TaxTMI 
TaxTMI 
2024 (10) TMI 383
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....e incurred on account of import of service reported in the financials was higher than that reported in ST-3 returns due to the fact that certain transactions were not taken into account while arriving at the taxable value. This resulted in a short-payment of service tax of Rs.7,45,771/- under reverse charge mechanism (RCM). It was also noticed that the appellant had not paid service tax to the extent of Rs.3,750/- on expenditure incurred towards cafeteria charges viz. the license fee paid to the Revenue Department, Government of Tamil Nadu for running such cafeteria. On the discrepancies being pointed out, the appellant paid the service tax of Rs.7,49,521/- along with interest under the RCM on 31/07/2020. However, they did not pay penalty and so they were issued a Show Cause Notice dated 18.12.2020 seeking to impose equal penalty under sec. 78 of the Finance Act, 1994 for failure to pay service tax for reasons of fraud etc. After due process of law, the learned Original Authority rejected the refund claim and held that the appellant was liable for penalty under sec. 78 of the Finance Act, 1994. It was further held that the Service Tax paid by the claimant is not falling under the c....
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....d. 3.2 The learned Authorized Representative reiterated the findings of the lower authorities. She relied on the decision of the Hon'ble High Court of Jharkhand in the case of Rungta Mines Ltd. Vs. CGST & CE, Jamshedpur reported in (2022) 1 Centax 151 (Jhar.) and prayed that the appeal may be rejected. 4. I have heard both sides. The relevant portion of Rule 9 is reproduced below for easy reference; "RULE 9. Documents and accounts. (1) The CENVAT credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely: . . . . . (bb) a supplementary invoice, bill or challan issued by a provider of output service, in terms of the provisions of Service Tax Rules, 1994 except where the additional amount of tax became recoverable from the provider of service on account of non-levy or non- payment or short-levy or short-payment by reason of fraud or collusion or wilful mis statement or suppression of facts or contravention of any of the provisions of the Finance Act or of the rules made thereunder with the intent to evade payment of service tax . . . . . . (e) a ....
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.... Rs.3,750/- on expenditure incurred towards cafeteria charges viz. the license fee paid to the Revenue Department, Government of Tamil Nadu for running such cafeteria, amounts to evasion of duty merits to be rejected. The imposition of penalty must hence be set aside. 6. As regards the issue of transition of credit, I find that the transition provisions contained under section 142(3) of CGST Act 2017 allows refund of any amount of CENVAT credit, duty, tax or interest paid under the existing law. As per section 140 of the GST Act, 2017, the appellant was eligible to transfer the amount as TRAN-1 credit. However, since the amount was paid on 31/07/2020 and the last date for availment as TRAN-1 credit was on 27/12/2017, the appellant was unable to carry forward the Cenvat Credit to the GST regime. The relevant portion of the miscellaneous provisions for transition of credit under GST Act under Section 142 reads as follows:- "Section 142 of GST Act 2017: Miscellaneous Transitional Provisions (CHAPTER XX- TRANSITIONAL PROVISIONS) (3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or an....
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...., CENVAT Credit could not be availed in the appellants books before 01.07.2017. However, once the credit is found eligible, it is to be refunded in cash. In such a situation the appellant is eligible for refund as per section 142 of CGST Act 2017. This legal position is also supported by the judgments cited by the appellant above. 8. Revenue has relied on the decision of the Hon'ble High Court of Jharkhand in the case of Rungta Mines Ltd. Vs. CGST & CE, Jamshedpur [(2022) 1 Centax 151 (Jhar.)]. The facts of the said case are that the petitioner was registered under Service tax only as a person liable to pay service tax under RCM. Admittedly, the "port services" involved in the case was not covered under RCM and therefore the same was not includable in the service tax return filed by the petitioner under ST-3. Accordingly, the petitioner was not entitled to avail credit of the impugned service tax paid on the "port services" in its service tax ST-3 return. The petitioner did not claim transitional credit in terms of section 140(1) of the CGST, Act and wrongly took credit of the impugned service tax in ST-3 return and thereafter claimed refund of the same by referring to section....