TaxTMI 
TaxTMI 
2024 (8) TMI 396
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....nt of Rs. 2,51,10,673/- towards Service Tax leviable for provision of - "Transportation of goods through pipeline/conduit service" and "Erection, Commissioning & Installation Services", was issued to the appellant. In addition it also proposed recovery of inadmissible Cenvat Credit amounting to Rs. 2,97,617/- availed by the noticee during 2010-11 and 2011-12. Demand for interest and penal provisions were also invoked in the said show cause notice. As per the said show cause notice the taxable value and service tax recoverable, are indicated category-wise in the following table : (Amounts in Rupees) Category Received amt. Taxable Value Service Tax A Advance Received against Transmission Charges from Tea Estate and other consumers 37580200 37580200 4077945 B Fuel Surcharge 16012999 16012999 1699598 C Minimum Demand Charge (MDC) 135784718 135784718 14794332 D Advance Received against Transmission Charges from PWD & APGCL 12681286 12681286 1306172 E Amt. Received against cost of Gas Meter and Installation Charges 26196440 8644825 950633 F Amt. against cost of Meter and Installation Charges r....
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....nt) per annum for the above deposited amount. " 3. As can be noted from the above reproduced clause of the contract, the amount is by way of deposit carrying interest @ 3% and refundable at the time of termination of the contract. It is also noticed that the same is also meant as a cushion and can be adjusted against the outstandings of the contracted party in case of any short payment thereto. In support of their contention, the appellant have also enclosed evidence, by way of records/returns indicating refund of the amount on termination of the contract on account of above. The said amount is duly reflected in the balance sheet and ledger account of the appellant with details of interest paid etc.. We note that it is settled proposition of law that such interest bearing deposit cannot be considered as part of service and leviable to service tax. We are of the view that any interest accrued (or notional) on such sums by way of a security advance, cannot form part of the value of a taxable service rendered. The of the Hon'ble Apex Court in the case of MORIROKU UT INDIA (P) LTD. vs. State of U.P. [2008 (224) E.L.T. 365 (SC)], is squarely to this legal proposition. Moreover, such ....
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....stomers, when the total consumption of gas uptake, irrespective of the calorific value thereof, falls below the contractual terms. We note that upon failure of the customer to derive, more than the contractual quantity i.e. 90%, through pipeline, in the circumstances is by way of a penalty charged on the customer for failure in meeting the contractual obligation. The amount thus received by the appellant by way of penalty can by no stretch be termed as provision of any service. Thus, respectfully following the precedent decision, we are of the view that no Service Tax is leviable this count. We allow the appeal to this extent. (d) Advance Received against Transmission Charges from PWD & APGCL. 6. The appellant submits that the work involved therein was with reference to erection, commission and installation of the pipeline and the appellant has paid Service Tax on 33% of the total amount of Rs. 4,30,972/- received, in terms of Notification No. 1/2006-ST dated 01.03.2006. The appellant submits that challan thereof was produced before the lower authorities. However, the lower authorities failed to take note thereof. In view of the demand already having been paid appropriately b....
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....and therefore allowed. 11. The appellant has also raised the plea of limitation in the matter. However, since we have already concluded our findings on the merits of each of the various category of issues on which Service Tax was demanded we strongly feel that the question of limitation therefore now remains to be of only academic interest. However, at the same time we would hasten to add that we do not find anything on record that would substantiate the department's charge of suppression of material facts from the department with intent to evade payment of Service Tax or of misstatement of the value of the taxable services. We thus are of the view that the matter did not call for invocation of extended period at all. It is on record that the DGCEI authorities had sourced all information and records from the appellant way back in 2004 under summons seeking from them their written profile and disclosing the nature of business activities carried out along with the requisite records of the case. Hence we hold that the confirmed demand for the extended period is time barred. 12. As far the second show cause notice dated 01.04.2014, demanding service tax for the period April, 2012....