TaxTMI 
TaxTMI 
2024 (6) TMI 1414
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....n the business of developing residential complex and have been selling residential flats during construction. They are also availing the CENVAT Credit as admissible in terms of CENVAT Credit Rules 2004. 2.2 During the course of the audit of the records of the Appellant, it was observed that; ♦ they had paid service tax on abated value while no abatement was admissible to them. ♦ they had not paid service tax on charges collected towards maintenance and repair service. ♦ they have wrongly availed Cenvat credit on input services on the basis of inadmissible invoices. ♦ they have not paid service tax on the amounts received towards supply of electricity through DG Set under the category of maintenance or repair services. 2.3 A Show Cause Notice [SCN] dated 17.03.2015 was issued for the period from October, 2011 to September, 2013 by invoking extended period of limitation. 2.4 Show Cause Notice dated 05.01.2016 was issued for the period from October, 2013 to March, 2015. 2.5 Lower authorities have confirmed the demand in both the cases as proposed in the SCNs. The breakup of demands in the two orders are as under: ....
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....might have done would not render it suppression. When the revenue invokes the extended period of limitation under Section 11 A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 12. As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned , they are clearly qualified by the words "willful", preceding the words "mis-statement or suppression of facts" which means with intend to evade duty. The next set of words "contravention of any of the provisions of this Act or Rules" are again qualified by the immediately following words "with intend to evade payment of duty". Therefore, there cannot be suppression or misstatement of fact, which is not willful and yet constitute a permissible ground for the purpose of the proviso to section 11 A. Mis-statement of fact must be willful." 4.4 In case of M/s Shervani Industries, Syndicate Ltd. reported in 2009 (14) S.T.R. 486 (Tri-Del....
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.... and utilized Cenvat credit. He also observed that the Appellants have paid only Rs. 44,22,221/- against availment of Cenvat credit of Rs. 48,03,944/- and that even if it is accepted that the amount of Rs. 3,67,778/- is towards input services exclusively related to repair services, the remaining amount comes to Rs. 44,36,106/- which was not debited by the Appellants. He also observed that another condition of Notification No. 01/2006 dated 01- 03-2006 was that the cost of land should be included in the gross amount charged. He examined one of the `Flat Buyer Agreement' and observed that land of the building has not been sold to the flat buy After making above observations, the learned Commissioner disallowed the abatement under Notification No. 01/2006 (supra) and confirmed the demand of Rs. 3,18,92,285/-. 4.7 The learned Counsel for the Appellants submitted that as per SCNs, Appellants had reversed the entire Cenvat credit of Rs. 44,22,221/- on input services. He referred to various case laws in support of its contention that once the credit had been reversed, the benefit of exemption under Notification No. 01/2006 dated 01-03-2006 c....
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....main issue as to whether the benefit of exemption under Notification No. 01/2006 dated 01-03-2006 in respect of construction of residential complex can be disallowed even if the Cenvat credit availed during the said period has been reversed alongwith interest and penalty. We find that there is no dispute that the Appellants had reversed the entire Cenvat credit relating to Construction of Residential Complex Service even before issuance of SCN. The Hon'ble Supreme Court in the case of Chandrapur Magnet Wires (Pvt.) Ltd. Vs. Collector of Central Excise reported in 1996 (81) E.L.T. 3 (S.C.) has held that debit entry in Modvat account indicates as if credit was not taken on such inputs. Para 6 & 7 of the judgement reads as under :- "6. It is true that the assessee has not maintained separate accounts or segregated the inputs utilised for manufacture of dutiable goods and duty free goods, as should have been done. The contention of the Department that in this situation, the assessee is not entitled to reverse the entries and get the benefit of the tax exemption is a question which merits serious consideration. There is no doubt that the assessee should have maintained sep....
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....o Minerals Water (Pvt.) Ltd. Vs. UOI reported in 2004 (174) E.L.T. 422, the Hon'ble Allahabad High Court held that reversal of modvat credit amounts to not taking of credit on inputs. Para 17 and Para 18 of the judgement reads as under :- "17. The question as to whether manufacturer can be treated as not having taken credit on the inputs used in the manufacture of final product, even though it was originally taken but subsequently reversed, has been decided by a five Member Bench of the Tribunal in the case of Franco Italian Company Pvt. v. CCE, 2000 (120) E.L.T. 792. The aforesaid five members Bench of the Tribunal after taking into account the ratio laid down by the Supreme Court in the case of Chandrapur Magnet Wire (P) Ltd. v. CC, Nagpur, 1996 (81) E.L.T. 3 has held as under :- "6. Drawing similar analogy we consider that subject to the reversal of Modvat credit taken with regard to the inputs which were utilised in the manufacture of duty free goods, the manufacturer could avail of the Modvat credit as well as full duty exemption under applicable small scale exemption notification with regard to some specified goods. Reference is answered accordingly. ....
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....y authorize to collect sale consideration and proportionate maintenance charges till formation of RWA from flat owne Except these charges, the builder is not authorized to collect any other amount. He also observed that as per the agreement, the builder in addition to consideration of flat would collect maintenance and repair charges. He therefore held that charges collected in the name of sinking fund are in fact charges for maintenance and repair of building. 4.15 The learned Chartered Accountant during the course of hearing submitted that Appellants collect an amount (approx. 1.2% of the cost of flat) towards sinking fund. The said amount is ultimately transferred to RWA/society and is in the nature of interest free maintenance security. He drew our attention to the Balance Sheet (page 265 of appeal paper book) where in the amount collected as sinking fund had been shown as liability. He also drew our attention to the ST-3 returns to contend that wherever they have collected amount towards maintenance and repair service, they had regularly been paying service tax. He also placed reliance on following decisions: - - Kumar Beheray Rathi Vs. CCE reported in 2014 (34) S.....
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....ent. The Adjudicating Authority observed that the genuineness of the said term is very much doubted inasmuch as the appellant had not produced any evidence to show that the said IFMS was ever refunded to anyone. We really fail to understand the said reasoning of the Adjudicating Authority. The amount is refundable in case of termination of the ownership agreement and if no such termination has taken place till date, the amount would not be refunded. As long as the provisions for refund of the said amount in the agreement itself is there, it has to be considered that the said amount is refundable and was towards security deposits and was not for the purpose of providing any services, so as to levy tax on the same". "4. In any case, we also note that the issue stands decided by precedent decisions of the Tribunal. Reference can be made to the Tribunal decision in the case of CCE & ST, Jaipur v. Sand Dunes Construction Pvt. Ltd. - 2018 (7) TMI-1383-CESTAT-New Delhi, whereby while taking note of the precedent decision of the Tribunal in the case of Kumar Beheray Rathi v. CCE, Pune - 2013 (12) TMI-269-CESTAT Mumbai = 2014 (34) S.T.R. 139 (Tri.-Mum.). It was held that the securi....
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....ity consumed. He further submitted that electricity is goods. It falls under chapter heading 27160000 of Central Excise Tariff and is liable to NIL rate of Central Excise Duty. For the period upto 30.06.2012 Notification No. 12/2003 dated 20.06.2003 exempted so much of the value of all taxable service as is equal to the value of goods and materials sold by service provider to the recipient of service, subject to the condition that there is documentary proof specifically indicating the value of said goods. He relied the decision of this Tribunal in case of ICC Reality (India) Pvt. Ltd. Vs. CCE reported in 2013 (32) S.T.R. 427 and submitted that supply of electricity being goods, service tax cannot be demanded on the same. On a specific query from the Bench, the learned counsel clarifies that they have installed pre paid meters and the amount for supply of electricity is charged on the basis of units consumed by the individual resident. As regards electricity consumed in common areas or for operating the lift during shutdown, the corresponding expenses are charged by way of maintenance or repair charges. We find that the issue regarding liability for payment of service tax on su....