TaxTMI 
TaxTMI 
2024 (7) TMI 690
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....) on behalf of the investors/clients as well. The Appellant also engages in such sale and purchase in its own PRO account. 1.4. In lieu of the services provided to the investors/ clients, the Appellant charges brokerage/commission from the investors. On the said brokerage/commission charged by the Appellant, the Appellant is duly discharging Service Tax. Stock Exchanges Service charges collected by the NSE. 1.5. Further, the NSE provides various services to the investors and against the services provided, NSE collects charges from the investors through the Appellant. The said charges are in the shape of turnover charges which are based on the total business of sale and purchase of the Appellant. On the aforesaid charges, NSE also recovers Service Tax from the Appellant under the category of 'Stock Exchange Service'. 1.6. Accordingly, the NSE raises monthly invoices on the Appellant on the basis of the monthly turnover of the Appellant and collects Service Tax on the same. However, the invoices raised by the NSE do not contain the breakup of the turnover pertaining to the sale and purchase carried by the Appellant on behalf of the investors/ clients and on behalf of....
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..... In response to the above Show Cause Notice, the Appellant furnished a reply vide letter dinted 22.07.2014 wherein it was submitted that since, the entire amount had already been paid by the Appellant with appropriate interest, no Show Cause Notice should have been issued in terms of Section 73(3) of the Finance Act, 1994. 1.15. Further, the Appellant made detailed submissions stating that it has correctly availed Cenavt Credit and that it was under the bonafide belief that it was eligible to avail Cenvat Credit. 1.16. The above Show Cause Notice was adjudicated upon by the Ld. Commissioner of Service Tax, Ahmedabad (hereinafter referred to as "the Ld. Commissioner"). The Ld. Commissioner confirmed the the demand of cenvat credit, Interest and proposed penalty vide Order-in-Original No. AHM-SVTAX-000-COM-015-14-15 dated 26.08.2014 (hereinafter referred to as the "Impugned Order"). However, the demand and interest already paid by the Appellant were appropriated by the Ld. Commissioner against the proposed demand and interest amounts. 1.17. The Ld. Commissioner recorded that since, there was suppression of facts and wilful misstatement with regard to availment and utilizati....
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....he Appellant because the Appellant is not an expert and merely because the tax paid is self-assessed does not mean that in case of any short- payment by the Appellant, the Department can allege suppression of facts. It is the Department's obligation to conduct deep scrutiny of the Returns. As per Para 1.2.1 of the Manual for Scrutiny of Service Tax Returns, the CEBC has clarified that the purpose of detailed scrutiny includes ensuring the correctness of the Cenvat Credit on input, capital goods and input services in terms of the Cenvat Credit Rules, 2004. A.6. Further, similar finding was given by the Hon'ble Chandigarh Tribunal in case of CCE & ST v. M/s. Himachal Futuristic Communication Ltd., 2023-VIL-1245-CESTAT-CHD- ST. A.7. Therefore, in view of the above decisions, it is submitted that no allegation of suppression of facts with the intention to evade tax can be made in the present case and accordingly, it is submitted that the Department has erred invoking Section 73(4) of the Act. A.8. Further, since the payment of Cenvat Credit along with interest has already been made before issuance of the Show Cause Notice, the benefit of Section 73(3)....
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.... services. Further, Rule 3(4) of the said Rules provides that the Cenvat Credit may be utilized for payment of excise duty on final products or service tax on any output service. B.4. It is submitted that the as per the definition of the term 'input service' as defined under Rule 2(1) of the Rules, 'input service' includes 'activities relating to business' provided it is received by the provider of output service. In the instant case, the services received from NSE have been used in relation to the business of the Appellant company. Thus, the definition of the 'input service' is very wide, it not only includes the services used in providing output service but, also includes the services used in relation to the business. B.5. Hence, all the services used for the purposes of business and are necessary for the Appellant's business; therefore, it cannot be disputed that the services were not input service. On this ground alone, the Impugned Order is liable to be set aside. C.1. It is submitted that the Explanation added to the definition of 'exempted service' on 01.04.2011, wherein it has been stated that the exempt....
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....overed by the definition of input services, in that event their liability to reverse the credit should be determined in terms of clause (c) to Explanation 1 after Rule 6(3D), even though the said explanation is introduced w.e.f. 1.4.2011. The said explanation has been introduced with effect from 1.4.2011 keeping in view the fact that in trading, the value addition by the Appellant is only the difference between the sale and purchase price of the goods. Within this difference, the Appellant has to incur all expenditures relating to marketing, sales, transportation, servicing etc. and also make profit and the said explanation is very well-thought of principle and the same should be applied for calculating their liability right from 2005 onwards. The said explanation should be given retrospective effect, since this is only procedural and is not substantive. In support of the same, reliance is placed on the decision judgment in the case of Commissioner of Central Excise & Customs vs First National Bank of Chicago, Judgment of the Court (Fifth Chamber) dated 14.7.1998 in Case C-172/96 and Commissioner of Wealth v. Sharvan Kumar Swarup & Sons (1994) 6 SCC 623). C.6. Further, the....
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....to maintain separate accounts and to follow any of the two options available under Rule 6(3) then he had to follow the said option in respect of all the exempted service provided by him. Explanation-II to Rule 6(3) provided that the credit on input services exclusively used in or in relation to provision of exempted service shall not be allowed. D.5. Accordingly, as per Rule 6, a restriction has been imposed on availment of Cenvat Credit. However, if the finding given by the Ld. Commissioner that provisions of Rule 6 are not applicable to the present case is correct, then there would be no case of the Department and the Appellant would be eligible to take Credit without any restrictions. D.6. Therefore, if provisions of Rule 6 are not applicable to the facts of the present case, then there cannot be any prohibition on availment of Cenvat Credit. Therefore, on this ground alone, the Impugned Order is liable to be set aside. E.1. It is submitted that there is no provision in the Rules, 2004 which even remotely allows denial of credit of service paid on inputs services used in relation to sale and purchase activities. Further, Rule 6(1) only deals w....
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....s no statutory obligation that the Appellant is liable to intimate the Department that it has been availing credit of the service tax paid by it on the input services. The Appellant had declared the details of credit taken by it on various input services during the period in dispute in compliance with the statutory requirement of filing monthly return. There is no other provision requiring the Appellant to declare credit taken on service tax paid on input services. G.2. Non-disclosure of a fact, which is not statutorily required to be disclosed, does not amount to mis-declaration or suppression of facts. Hence, the extended period of limitation cannot be invoked. G.3. Further, it is submitted that the onus is on the Department to prove that the Appellant has wilfully suppressed the facts with the intention to evade payment of duty; however, the Show Cause Notice failed to prove any mala fide intent on the part of the Appellant. G.4. Without prejudice to the above submissions, every suppression of fact or omission is not sufficient to invoke larger period of limitation. Only wilful suppression with an intention to evade payment of duty will enable the Reve....