TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1269
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....cknow 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 within 30 days of the communication of this order in terms of first provis....
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....ice 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 under Rule 15 of Cenvat Credit Rules, 2004 read with Section 78 off the Act should not be imposed upon them." ....
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....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/- on account of amounts received inclusive of service tax resulting in excess demand of Rs 14,65,840/- being a new issue needs to be considered by the CESTAT. o Thus as per this reconciliation report prepared by the reven....
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....ervice 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 almost matching the amount quoted in the Annexure A-1 of the notice in respect of several half yearly periods. There are only minor variations in figures relating to certain other half yearly periods as tabulated hereinfra- Period Amt shown as realized (as per SCN) Amt collected as per Annexure 1 of the Noti....
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....not 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 taken for calculation of service tax liability, as under- Period Amt. shown as realized April 02 to Sept.02 5526082 Oct. 02 to March 03 11784942 April 03 to Sept. 03 3157761 Hence, the Noticee's assertion that the service tax liability was calculated on hypothetical figures is not correct and the real issue which emerges here in view of the above is whether the benefit of deduction in taxable value while calculating the service tax liability would be available to them especially in respect of the services rendered to the print media and services where servic....
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....here 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 agency for space and time in getting the advertisement published in the print media (i.e., newspapers, periodicals, etc) or the electronic media (Doordarshan, private TV channels, AIR, etc.) will not be includible in the value of taxable service for the purpose of levy of service tax. The commission received by the advertising agency would, however, be includible in the value of taxable service". As regards the amount at SI.No-(ii), the same would not be available to them in toto. They would be entitled for deduction in the value on the amounts charged from the print media for publishing news items and the Service Tax would be p....
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....2 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, the same is not acceptable as Annexure A-I to the notice is self explanatory, in which short payment has been calculated. This contain complete details such as respective period, amount of taxable value, rate applicable, service tax payable, service tax paid through GAR and paid through cenvat credit. Similarly the objection relating to rate of service tax is also ethereal as different rates applicable at the different period of time have been given in the chart and tax liability has been calculated accordingly and the Noticee have not furnished any evidence to substantiate their contention regarding the services during some prior period of time and therefore their objection that the rate applicable at the time of providing service has been ignored is not acceptable." 4.3 When the matter was earlier listed, as noted above on 06.09.2010, the Bench had directed for reconciliation of discrepancy and the same w....
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....14020962.21 14003252.31 8893618 440087.72 438694.72 In this regard it shall be important to point cut that abatement on print media is admissible to the extent of 85% as per circular No.341/43/96-TRU dt. 31.10.1996 in the instant case the Hon'ble Commissioner has allowed abatement for the period April 2003 to September 2005 in respect of those invoices which were submitted by the appellants as sample invoice of print media vide their letter dt. 30.11.2009 addressed to Superintendent Service Tax Group-III, in connection with instant show cause notice. It is found that they have shown their abatement value with their ST-3 returns w.e.f. half year ending Sept 04 on a separate, calculation sheet which they had enclosed with all ST-3 returns. Invoices on print media have been scrutinized with the calculation chart of the party and figures of ST-3s and the discrepancies noticed is shown in the chart as shown above. 2. The party's contention that the total amount of Rs.5,04,247.52 is on account of excess tax demand confirmed in respect of exempted services / sales is not correct as this pertains to the issue of taxability of services of sub-contractors and this issue has ....
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.... as service tax was correctly paid by them. However, the mistake in mentioning of taxable value of Service Tax is due to clerical error- and without any intention to evade tax thereon, which is non-intentional and due to ignorance as necessary explanations were filed with the department as soon as the mistake was traced by them. However; the party had not quantified the value of twice valuation due to clubbing of service tax with the taxable value in their representation dt. 02.12.2009. There is no reference of this issue in their any other letter/representation including letter dt 25.08.2008 and 29.11.2008 this issue has cropped up after passing of this OIO by the Commissioner. The half-yearly return wise excess value so accounted for against which the party has contested that the total amount of Rs.14,65,840/- is included in the confirmed demand of Rs.30,33,510/- is as under Period Amount of taxable value Amount of tax demanded in o-in-o. October 2004 to March 2004 Rs. 3,73,768/- Rs 38,125.25 April 2005 to September 2005 Rs. 17,45,823/- Rs. 1,78,073.95 October 2005 to March 2006 Rs. 26,66,247/- Rs 2,71,854.89 April 2007 to September 2007 Rs. 34,75,962/- Rs 4,28,99....
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....atement as claimed by the party i.e. Rs.14,02,0962.21 is correct. However, in the Order-in-Original abatement has been allowed to the extent of Rs.88,93,618/- resulting in confirmation of the demand of Rs.4,38,694.72. However, if the abatement claim as claimed by the party and verified by the officers is allowed. The net demand which is made on this account cannot survive and the same needs to be set aside, we do so. 4.5 On the issue with regards to the payment of service tax by the sub-contractor, when the main contractor has paid the entire tax liability the demand of Rs.5,04,247.52 has been confirmed. Officers have found that this amount is recoverable and appellants have contested the demand relying upon the decision of Larger Bench of this Tribunal in the M/s Melange Developers Pvt. Ltd. (supra) wherein the Larger Bench of this Tribunal has held that in the absence of any exemption granted subcontractor is required to discharge the tax liability, the service recipient i.e. the main contractor can avail the benefit of Cenvat credit. Accordingly, it is the view that has been canvassed by the department in the matter. The relevant paras of the decision are reproduced bellow:- ....
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.... according to this Circular where the services have been provided by the sub-contractors such sub-contractors are not liable to pay service tax and service tax liability is on the main contractor. Taking note of the fact of the contention that main contractor has paid the service tax and charging service tax on the sub-contractor again would amount to taxing the same service twice and also taking note of the circular cited by the learned advocate and the decisions of the Tribunal cited, I find that if the appellant is required to pay the service tax it would amount to taxing the same service twice and the circular and the Tribunal's decision are squarely applicable to the facts of this case and accordingly appeal is allowed with consequential relief to the appellant." 18. In BCC Developers and Promoters Pvt. Ltd. it was observed : "6.1 We agree with the submission of the Ld. Counsel that no double taxation is permissible under the law. The Constitution (Article 265) provides to take the exact amount of tax i.e. neither more nor less. In the instant case, if the principal has already paid the Service Tax, then the same cannot be demanded from the appellant. As per the clarific....
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....s, now need to be referred to. 23. In Max Tech Oil & Gas Services Pvt. Ltd. v. Commissioner of Service Tax, Delhi, reported in 2017 (52) S.T.R. 508 (Tri. - Del.), the Division Bench has held : "6. Regarding the contention of the appellant that they have acted only as a sub-contractor and demanding service tax from them will amount to double taxation as the main contractor also is rendering similar service to ONGC, we find no legal basis for the contention of the appellant. The service tax leviable at the hands of each service provider is decided by nature of activities undertaken by them. If the same is covered by scope of the taxable entry under Finance Act, 1994 tax liability arises. The said service becomes part of final service rendered by main contractor is of no consequence to determine the tax liability of each and every service provider. If at all, the service tax paid by a sub-contractor which becomes part of service further provided by the main contractor, the scheme of credit as envisaged by the Cenvat Credit Rules, 2004 will come into play subject to fulfilment of conditions therein. It is nobody's case that the subcontractors per se are not liable to service tax ....
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.... the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same. In other words, if the main stock broker is subjected to levy of service tax on the self same taxable service provided by sub-broker to the stock broker and the sub-broker has paid service tax on such service, the stock broker shall be entitled to the credit of service tax. Such a proposition finds support from the basic rule of Cenvat credit and service of a sub-broker may be input service provided for a stock-broker if there is integrity between the services. Therefore, tax paid by a sub-broker may not be denied to be set off against ultimate service tax liability of the stock broker if the stock broker is made liable to service tax for the self same transaction. Such set off depends on the facts and circumstances of each case and subject to verification of evidence as well as rules made under the law w.e.f. 10-9-2004. No set off is permissible prior to this date when sub-broker was not within the fold of law during that period." 27. The Commissioner did express in the impugned order that under the Cenvat Scheme every ....
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....e contractor can, as noticed above, take credit in the manner provided for in the Cenvat Credit Rules of 2004. 30. Thus, for all the reasons stated above, it is not possible to accept the contention of the Learned Counsel for the Respondent that a sub-contractor is not required to discharge Service Tax liability if the main contractor has discharged liability on the work assigned to the subcontractor. All decisions, including those referred to in this order, taking a contrary view stand overruled." 4.6 The submissions made by the appellant relying on this decision cannot be upheld as he argues contrary to what have been stated in the said decision. Appellant had relied upon the decision in the case of Vinodh Shipping Services (supra) to argue that the issue was of interpretational and there were conflicting views taken by the different fora. We are not in a position to agree with the said submission of the appellant, as he has not shown a single decision which was taken during the period in dispute. In the verification report officers have referred to Master Circular No.96/7/2007 dated 23.08.2007 wherein similar views has been taken. Hence, in absence of any contrary verificat....
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...., on which service tax liability has been discharged by the contractor Rs 5,04,247.52/- Rs 5,04,247.52/- C Non-consideration of payment of service tax through CENVAT while calculating amount of service tax paid Rs 3,52,356/- 0 D Application of rate of tax on the date of provision of services Rs 2,66,019/- 0 E Grossing up of taxable amount due to inadvertent mentioning of service tax with taxable value of services in some returns Rs.14,65,840.40/- 0 Rs 30,27,159/- Rs 5,04,247.52/- 4.11 In respect of wrong availment of Cenvat credit Commissioner has observed as follows:- 2. Wrong availment of Cenvat Credit It has been alleged that the Noticee have taken credit on the strength of certain invoices which do not contain the requisite details as prescribed under Rule 4(A) of the Rules and therefore these invoices are not in conformity with Rule 5 of Service Tax Credit Rules, 2002 and Rule 9 of the Cenvat Credit Rules, 2004, and therefore cenvat credit on such invoices would be inadmissible. The Noticee have denied the allegation and have stated that the cenvat credit has been utilized by them on the strength of documents conforming to the conditions of Rule 4(A), ....
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....les, 1994, as the case may be, are contained in the said document. Provided that if the aid document does not contain all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service, [assessable value, Central Excise or Service Tax registration number of the person issuing the invoice, as the case may be], name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit. Rule 9(9) The provider of out put service availing cenvat credit shall submit a half yearly return in the form, specified by Notification, by the Board the Superintendent of Central Excise by the end of the month following the particular quarter or half year. In this connection detailed enquiry and verification of invoices were carried out and the Assistant Commissioner, Central Excise Division-I, vide....
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....d consumption of the input service under Rule 9(6) of the Cenvat Credit Rules, 2004. It is imperative that the invoices must indicate the service tax registration no. alongwith Sl. No. of the invoice. This credit therefore is inadmissible. The excess credit of Rs 14,000/- taken by the noticee against the Invoice No.5212 and 3010 dated 07.07.2007 of M/s B.S.NL. would not be also available to them and the correct position regarding availability of the credit would be as under Eligible credit Ineligible credit Rs.8,31,382/- Rs.10,32,676/- - 14,000/- + 14,000/- Rs.8.17,382/- Rs 10,46,676/- The details of the credit to be allowed and to be disallowed are tabulated here as under:- No. of disputed invoices Amount alleged to be disallowed in the notice Amount found eligible for the credit after verification Amount liable to be disallowed 417 18,64,058.00 Rs.8,17,382/- Rs.10,46,676/- Further out of the inadmissible amount, the assessee has also taken credit on certain inv....
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....ssioner in the Order-in-Original, this proviso provides that if same details are missing also the credit should not have been disallowed subject to the satisfaction of the concern original officers. Tribunal in the case of Laxmi Organic Industries Ltd. (supra) has held that denial of credit in similar situation cannot be upheld. Going by the above decision and specifically the proviso to Rule 9(2), we do not find any merits in disallowance of the credit for the remaining amount of Rs.3,95,994/- wherein some other details also were missing and after causing due verification said details were not verifiable has been recorded in the impugned order. We do not find any merits in the contention raised by the appellant that they had submitted a detailed chart along with the miscellaneous application of 2010. It is not open to the appellant to bring in additional documents charts contrary to the verification that was made at the time of adjudication and these charts, on verification, has not been confirmed by the officers verifying the same. We do not find any merits in these submissions of the appellant. Accordingly, credit of Rs.3,95,994/- as disallowed is upheld. 4.13 For invoking the ....
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....ing 3 ST-3 returns have requested for condonation of delay which is a clear admission on their part that they have not disclosed the facts of their business and discharge of their tax liability to the Department. Non submission of ST-3 returns will tantamount to suppression of material facts from the Department. Further, as discussed supra the information supplied in the returns was found contrary to the facts and figures submitted by the assessee themselves in course of these proceedings. Important figures like amount realized etc. are found mis-reported in the ST - 3 returns alongwith inadmissible credit availed without exercising due precautions. I, therefore, hold that the Noticee has contravened the various provisions with the intention of evading the service tax due and invocation of extended period is rightly invoked in the show cause notice. In the following cases the Tribunals have held the conduct of non-filing of return can be termed as suppression - 1. Shri Ram overseas Finance Ltd. Vs. Commissioner 357(Tri. Chennai) 2007(6)STR- 2. Suprasesh GIS & Brokers Pvt. Ltd. Vs. Commissioner - 2009(13)STR- 641(Tri. Chennai) Hence the contention of the noticee is not m....