TaxTMI 
TaxTMI 
2024 (12) TMI 795
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....anding Service Tax of Rs.81,08,042/- and demanding recovery of CENVAT Credit amounting to Rs.69,73,243/- covering the period from April 2007 to March 2012, being the irregular credit availed by the Appellant, under Rule 14 of the CENVAT Credit Rules, 2004. 2. The above Notice was adjudicated by the Ld. Commissioner vide the Order-in-Original No. 40/Comm/ST/KOL/2014-15 dated 30.06.2014 wherein the Ld. Commissioner has confirmed the demand of Service Tax of Rs.81,08,042/- and disallowed the CENVAT Credit amounting to Rs.69.73,243/. Penalty of Rs.1,50,81,285/- was also imposed against the Appellant under Section 78 of the Finance Act, 1994 read with Rule 15 of the CENVAT Credit Rules, 2004. 3. Aggrieved against the above confirmation of the demand and denial of CENVAT Credit, the Appellant has filed the present appeal. 4. Thus, we observe that the issues to be decided in the present appeal are as under: - (i) Whether the demand of Rs.80,61,111/- (including E. Cess and SHE Cess) charged on the ground of difference between the taxable value recorded in S.T.-3 Return and the income shown in the Balance Sheet and Profit & Loss Account is sustainable or not. (ii)....
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....00 D-4 Rent charged from cotton world for the purpose of our Internal control, wrongly added with rental income in P/L A/c, excluded here - D-5 Income not considered in ST-3 Return since the amount of rental income was not realised during the year, which was subsequently adjusted by inclusion in the ST-3 Returns for the subsequent period as and when the amounts were realised except for an amount of Rs.2,96,510 as referred to in D-6, which has not been realised yet. 34,05,053.00 D-6 Payment of service tax on under disclosed amount of Rs.21,69,496.91 as above On 31.05.12 1,39,870.00 On 31.05.12 4,07,622.00 On 31.05.12 13,25,494.00 Service Tax paid on Total amount of 18,72,986.00 Amount on which service tax still due as on date 2,96,510.91 [Note*: D-6 relates to the 'Total' of Rs.21,69,496.91 as indicated in the complete Table at Annexure-B1] 5.1. The Appellant submits that during the period 2007-08, the total turnover shown as per their Profit & Loss Account / Balance Sheet is Rs.424,75,698/-. and the taxable value declared by the....
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....submitted that the amount of Rs.52,25,600/- is liable to be deducted from the total turnover of the year, to arrive at their service tax liability. 5.4. With regard to "D-4" above (pertaining 2007-08), there is no demand raised for the said period viz. 2007-08. However, in respect of the other periods, the Appellant contends that the demand pertains to the rent charged from cotton world for the purpose of internal control, which has been wrongly added with rental income in their Profit & Loss Account and therefore the same is liable for deduction from the turnover of the year, to arrive at their service tax liability. 5.5. With regard to "D-5" above (pertaining 2007-08), the Appellant submits that till 2011, Service Tax was payable on accrual basis. Hence, the Appellant has wrongly included the income on which Service Tax had already been paid also under this category and the same is therefore liable for deduction from the turnover of the year, to arrive at their service tax liability. 5.6. In addition to the above, as per "D-6" of the above table, the assessee submits that they have made Service Tax payment to the tune of Rs.18,72,986/- on under disclosed amount of Rs.21,....
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.... setting aside the demands and allowing their appeal. 10. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 11. Heard both sides and perused the appeal records. 12. We observe that the demand of Rs.80,61,111/- has been confirmed in the impugned order on account of difference in taxable values between the S.T.-3 Return filed and the income shown in the Balance Sheet and Profit & Loss Account. The Appellant submitted a table showing reconciliation of figures between the audited Balance Sheet and the S.T.-3 Returns for the entire period from 2007-08 to 2012-13. 12.1. In this regard, we observe that the Appellant were registered with the Department and were filing their Returns regularly; they have not suppressed any information from the Department. Since the Show Cause Notice has been issued based on the difference noticed between the S.T.-3 Return filed by them and their income as per the audited Balance Sheet / Profit & Loss Account, we find that there is no suppression of fact with intention to evade payment of tax established in this case. In this regard, we find it apt to refer to the judgement of the Hon'ble Apex Court in....
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.... to be paid by the Appellant. We observe that the Show Cause Notice in this case was issued on 04.10.2012, covering the period from 2007-08 to 2012-13. Out of this period, there is no demand of service tax for the Financial Years 2011-12 and 2012-13. The demands pertaining to the Financial Years 2007-08, 2008-09, 2009-10 and 2010-11 are barred by limitation, in view of the above finding that there is no suppression of fact with intention to evade the tax established in this case. Accordingly, the demand confirmed by invoking the extended period of limitation is not sustainable in this case. Therefore, the demand of Service Tax confirmed in the impugned order pertaining to the Financial Years 2007-08 to 2010-11 is not sustainable on the ground of limitation. Thus, we hold that the entire demand of Service Tax confirmed in the impugned order is not sustainable and hence, we set aside the same. 13. Regarding the advance of Rs.46,931/-, we observe that the Appellant have received these advances as security deposit, which is refundable along with interest and hence, no Service Tax is payable on this amount received as advances. Accordingly, we hold that this demand of Rs.46,931/- per....