AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1040
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....he said amount from the party under the provisions of Section 73(1) of the Finance Act, 1994 by applying the provisions of extended period; (b) I also confirm the demand of interest due on the aforesaid amount of Rs.1,65,88,643/-, and order for recovery of the same from the aforesaid party under the provisions of Section 75 of the Finance Act, 1994; (c) I confirm the demand of irregularly availed Cenvat Credit of Service Tax amounting to Rs.37,10,373/- (Rupees Thirty Seven Lakhs, Ten Thousand, Three Hundred Seventy Three only) (inclusive of Education Cess & Secondary & Higher Education Cess), and order for recovery of the said amount from the party under the provisions of Rule 14 of the Cenvat Credit Rules, 2004. (d) I also confirm the demand of interest due on the aforesaid amount of Rs.37,10,373/-, and order for recovery of the same from the aforesaid party under the provisions of Rule 14 of the Cenvat Credit Rules, 2004. (e) I also impose a penalty of Rs. 10,000/- (Ten Thousand only) under Section 77 (1)(a) of the Finance Act, 1994, for the afore-mentioned contraventions. (f) I also impose a penalty of Rs. 10,000/- (Ten Thousand only)....
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....gating agency alongwith their letter dated 09.12.2013. 2.3 After scrutiny of records, it was observed that the major income of the appellant was in from Renting of Commercial Property, Common Area Maintenance Charges and Power Supply Charges. Appellants were not charging service tax on the bills issued for rent of M/s Future Value Retail Ltd. and M/s Cinemax India Ltd., but they were affixing a stamp on the face of it which reads as 'service tax, if applicable, it will be charged separately'. These two are the major clients with whom appellants have rent agreement. 2.4 It was observe that during the period October, 2011 to March, 2012 appellants have shown Rs.2,03,74,068/- towards rent, which has been shown as exempted income and no service tax being paid thereon. Appellants were received rent of Rs.15,88,978/- per month to M/s Future Value Retail Ltd. (earlier M/s Pantaloon Retail India Ltd.) and Rs.12,77,040/- per month to M/s Cinemax India Ltd. Though appellants were regularly issuing bills to M/s Cinemax India Ltd. and M/s Future Value Retail Ltd. and receiving amount towards rent but no service tax has been charged and paid thereon and paying the same to government. It w....
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....ey failed to pay appropriate Service Tax on the value of taxable services rendered by them. iii. Section 69 of the Finance Act, 1994 inasmuch as they failed to obtain registration for all the taxable services provided by them. iv. Section 70 of the Finance Act, 1994 read with Rule 7 of Service Tax Rules, 1994 inasmuch as they failed to assess the tax due on the service provided by them and failed to furnish periodical return of the proper amount and in a prescribed manner to the Superintendent of Central Excise." 2.9 A show cause notice dated 20.07.2014 was issued to the appellant asking them to show cause as to why- i. Service Tax amounting to Rs.1,65,88,643/- (Rupees one crore sixty five lakhs eighty eight thousand six hundred and forty three only) (inclusive of Service Tax amounting to Rs.1,61,05,478/- Education Cess amounting to Rs.3,32,111/- & Secondary & Higher Education Cess amounting to Rs.1,61,054/-) (Details are as per annexure- 1 to 5) not paid by them should not be demanded and recovered from them under the proviso to Section 73(1) of the Finance Act, 1994; ii. Interest at the appropriate rate should not be charged and recovered fr....
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.... Cause Notice. • It is well settled law that no prosecutor can be allowed or permitted to say that the defence should be raised in accordance with the directions of the department. Once a person feels that his defence would be founded on the number of the documents, facts, circumstances and the legal provisions, the department cannot press its foot to crush the legal defences or the documentary defences available to a noticee. It is fully the choice of a noticee to raise all defences which are available to him under the law and the right of the department/ authority would only be to consider the defences and reject the same if the same are not in accordance with law or are based on mis-construction of the factual aspect or misconception of law. • A defence whether is genuine or misconceived whether is false or truthful cannot be decided before the defence is raised. It would be too much to say that a particular defence cannot be permitted to be raised because in the opinion of the department or its officers such defence may prove to be futile. • Once it is shown to the department or the department feels that the documents are not required by t....
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....elied upon in the show cause notice], they repeatedly referred the letter dt. 27- 10-2009 along with its Xerox Copy, than even without cross examination, even at any stage prior to the show cause notice, the Department of DGCEI did not say anything, now the conclusion and allegation as drawn in Paragraph No. 11 of the show cause notice is absolutely unreasonable and incorrect. • Reliance was also placed on Paragraph No. 12 of the show cause notice. Further, the Assistant Commissioner (Prev.), Central Excise, Kanpur vide letter No.1709 dated 10.09.2013 forwarded the statements of the staff posted in the dispatch Section of the Commissionerate office. Both the staff stated that neither the stamp was of their Section nor had they received the letters. • However, in the following correspondences/ the reference of the letter dt. 30-07-2012 was specifically given;- (a) Summon vide F. No. DGCEI/KRU/INT/25/12/79 dt. 30-01-2013 duly replied on 08-02-2013; (b) Summon vide F. No. DGCEI/KRU/INT/25/12/131 dt 15-02-2013 which was replied on 25-02-2013 with Xerox Copy of entire set of documents with reply of Summon dt. 08-02-2013; (c) Summon vi....
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.... on parking, Service Tax has been imposed w.e.f. April 1, 2013 due to amendment in Notification No. 25/2012 ST. and they have already paid the tax from 1-4-2013 so the demand given under Annexure IV is absolutely invalid and incorrect so the same is liable to be set - aside. • The demand in Annexure V is in regard to various items on which they have already paid tax by including the same in rent. In this regard, a statement duly certified by the Chartered Accountant was enclosed. In other words, the demand under Annexure V is also incorrect so the same is liable to be withdrawn. • And at the end, for the disallowance of CENVAT Credit, the party referred to its letter dated 30-07-2012, and submitted that the demand is absolutely incorrect. It is time barred also. PERSONAL HEARING 47. Three opportunities of Personal Hearing were given to the party, as provided in the law, vide letters dated 18.06.2014, 02.09.2014 and 10.09.2014, but none appeared on behalf of the party." 4.3 Further, in para no.51 onwards, impugned order records as follows:- "51. I have gone through the case file, and I observe that show cause notice dated 27.01....
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.... the plea that the department did not provide the necessary documents to them. 53. I observe that the party is simply harping on the minor issue of return of Non- RUDs to them, when they are in possession of all such documents on the basis of which charges of evasion of Service Tax have been framed against them. I also observe that instead of concentrating on submitting the reply to the charges framed by the department, the party repeatedly kept on requesting for documents of hardly any evidentiary value. In these circumstances as narrated above, I am of the view that the revenue has tried its level best to follow the doctrine of natural justice and awarded the sufficient opportunities to the party to represent their case, but the party is in a habit not to cooperate with the revenue. Since the principles of natural justice have been followed and sufficient opportunities have been given to the party, which the party failed to avail, I am, therefore, left with no other option but to proceed to decide the case on the basis of the interim reply of the party vis-à-vis the provisions of the law. 54. I have gone through the allegations made against the party, the....
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....emises). Later on the Hon'ble Court in its order dated 23-9-2011 in case of Home Solution Retail India Ltd. v. Union of India [2011(09) LCX0002] upheld the retrospective amendment. Subsequently the matter was challenged before the Hon'ble Supreme Court and Hon'ble Supreme Court has passed an interim order. From the above, it was clear that the Court had not issued any stay on payment of Service Tax on Renting of Immovable property, and appropriate Service Tax was payable by the party at the appropriate time, as provided in the Finance Act, 1994, and the Rules made there under." 4.5 We find that the above observations made in the impugned order to the effect that Hon'ble Supreme Court has in the case of Retailers Association of India v. Union of India - 2012 (26) S.T.R. J96 (S.C.) have observed as follows:- "The learned Additional Solicitor General prays for time to file counter affidavit on behalf of the respondents. Let the needful be done within four weeks. Rejoinder affidavit, if necessary, may be filed within two weeks thereafter. Having regard to the issue and revenue involved, we expedite the hearing of the appeals. C.A. No. 8390/2011....
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..... v. Union of India & Ors. Having heard learned counsel for the parties on the question of stay with regard to the arrears of service tax due from the appellants prior to 30th September, 2011, we direct as follows : (i) all the appellants in each of the appeals, who are before us, shall deposit with the concerned department 50% of the arrears towards the said tax within six months in three equated instalments, on or before 1st November, 2011; 1st January 2012 and 1st March, 2012; (ii) for the balance 50% each of the appellant in these appeals shall furnish a solvent surety to the satisfaction of the jurisdictional Commissioner; (iii) they shall file affidavits in this Court, within four weeks from today undertaking to pay the balance arrears of service tax, stayed in terms of this order, as may be directed by this Court at the time of final disposal of the appeals and (iv) the successful party in these appeals shall be entitled to interest on the amount stayed by this Court at such rate as may be directed at the time of final disposal of the appeals. It is clarified that this interim order shall apply only in the case of the appellants who shall file the ....
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....t is absolutely necessary for the person raising such plea to make the same good by producing sufficient evidence in support of such plea. Undisputedly, the appellants did not produce any such evidence in support of such plea." In such a scenario, the department has no option but to confirm the demand against the party. 63. 1, therefore, hold that the party had provided the service of "Renting of Immovable Property" as defined under clause (90a) of Section 65 of the Finance Act, 1994 read with Section 65(105)(zzzz) of the Finance Act, 1994 upto the period 01.06.2012. In view of the fact that since the introduction of negative list w.e.f. 01.07.2012, 'Renting of Immovable Property Service' has become a declared service under clause (a) of Section 66E of the Finance Act, 1994; I hold that the party has short paid Service Tax on account of providing aforementioned taxable services to the tune of Rs.59,85,924/- (including Education Cess and SHE Cess) (Annexure-I) for the period June, 2009 to September, 2013 under the proviso to Section 73(1) of the Finance Act, 1994." 4.7 In respect of demand of service tax made in the Common Area Maintenance Charges, Commissioner h....
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....rtake management, maintenance and repairs of the shared areas and common facilities in the building complex. In these circumstances, as per the aforesaid statutory provisions of the Finance Act, 1994 and the view taken by the Hon'ble Tribunal in the case of U.G. Sugar & Industries Ltd. Versus CCE, Meerut-II [2011 (266) E.L.T. 339 (Tri. Del.)] supra, I hold that the said activities of the party appears to be appropriately covered under the Management, Maintenance or Repair service till 30.06.2012 and under 'service' since 01.07.2012, as the same is not covered under the negative list. 70. I, therefore, hold that the party is liable for payment of Service Tax on account of the service of 'Management, Maintenance or Repair Services' as provided under Section 65(64) of the Finance Act, 1994 read with Section 65(105) (zzg) of the Finance Act, 1994 upto 01.06.2012, and providing taxable services even after 01.07.0212, as such services are neither covered in the negative list nor are they exempted services, to the tune of Rs.23,37,782/- (including Education Cess and SHE Cess) (Annexure-II) under the proviso to Section 73(1) of the Finance Act, 1994." 4.8 In....
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....the value for the purpose of charging service tax on the said service. (2) Subject to the provisions of sub-rule (1), the expenditure or costs incurred by the service provider as a pure agent of the recipient of service, shall be excluded from the value of the taxable service if all the following conditions are satisfied, namely:- (i) the service provider acts as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured; (ii) the recipient of service receives and uses the goods or services so procured by the service provider in his capacity as pure agent of the recipient of service; (iii) the recipient of service is liable to make payment to the third party, (iv) the recipient of service authorises the service provider to make payment on his behalf, (v) the recipient of service knows that the goods and services for which payment has been made by the service provider shall be provided by the third party; (vi) the payment made by the service provider on behalf of the recipient of service has been separately indicated in the invoice issued by the service provider to th....
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....prove that such charges had been recovered from each one of their tenants on "no profit, no loss" basis, for further remitting it to the electricity department. However, it appears that no such exercise was undertaken by the party. 78. In absence of any evidences put-forth by the party, I have no option but to hold that the party is liable for payment of Service Tax on account of the 'Business Support Services' as provided under Section 65(105) (zzzq) of the Finance Act, 1994 upto 01.06.2012, and providing taxable services even after 01.07.0212, as such services are neither covered in the negative list nor are they exempted services, to the tune of Rs.80,08,193/- (including Education Cess and SHE Cess) (Annexure-III) under the proviso to Section 73(1) of the Finance Act, 1994." 4.9 On parking charges Commissioner in the impugned order observed as follows:- "79. Now, coming to demand proposed in the Annexure-IV to the show cause notice, I observe that on scrutiny of the Profit & Loss account of the party for the financial year 2012-13, it was noticed that the party had received income from parking of vehicles. The department was of the view that th....
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....he tune of Rs.2,32,642/- (including Education Cess and SHE Cess) (Annexure-IV) under the proviso to Section 73(1) of the Finance Act, 1994." 4.10 In respect of the services such as Business Exhibition Service and Event Management Service, appellant claimed by the impugned order that they have charged service tax under the category of Renting of Immovable Property Services. However, the contention of the revenue is that these services are appropriately classifiable under the category of Business Exhibition Service and Event Management Service, in which category they have not paid service tax. Commissioner in the impugned order observed as follows:- "90. In the instant case, it is on record that the party had issued bills for duration of less than one month to various companies in lieu of the services provided by them in respect of business exhibition and event management. The activities carried out by the party involved hiring out their premises for exhibition and extending other facilities such as uninterrupted electricity, parking, toilets etc. Such events were intended for marketing, promotion or advertisement of products or services for growth in respective businesse....
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....ust, 2007, after Reference Code 086.05/23-8-07, the following Reference Code and corresponding issue and clarification shall be inserted, namely :- Reference Code Issue Clarification (1) (2) (3) 096.01/4-1-08 Commercial or industrial construction service [section 65(105)(zzq)] or works contract service [section 65(105)(zzzza)] is used for construction of an immovable property. Renting of an immovable property is leviable to service tax [section 65(105)(zzzz)]. Whether or not, commercial or industrial construction service or works contract service used for construction of an immovable property, could be treated as input service for the output service namely renting of immovable property service under the Cenvat Credit Rules, 2004? Right to use immovable property is leviable to service tax under renting of immovable property service. Commercial or industrial construction service or works contract service is an input service for the output namely immovable property. Immovable property is neither subjected to central excise duty nor to service tax. Input credit of service tax can be taken only if the output is a 'service' liable to service tax or a &#....
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..... 4.14 We also find that the case of the appellant was not considered on the basis of the documents and other evidences which were available at the time of investigation and adjudication, even efforts has not been made to reconcile the figures of ST-3 returns with the balance sheet. When we examine the figures of balance sheet alongwith ST-3 returns on sample basis, we find that most of the amounts due have been paid. However, we not recording any finding in the matter on that point, as the matter needs to be reconsideration by the Original Authority, for arriving at finding in respect of each of annexures on the basis of proper analysis of the figures in the balance sheet and the ST-3 return. The exercise which have been done in the chart reproduced above, it shows that there may be some variation in the category of services against which service tax has been discharged and demanded in the show cause notice but it is not correct to say that the service tax has not been paid against the said services. Even Board have clarified that change in the classifiable services should not be lead another demand being made but the service tax paid under one category should have been adjuste....