TaxTMI 
TaxTMI 
TaxTMI 
2024 (4) TMI 172
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....inance 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. 2.3 During the search conducted on 07.04.2016 statement of Shri Omk....
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....994 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 the figure of Rs.25 lakhs as was stated by the appellant at the time of visit by the officers, no investigations were made against the persons/parties to wh....
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....ts. 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 acceptable as in the instant case the short payment was detected on account of several factors mentioned below, which have been duly accepted/ admitted by the party in their statement. a. non issuance of invoices even a....
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....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). Explanation - For the purpose of this rule, wherever any advance by whatever nam known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance." 4.5 From the perusal of the above rule, it is evident that in case o....
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....riod 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 cess total amounting to Rs. 25,01,176/-, willfully suppressing facts and thereby, violated the provisions of Section 68 of the Finance Act, 1994 read with Rule 6 of Service Tax Rule, 1994 (here-in-after referred to as 'the Rules')." 4.6 No evidence has been produced to show that appellant has not paid the service tax in respect of these tr....
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....ve 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 been paid. In other cases when drawing will be approved & finalized as per proposal, bills will be raised & service tax will be paid. Q-20. Have you correctly & timely paid your service tax liability on bills issued by you? A. Yes, I have correctly paid service tax for the bills issued by us & in case of delay I have paid service tax with interest. I hereby submit that I will find / ascertain the differential service t....
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....11 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, thereafter appellant have raised invoice charging service tax and thereafter on receipt of such consideration have complied with and paid the service tax. Further, in the facts and circumstances, we find that the show cause notice is also bad for invoking extended period of limitation as enquiry in the transaction under dispute had started in February, 2013 whereas the show cause notice was issued only on 31-3-2014 for the period under dispute April, 20....
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....er 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 contrary to the provisions of the Finance Act, 1994 and the Rules, I am inclined to interfere. 30. The decisions of the CESTAT relied upon by Mr. Sundar are distinguishable since they have been rendered prior to the enactment of the Point of Taxation Rules and Rule 3 thereof. The judgments of the Supreme Court and of this Court relied upon have been rendered in distinguishable factual matrices. While there is no quarrel on the proposition that normally Courts will be slow in interfe....
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....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 paying the service tax, than whether in such a situation the appellant is liable to pay interest on the delayed payment, considering that the delay is not on account of the fault of the appellant. 55. A similar issue comes up often in Central Excise matters when the transaction value of the goods is unknown, either partly or fully when the goods are cleared. This happens with Government contracts which fix the price based on a formula, several elements of which (say cost of raw material or minimum wages of the labour) are ....
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....hen 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 follows : "17. We are unable to subscribe to the view taken by the High Court in Rucha Engg. [First Appeal No. 42 of 2007, decided on 3-4-2007] It is to be noted that the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short-payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding th....