AI Drafter 
TaxTMI 
TaxTMI 
2024 (4) TMI 908
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....the Finance act, 1994 as amended from time to time. This amount is held to be recoverable from the party. 2. I do not impose any penalty by invoking Section 80 of the Finance Act, 1994." 2.1 Appellant is registered with the department and is engaged in providing taxable services under the category of Manpower Recruitment Agency, Cargo Handling Services, Maintenance & Repair Service, Construction Services in respect of Commercial or Industrial Buildings and Civil structures, Site Preparation and Clearance, Cleaning Services. 2.2 It was gathered from M/s Hindalco Industries Ltd. Renukoot, Sonebhadra, that in respect of various services received by them from various service providers including appellant, they have made the payments to the service providers during the period 2005-06 to 2009-10. 2.3 On the basis of the information received revenue was of the view that appellant had not paid the service tax, amounting to Rs 7,87,427/- (including cess) during the said period, by suppressing the value of taxable service provided by them. 2.4 A Show Cause Notice dated 22.10.2010 was issued to the appellant asking them to show as to why:- 1. The service tax amounting ....
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....lue of taxable services provided to M/s Hindalco Ind Ltd. resulting into short payment of service tax amounting to Rs. 7,87,427/-. The thrust of the appeal is that (i) PF amounts included in gross turnover to be excluded for the purpose of arriving at correct liability in view of fact that a separate SCN was issued by the department for the amounts received towards PF/Bonus and (ii) Service tax amount of Rs. 10,45,027/- paid by Hindalco to the appellants, was included in the gross turnover which was not includible. 7. I have gone through the case records and contents of the appeal. On the plea advanced by the appellants with reference to amounts of Provident Fund / Bonus, I find that the issue was taken up by the department in the impugned show cause notice itself. The Para 4 of the show cause notice contains as under - "A demand cum show cause notice for recovery of service tax involved on the amount of Provident Fund and Bonus received by them, if any which is included in above gross value, has been issued separately. Thus, service tax on the remaining amount suppressed gross value of Rs. 64,41,735/- remains recoverable from the party." The above observ....
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.... reference to demand of service tax. The appellants have admitted submission of a chart to the adjudicating authority for calculation of tax. I find that the issue has been examined by the adjudicating authority. He in this regard observed and held as under- "To enquire the correctness of the chart submitted by the party the matter was referred to the concerned Division. However, the concerned party has not provided the relevant record to the division or Range staff for verification. Since the supporting documents were neither submitted to the adjudicating authority nor provided to the division/Range staff, the chart submitted by the party can't be accepted. Further, the chart submitted by the party is also not proper as per valuation aspect" I find that the appellants have neither contested nor controverted the aforesaid findings. I also find that the appellants have not adduced any evidence documentary or otherwise in support of their contention. It is not denied by the appellants that Rs. 10,45,027/- claimed to have been paid by Hindalco towards service tax was not deposited by them with the Exchequer towards discharge of their tax liability. No document whatso....
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....service provider of that area. It is also obvious that the party is ready to deposit the due service Tax. In my perception Service Tax was not deposited due to unawareness only, which may be taken as reasonable cause for failure of deposit of the Service Tax. Therefore, I am not inclined to impose any penalty as proposed in he Show Cause Notice by invoking Section 80 of the Finance Act, 1994. There is plethora of cases where the penalty has been waived on the basis of ignorance of the party. In case of Magnum International ys. Commissioner of Customs & Central Excise Bhopal (Final order No ST/57-58/2008-PB, dated 03-04-2008) on the one hand invocation of extended period was justified covering the extended period demand , and on the other hand penalty was waived on the basis of reasonable cause for failure to discharge the Tax liability. It has been observed by the Hon'ble CESTAT in the case of CCE vs. Busy Bee (2009) 18 STT 18 392 (CESTAT) that if nonpayment was due to ignorance of law, penalty is not imposable." 4.5 At the time of personal hearing before the original authority while admitting his liability to pay the service tax, appellant had submitt....
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....dent Fund and Bonus received by them, if any which is included in the above gross value has already been issue separately. Thus service tax on the remaining amount of suppressed gross value of Rs 64,41,735/- remains recoverable from party. Service tax involved on this remaining gross value comes to the tune of Rs. 7,87,427/- (Service Tax Rs. 7,68,543/- + Education Cess Rs. 15,371/-+ Secondary & Higher Education Cess Rs. 3,513/-) for the period as detailed in Annexure A to this notice..." 4.8 We also find that the demand has been made in the present case, on a taxable value of Rs 64,41,735/- after allowing the deduction of the gross taxable value already declared by the appellant on the ST-3 returns for which the tax has already been paid. In the calculation chart prepared by the appellant value on which tax is being demanded, is computed by reducing the net taxable value shown by this amount then the value on which tax is to be demanded is will be Rs 58,98,143.77/- (Rs 1,47,33,668.77 - Rs 88,35,525/-). The difference in the taxable value determined by the revenue and the appellant which is Rs 5,43,591.23/- (Rs 64,41,735/-- Rs 58,98,143.77/-) cannot be on the account of deduction....
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....e service tax from their service recipient. On Invoice No 13-18/2005-06 dated 26.05.05 Service Tax of Rs 6377.00/- has been charged as per the above chart on a taxable value of Rs 189439/- and on invoice No 19/05-06 dated 26-May-05 a service tax of Rs 23,795/- has been collected. During the period prior to 16.06.2005 appellant as per his own submission has collected service tax of Rs 30,172/- on the taxable value of Rs 462239.00. As appellant was himself charging and collecting the service tax, even prior to 16.06.2005, the claim for deduction made by the appellant for deducting this value from the taxable value cannot be acceded to. 4.10 Thus the gross value of taxable service on which the demand of service tax is made, after allowing the deductions in respect of PF, Bonus and Service Tax paid by M/s Hindalco, as per the chart submitted by the appellant comes to Rs 63,90,554.77/- (Rs 1,77,87,709.00 - Rs 15,16,602.00 - Rs 10,45,027.23 - Rs 88,35,525). The demand has been made by taking table value of Rs 64,41,735/-. We do not find much difference in the taxable value determined by the department for making the demand and the taxable value that can be determined on the basis of t....
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....observed as follows: "18. Doubtless, the principle of res judicata is a fundamental doctrine of law that there must be an end to litigation. [See Daryao v. The State of U.P. 1962 (1) SCR 574] but the plea of res judicata has to be specifically and expressly raised. [See : Medapati Surayya v. Tondapu Bala Gangadhara Ramakrishna Reddi - AIR (35) 1948 PC 3, 7]. This view has been recently reiterated in V. Rajeshwari v. T.C. Saravanabava - 2003 (10) Scale 768, where it is said that the foundation of the plea of res judicata must be laid in the pleadings. If this was not done, no party would be permitted to raise it for the first time at the stage of the appeal. The only exception to this requirement is when the issue of res judicata is in fact argued before the lower Court. In this case not only had the plea not been taken by the Revenue at any stage before any of the authorities, but arguments exactly to the contrary had been put forward by the respondent. We will not permit the plea to be raised now. ...." 4.14 The arguments being advanced by the appellant in the present appeal were foreclosed in terms of the submissions made by the appellant before the Adjudicating autho....
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....tory of this doctrine both in Hindu and Mohammedan jurisprudence as follows :- "In the Mitakshra (Book II, Chap. I, Section V, verse 5) one of the four kinds of effective answers to a suit is "a plea by former judgment" and in verse 10, Katyayana is quoted as laying down that "one against whom a judgment had formerly been given, if he bring forward the matter again, must be answered by a plea of Purva Nyaya or former judgment" (Macnaughten and Colebrooke's translation, page 22). The doctrine, however, seems to have been recognized much earlier in Hindu Jurisprudence, judging from the fact that both the Smriti Chandrika (Mysore Edition, pages 97-98) and the Virmitrodaya (Vidya-Sagar Edition, page 77) base the defence of Prang Nyaya (former decision) on the following text of the ancient law-giver Harita, who is believed by some Orientalists to have flourished in the 9th Century B.C. and whose Smriti is now extant only in fragments :- "The plaintiff should be non-suited if the defendant avers : „in this very affair, there was litigation between him and myself previously,' and it is found that the plaintiff had lost his case". There are texts of Prasara....
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.... 19. It is nobody's case that the appellant did not know the contents of FWA. From this it follows that it was open to the appellant to question, in the previous proceeding filed by it, that his land which was acquired was not included in the FWA. No reasonable explanation was offered by the appellant to indicate why he had not raised this issue. Therefore, in our judgment, such an issue cannot be raised in this proceeding in view of the doctrine of Constructive Res Judicata. 20. It may be noted in this context that while applying the principles of Res Judicata the Court should not be hampered by any technical rules of interpretation. It has been very categorically opined by Sir Lawrence Jenkins that "the application of the rule by Courts in India should be influenced by no technical considerations of form but by matter of substance within the limits allowed by law". [See Sheoparsan Singh v. Rammanandan Prasad Singh, (1916) 1 I.L.R. 43 Cal. 694 at page 706 (P.C.)]. 21. Therefore, any proceeding which has been initiated in breach of the principle of Res Judicata is prima-facie a proceeding which has been initiated in abuse of the process of Court. 22. A ....
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.... the parties might and ought to have litigated and have had decided as incidental to or essentially connected with subject matter of the litigation and every matter coming into the legitimate purview of the original action both in respect of the matters of claim and defence. Thus, the principle of constructive res judicata underlying Explanation IV of Section 11 of the Code of Civil Procedure was applied to writ case. We, accordingly hold that the writ case is fit to be dismissed on the ground of res judicata." 27. In view of such authoritative pronouncement of the Constitution Bench of this Court, there can be no doubt that the principles of Constructive Res Judicata, as explained in explanation IV to Section 11 of the CPC, are also applicable to writ petitions." 4.15 Hon'ble Supreme Court has in the case of M J exports [2015 (325) E.L.T. 216 (S.C.)] held as follows : "11. Mr. K. Radhakrishnan, learned senior counsel appearing for the Department, has drawn our attention to the Order dated 2-8-2004 which was passed in Writ Petition No. 1278 of 2004. His submission was that in the earlier round of litigation before the High Court when the demand of interest was ....