TaxTMI 
TaxTMI 
2023 (11) TMI 1269
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....383, Akarshan Complex, Vibhuti Khand, Gomti Nagar, Lucknow under Section 73(1) of the Finance Act, 1994 and direct them to pay the same forthwith alongwith interest as applicable as per Section 75 of the Finance Act, 1994. 2. I also confirm the amount of Rs. 10,46,676.00 (Rupees Ten Lacs Forty Six Thousand Six Hundred Seventy Six only) upon M/s Origin Advertising Pvt. Ltd., IInd Floor, 382-383, Akarshan Complex, Vibhuti Khand, Gomti Nagar, Lucknow for wrong availment of cenvat credit under Rule 14 of Cenvat Credit Rules, 2004 read with Section 73(1) of the Finance Act, 1994 and direct them to pay the same forthwith along with interest as applicable as per Section 75 of the Finance Act, 1994. 3. I drop the demand amounting to Rs.5,96,383.00 relating to short payment of Service Tax and Rs.8,17,382.00 relating to wrong availment of cenvat credit as the same was rot found sustainable under law. 4. I impose a penalty of Rs.40,80,186.00 (Rupees Forty Lacs Eighty Thousand One Hundred Eighty Six only) under Rule 15(4) of the Cenvat Credit Rules, read with Section 78 of the Finance Act, 1994. However, I give them the option to pay the amount alongwith interest wit....
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....prescribed under Rule 4 (A) of the Rules and no conformity with Rule 5 of Service Tax Credit Rules, 2002 read with Rule 9 of Cenvat Credit Rules, 2004 as amended from time to time. Cenvat credit on these invoices is not admissible. In respect of these invoices Cenvat credit amounting to Rs.18,64,058.00 was not admissible to them. 2.5 Show cause notice dated 05.02.2009 was issued to the appellant asking them to show cause as to why a. (i) The Service Tax amounting to Rs 36,29,893/- (Thirty six lakhs twenty nine thousand eight hundred and ninety three rupees only) should not be demanded and recovered from them under proviso to Section 73(1) of the Act. (ii) The interest at appropriate rate should not be recovered from them under Section 75 of the Act. (iii) The penalty under section 76 and 78 of the Act should not be imposed upon them. b. (i) The Cenvat Credit along with Education cess amounting to Rs. 18,64,058/- (Eighteen Lakhs Sixty Four Thousand and Fifty Eight only) should not be recovered from them along with applicable interest under Rule 6 of Service Tax Credit Rule 2002 and Rule 14 of Cenvat Credit Rules, 2004. (ii) The penalty....
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....¢ In the report submitted by the officers for resolving discrepancies following observations are made about the demands in dispute: o The appellant is entitled to abatement on print media to the extent of 85% as per Circular No 341/43/96- TRU dated 31.10.1996 and the same was allowed in OIO to the extent of sample invoices produced before the adjudicating authority. On scrutiny of all the invoices in dispute it is evident that appellant is entitled for further reduction of demand on this account by an amount o Rs 4,38,694.92/- against Rs 4,40,087.72 as claimed by the appellant. o Deduction of Rs 5,04,247.52/- from the demand at S No 2 claimed by the appellant is not admissible in terms of Master circular No 96/7/2007 dated 23.08.2007. o The fact of payment of service tax of Rs 87,606 + Rs 2,64,750/- = 3,52,356/- has not been taken into account in the OIO and the said amount has been included in the total demand confirmed. o Deduction from the demand to the extent of Rs 2,66,019/- needs to be applied because the rate of service tax for calculating the tax liability is to be on the date of provision of service. o Deduction of Rs 14,65,840....
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....341/43/96-TRU dt. 31.10.96 that the liability for payment of service tax has to be borne by the advertising agency on the amount not received is not relevant after amendment to Rule 6 of Service Tax Rules, w.e.f. 16.10.98 which reads as under: Rule 6: Payment of Service Tax "The service tax shall be paid to the credit of the Central Government by the 5th of the month immediately following the calendar month in which the payments are received, towards the value of taxable service..........." Hence the liability to pay service tax accrues only on the amount which has been received during the month. The Noticee have repeatedly contested that the Department has demanded service tax on the amounts which were never collected by them and no evidence was placed by the Department that the amounts as stated to be realized in the show cause notice has been in fact realized by them. They have also not given any lead to establish that the figures quoted in the SCN are not correct. They have, however, furnished the details of the amount realized by them in the Annexure 1 of their submission dated 28.02.09 and the amount shown as collected by them therein are a....
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....8791 4175435 603825 Oct 07 to Mar 08 40572816 4447282 41404955 4447282 857222 Total 263706305 24319035 251294382 24764172 8092105 Looking in to the table above, it is clear that since the amount shown as realized and the amount of service tax paid as shown in the ST - 3 for half yearly periods from April 02 to Sept. 03 are one and the same, it is abundantly clear that the realized amount has not been shown correctly by the Noticee in their ST - 3 returns as the amount of service tax paid in any case cannot be equal to the amount realized for the respective half yearly period. The rate of service tax during the relevant period is 5% and later 8% w.e.f. 14.05.2003. Hence, in respect of the said half yearly periods, the value for calculation of taxable liability is being taken as the amount shown in the notice. The Noticee have also admitted the same (the amount shown as realized in the notice) as amount collected during the respective half yearly periods in their Annexure 1 enclosed with their submission dated 28.02.09 and therefore the correct amount realized for the respective half yearly periods can be take....
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....all be liable to tax. This has also been clarified by the Board under Circular No. 341/43/96- TRU dated 31.10.96 and letter No. 332/4/2008 dt. 05.05.08. Hence they would be entitled for deduction in value on this account, and therefore they would be entitled for the benefit to the extent of the evidences furnished by them in this regard. In this connection a report was called from the jurisdictional Assistant Commissioner, Central Excise Division-I, Lucknow vide his letter C.No. 5-STC/EA-2000/Lko-1/06. According to him the facts on record as submitted by the Noticee, reveal the following: (i) The amount where service tax liability has been discharged by the principal contractor : Rs.8,42,740.00 (ii) The amount where services have been Rendered to the print media : Rs 23,69,654,00 As regards (i), the issue has already been discussed above and in view of the clear guidelines of the Master Circular, no relief can be granted to the Noticee. But the Department under instruction letter F.No.341/43/96-TRU dated 31.10.1999 has clarified regarding the deduction about print media as under- "the amount paid, excluding the own commission, by the advertising ....
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.... 02 to Mar 03 11784942 0 11784942 589247 222266 367021 April 03 to Sept 03 3157761 12806 3144955 251596 203474 48122 Oct 03 to Mar 04 10309589 80120 10229469 818358 706072 112286 April 04 to Sept 04 17717770 210032 17507738 1400619 1293591 107028 Oct 04 to Mar 05 22666564 41055 22625509 2307802 1757692 550110 April 05 to Sept 05 23585537 0 23585537 2405725 2098166 307559 Oct 05 to Mar 06 30534804 467500 30067304 3066865 2665245 401620 April 06 to Sept 06 30634827 4247405 26387422 2933335 2934213 -878 Oct 06 to Mar 07 36401545 2373653 34027892 4125790 4125762 28 April 07 to Sept 07 38038791 603825 37434966 4618182 4175435 442747 Oct 07 to Mar 08 41404955 857222 40547733 5003839 4447282 556557 Total 271763167 8893618 262869549 26839130 24764192 3033510 As regards the noticee's objection that they have not been provided the basis of computation of service tax, th....
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....atement allowed in OIO Difference in tax claimed by the party Difference in tax examined by the officers April 02 to Sept 02 778537.95 778537.95 0 38926.90 38926.90 Oct 02 to Mar 03 337588.55 337588.55 0 16879.43 16879.43 April 03 to Sept 03 216180.50 216180.50 12806 16269.96 16269.96 Oct 03 to Mar 04 909307.90 891598.00 80120 66335.03 64942.03 April 04 to Sept 04 280754.15 280754.15 210032 5657.77 5657.77 Oct 04 to Mar 05 486060.60 486060.60 41055 45390.57 45390.57 April 05 to Sept 05 1221990.06 1221990.06 0 124642.99 124642.99 Oct 05 to Mar 06 1739749.40 1739749.40 467500 129769.44 129769.44 April 06 to Sept 06 4240615.15 4240615.15 4247405 -755.03 -755.03 Oct 06 to Mar 07 2373674.55 2373674.55 2373653 -0.66 -0.66 April 07 to Sept 07 594798.55 594798.55 603825 -1113.86 -1113.86 Oct 07 to Mar 08 841704.85 841704.85 857222 -1914.82 -1914.82 Total 14020962.21 14003252.31 8893618 440087.72 438694.72 ....
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....iod is as under:- Period Difference in Tax due to exempt services Apr 02 to Sept'02 102381.8 Oct'02 to Mar'03 350016.2 Apr 03 to Sept'03 0 Oct '03 to Mar04 45950.64 April 04 to Sept'04 5898.88 Oct 04 to Mar 05 0 Apr 05 to Sept'05 0 Oct'05 to Mar'06 0 Apr 06 to Sept.'06 0 Oct '06 to Mar'07 0 Apr 07 to Sept.07 0 Oct '07 to Mar'08 0 Total 504247.52 3. Party's contention that in some cases the amount of collection includes the amount of service tax collected and by this way the tax has been calculated twice due to grossing up of amount which has resulted into an excess tax demand of Rs. 14,65,040. The party's contention that the details of these calculation mistake due to clubbing of service tax with value of taxable service realized was already communicated by them to the various authorities vide their letter dt. 25.08.2008, 29.11.2008 and 20.12.2009 is not fully correct as vide letter dt. 02.12.2009 they have merely pointed out that the amount of Service Tax as shown in service tax returns is correctly mentioned and all t....
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.... representation dt. 28 02.2009 against show cause notice dt. 05.02.2009. 5. Regarding point No.5 the party's contention regarding ignoring the payment of service tax of Rs. 87,606/- and Rs.2,64,750/- for the period April 2004 to Geptember 2004 and October 2004 to March 2005 respectively, appears quite correct as in Annexure - A-I of the show cause notice this amount of service lax has been shown to have been paid from cenvat credit in Annexure - A-1. However, Ih o-in-o this amount of Service Tax has not been taken into account rather treated it as non-payment and included this amount in the tolai confirmed demand of Rs, 30,33,510/-. This plea of the party can out rightly be considered for reducing the confirmed demand. So far as party's contention that no reason has been recorded in the original demand cum order for not allowing payment of cenvat credit is crystal clear. 6. Regarding disallowing of cenvat credit in o-in-o the party's contention that no evidence has been placed by the department, a list of such credits actually utilized monthwise by the party is enclosed as Annexure -A. This fulfills the requirement of the appellants as given in para 6 ....
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....pay Service Tax when the main contractor has actually discharged Service Tax liability, it would amount to 'Double Taxation', has to be examined. For this contention, reliance has been placed by the Learned Counsel for the Respondent on the following decisions of this Tribunal : (i) Urvi Construction v. Commissioner of Service Tax, Ahmedabad, reported in 2010 (17) STR 302 (Tri. - Ahmd.); (ii) BCC Developers and Promoters Pvt. Ltd. v. Commissioner of Central Excise, Jaipur, reported in 2017 (52) S.T.R. 22 (Tri. - Del.); (iii) M/s. Dhaneshra Engineering Works v. Commissioner of Central Excise, Allahabad, reported in 2018 (2) TMI 788 - CESTAT - Allahabad; (iv) Power Mech Projects Ltd. v. Commissioner of Customs, Guntur, reported in 2017 (48) S.T.R. 165 (Tri.- Hyd.); and (v) M/s. Edac Engg. Ltd. v. CST, Chennai, reported in 2017 (6) TMI 685 CESTAT Chennai. 17. In Urvi Construction a Learned Member of the Tribunal observed : "2. ................... Further the learned advocate also submits that in the Master Circular issued by the Board vide Circular No. 96/7/2007-S.T., dated 23-8-2007, a stand has been taken that there is n....
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.... when Service Tax has been paid by the main contractor, charging the sub¬contractor again will amount to taxing the same service twice. In the circumstances, the issue at hand also requires to be remanded to the adjudicating authority to verify whether the service rendered by the appellant has suffered tax in the hands of the principal contracts. If that aspect is able to be proved by the appellants, no tax liability will accrue to them. Towards this end, the adjudicating authority will give suitable opportunity to the appellants to present their case. Appellants are also produce all evidence and documents to establish their claim that the tax liability required to be discharged by them has already been paid up by the main contractor. If that is provided, their will obviously be no demand for interest unless such demands have been made belatedly. Once this aspect is also able to be proved by the appellant, imposition of penalty will also not arise." 21. The aforesaid decisions do not take into consideration the impact of the Cenvat Rules. It would, therefore, not be correct to conclude that double taxation would result if a sub-contractor is required to discharge the S....
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.... 619 (Tri. - Del.); and (iii) Sew Construction Ltd. v. Commissioner of Central Excise, Raipur, reported in 2011 (22) S.T.R. 666 (Tri. - Del.). 26. At this stage, it would also be useful to refer to a Larger Bench decision of the Tribunal in Vijay Sharma & Company v. CCE, Chandigarh, reported in 2010 (20) S.T.R. 309 (Tri. - LB). The issue that arose before the Larger Bench was as to whether service provided by a sub-broker are covered under the ambit of Service Tax and taxable or not. After noticing that a sub- contractor is liable to pay Service Tax, the Larger Bench examined as to whether this would result in double taxation if the main contractor has also paid Service Tax and observed that if service tax is paid by a sub-broker in respect of same taxable service provided by the stock broker, the stock broker is entitled to the credit of the tax so paid in view of the provisions of the Cenvat Credit Rules. The relevant paragraph 9 is reproduced below : "9. It is true that there is no provision under Finance Act, 1994 for double taxation. The scheme of service tax law suggest that it is a single point tax law without being a multiple taxation legislation. In absen....
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....hereof was assigned to the subcontractor who had submitted returns and paid taxes for the execution of the works contract. During the course of the assessment, the Appellant submitted that the sub-contractors had already been taxed and, therefore, the Appellant cannot be taxed again under Section 6B of the Karnataka Sales Tax Act. The submission, therefore, was that the value of the work entrusted to the sub-contractors could not be taken into account while computing the total turnover of the Appellant for the purpose of taxation under the Karnataka Sales Tax Act. It is in view of the provisions of the Karnataka Sales Tax Act that the Supreme Court observed that the value of the work entrusted to the sub-contractors or payments made to them shall not be taken into consideration while computing total turnover for the purposes of Section 6B of the Karnataka Sales Tax Act. This decision of the Supreme Court will not come to the aid of the Respondent in this case in view of the specific provisions of Section 66 and 68 of the Act as also the Cenvat Rules discussed in the foregoing paragraphs of this order. It also needs to be noted that there is no provision for input tax credit on deem....
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.... of taxation is a basic foundation for his correct application on rate of tax this demand made by application, incorrect rate of taxes needs to be set aside, we do so. 4.9 On the issue of grossing up this demand has been made by taking the taxable value as indicated in the claim for taxable value in the ST-3 returns. However, appellant has contested this demand stating that the amount of taxable value indicated in ST-3 returns advertently included the service tax also. Officers verifying the same agree to the contention raised by the appellant. However, they refuse to comment on admissibility of the same as this issue was not raised at the time of adjudication. We find merits in the contention raised and the benefit for computing the taxable values the service tax paid has to be detected from the gross value as per Section 67 (2) of the Finance Act, 1994. Thus the amount of Rs.14,65,840/- as determined by the officers in their report in respect of such clerical error needs to be deleted from the total demand as confirmed by Order-in-Original. 4.10 Thus we summarize our findings in respect of the demand of service tax made as per OIO and indicated in para 3.2 above in table be....
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....he case may be, a challan signed by such person or a person authorized by him in respect of such taxable service provided or to be provided and such invoice, bill or, as the case may be, challan shall be serially numbered and shall contain the following, namely:- (i) the name, address and the registration no. of such person (ii) the name and address of the person receiving taxable service. (iii) Description, classification and value of taxable service provided or to be provided, and (iv) The service tax payable thereon." The relevant sub-rule (1) and (4) of Rule 5 of the Service Tax Credit Rules, 2002 reads as under: (1) The service tax credit shall be availed on the basis of an invoice or bill or challan issued by the service provider of input service on or after 16th day of August 2002, indicating clearly the serial number of document, date of issue, description and value of the input service, the service tax paid/payable, service tax registration No. and address of input service provider. (2)....................................... (3)........................................ (4) The output service pr....
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.... 3. Credit amounting to Rs. 79,619.00 relating to invoices nos, 204,202,210, 222 and 232 have been taken repeatedly more than once. 4. Excess credit of Rs. 14,000.00 was taken by the noticee against invoice no 5212 & 3010 dated 07.02.07 of M/s BSNL. Thus, as per the AC's report, 114 Invoices involving Service Tax amounting to Rs.5,32,656/- and 15 Invoices pertaining to Central Excise duty amounting to Rs.2,99,226/- contained details relating to Registration etc. and therefore Cenvat Credit amounting to Rs.8,31,382.00 (532156+ 299266) in respect of the 114 and 15 invoices referred supra which contain the details of Service Tax and Central Excise Registration etc. would be available to the noticee as they conform to the requirement as laid down under the Rule 5(1) of Service Tax Credit Rules, 2002 and Rule 4(A) of Cenvat Credit Rules, 2004 read with Rule 9(2) ibid. The report also indicates that 94 Invoices involving Service Tax Registration amounting to Rs.6,36,682/- do not contain details of Registration and 194 Invoices involving Service Tax amounting to Rs.3,95,994/- are not identifiable and therefore credit would not be available in respect of....
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....same, therefore no penalty under Section 77 was proposed against them. 3. Delayed payment of service tax and delayed submission of ST-3 return It has been alleged that from April 2002 to March 2008, the Noticee has continued to make payment of service tax beyond the period of prescribed limit and also filed the ST-3 returns after the specified dates. As detailed in the notice there has been continued and consistent delay in submission of ST-3 returns beyond the specified date. The notice also mentions that although penalty under Section 77 of the Act is imposable on the noticee for late filing of ST-3 returns, the noticee have already deposited due penalty with reference to late filing of each ST-3 and therefore no penalty under Section 77 is being proposed. Hence the allegation on this count needs no further discussion. As regards delayed payment of service tax which attracts interest under Section 75 of the Act, the noticee vide their submission no. OA/228/0959 dt. 28.08.09 have stated that all the taxes due for the period has been deposited by them to the Government account alongwith the due interest. Hence liability to pay interest has been s....
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....x liability consciously with an intent to evade payment of the same. The Noticee have submitted that they are registered with service tax department w.e.f. 31.03.2000 and have been continuously filing Service Tax Returns and the Department has been also continuously undertaking Excise Audit of their books of accounts. The Department is fully aware about all the assessee and its business, no evidence has been placed by the Department that there has been any fraud, collusion, willful misstatement, suppression of facts, contravention of any provision or Rules made there under with intent to evade payment of service tax on their part and no such allegation is substantiated by the Department. In their subsequent submission dated 28.08.09 they have also made reference to the following cases in support of their defence: (1) M/s K.K. Nag Ltd., Vs. CCE dated 01.08.03 (2) M/s Elite Detectives Pvt. Ltd. Vs. Commr. of Service Tax dt. 13.9.06 (3) Margdarshi Marketing (P) Ltd. Vs. CCE dt. 09.02.07 In all the above cases the Tribunals have inter-alia held that invocation of the longer period is not justified if there is no evidence of suppression of fa....