 1994 there is no service rendered. For a service to qualify as service for the purposes of Chapter-V of the Finance Act, 1994 it has to be an activity of service carried out by a person for another for consideration. Further, under the facts and circumstances of the case, we find that the point of taxation have not occurred in terms of Point of Taxation Rules, 2011 and hence no liability to pay service tax arises as raising of an invoice is a condition precedent under Rule 3(a) of the said Rules. Admittedly, in the facts of the present case no invoice has been raised by the appellant on the alleged service receiver. Further, admittedly there was no contract of service entered into by the parties providing for any periodical obligation requiring the receiver of alleged service to make any payment. It was only after the matter of „usage charges‟ went before the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), New Delhi and interim orders were passed in November, 2012 creating obligation on the receiver of the alleged service to make payment of 50% of the proposed charges, thereafte....
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....e fact, and indeed Mr. Sundar has repeatedly emphasized, that there is an alternate statutory remedy available in respect of the impugned order and as such there is no warrant for the interference of this Court in extraordinary jurisdiction under Article 226 of the Constitution of India. However, all relevant facts are on record. Both Learned Counsel concur on the position that the agreements that provide for the landmarks or stages of completion of work by the petitioner and consequential payments by the customers, is available with the Department. 28. The petitioner has also filed an Annexure tabulating the consideration actually received from the customers as a lumpsum as against the amounts that would be payable in accordance with the landmarks under contract to illustrate that in almost all cases, the advance received is in excess of what would have been received, if the consideration had been received stage-wise. It is for the assessing officer to have examined the same and sought further information to his satisfaction in completion of the assessment. 29. In the facts and circumstances as I have noticed above, where the basis of the assessment is itself con....
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....e respondent merely adopts the income reflected in the P and L account as the receipts for the purpose of service tax which is contrary to the method set out in Rule 3 for the determination of point of taxation and the quantification thereof. 34. In the light of the discussion above, the impugned order of assessment dated 21-4-2017 is set aside and the matter remitted to the file of the respondent to be re-done de novo strictly in accordance with the provisions of Rule 3 of the Rules and in the light of the observations made in this order after affording due opportunity to the petitioner, within a period of three (3) months from date of receipt of this order." 4.9 In such cases there can be demand for interest for the delayed payment of tax, as the service tax was to be paid at the time, which is statutorily prescribed as per the Point of Taxation Rules, 2011. In case of Oriental Insurance Co. Ltd [2021 (55) G.S.T.L. 369 (Tri. - Del.)] following has been held: 54. The issue, therefore, that arises for consideration is when service is rendered and service tax is due but the appellant is not able to pay it until the accounts are squared up and thereby delays payi....
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....ation clause but it is not a case where escalation is to have only prospective operation. It is to have retrospective operation admittedly. This means the value of the goods which was only admittedly provisional at the time of clearing the goods is finally determined and it is on the said differential value that admittedly that differential duty is paid. We would think that while the principle that the value of the goods at the time of removal is to reign supreme, in a case where the price is provisional and subject to variation and when it is varied retrospectively it will be the price even at the time of removal. The fact that it is known, later cannot detract from the fact, that the later discovered price would not be value at the time of removal. Most significantly, section 11A and section 11AB as it stood at the relevant time did not provide read with the rules any other point of time when the amount of duty could be said to be payable and so equally the interest. We would concur with the views expressed in SKF case (supra) and International Auto (supra)." 56. In CCE v. SKF India Ltd. [(2009) 13 SCC 461 = 2009 (239) E.L.T. 385 (S.C.)], the Supreme Court held as follow....