TaxTMI 
TaxTMI 
2025 (3) TMI 1400
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....gation, the Appellant submitted the copies of ST-3 returns filed, Balance Sheets, Agreements etc. as asked for by the investigating team. Further, statements of Shri Shailendra Sharma, Assistant Vice President of the Appellant company, were also recorded. On the basis of the documents submitted and clarifications provided by the Appellant, the investigating team of the Service Tax Department found that service tax amounting to Rs.1,32,74,055/- was short paid for the period from February, 2014 to March, 2015. Further, the investigating team also computed the demand of service tax amounting to Rs.1,35,94,394/- on the basis of the difference in turnover reported in ST-3 returns and the turnover booked in the Balance Sheets/Final Account statements for the period from April, 2011 to March, 2015. Further, CENVAT credit amounting to Rs.1,07,124/- was alleged to be irregularly claimed. Also, demand of late fee of Rs.1,27,900/- for delayed submission of ST-3 Returns was raised. Subsequently, a Show Cause Notice SCN dated 24.10.2016 was issued to the Appellant demanding service tax on the above mentioned grounds along with interest under Section 75 and equivalent penalty under Section 78 of....
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....nt further submitted that the service tax being a self-assessment taxation regime, the Appellant had already filed the returns and deposited the tax due as per the Appellant's self-assessment till March, 2014 as on the date of visit. He contended that invoking the extended period of limitation of 5 years, when the audit team already audited the Books of Accounts and further, the ST-3 Returns having been already filed, is not justified. He stated that the Returns for the period from 2011-2012 to March, 2014 were filed before the visit of the officers of the Anti-Evasion team on 18.11.2014. Therefore, the demand raised for the said period vide the SCN dated 24.10.2016 is largely hit by limitation. 6. Ld. Counsel for the Appellant also contested raising the demand on the basis of figures reported in Balance Sheet without any investigation. He stated that such demand would not be sustainable. In this regard, he placed reliance on the following decisions in support of his submissions:- Synergy Audio Visual Workshop Pvt. Ltd. vs. CST, Bangalore; 2008-TIOL-809-CESTAT-BANG; TIL Ltd. v CST, Kolkata 2008-TIOL-181-CESTAT-KOL; H.P.L. Chemicals Ltd. Vs. CCE, Chandigarh 2006 (197) E.L.T. ....
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.... Appellant in the present matter is not sustainable. When the demand of service tax against the company is itself not sustainable, imposing penalty on the key personnel of the Appellant is not warranted. 11. Learned Authorized Representative of the Department Shri Santosh Kumar justified the impugned Order and prayed that the appeal filed by the Appellant, being devoid of any merits, may be dismissed. 12. Heard both the sides and perused the appeal records. 13. We find that there are six principal issues which are to be considered by us in this case:- (i) Whether demand notice is justified under proviso to Section 73 when tax liabilities have already been accepted by the Appellant by filing ST-3 Returns; (ii) Whether demand of Service Tax on the basis of figures of turnover in Balance Sheets is legally correct; (iii) Whether demand of Service Tax on services covered under RCM is justified when the same is claimed as Cenvat credit by the Appellant; (iv) Whether demand of inadmissible credit in respect of services, said not to be input services, is justified or not; (v) Whether penalty under Section 78 is imposable, and (vi) Whether personal penalty on Shri Shailendra S....
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....ction (1) of 73 in respect of the amount so paid was required to be issued. Issue No. (ii): 15. We find that Shri Shailendra Sharma Assistant Vice President of the company of the Appellant stated in his statement recorded on 18.11.2014, that his company sold flats in its own account and of other Builders on commission basis. In the Balance Sheet, turnover was shown including sale value of flats sold in its own account. As per Section 66B of the Finance Act, 1994, service tax was chargeable on services only. Service was defined under Section 65B(44) as below:- "(44) "service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely, - (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; --------------" It indicates that no service tax was chargeable on sale of flats by the Appellant in its own account. Service tax was payable only on the commission amount earned by the Appellant for sale of flats of other builders. The demand of service tax on the turnover shown in Balance Sheets is incorrect. Thus, demand of s....
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....) "input service" means any service,- (i) used by a provider of service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an offce relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;" The above definition compasses in respect of service provider, all services used by provider of service for providing output services and also any activities relating to business. We examine each of service in respect of which credit was denied on the ground that they were not input services. We find tha....
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.... Act, 1994, we refer to the provisions of Section 78A for proper appreciation :- "SECTION 78A. Penalty for offences by director, etc., of company - Where a company has committed any of the following contraventions, namely :- (a) evasion of service tax; or (b) issuance of invoice, bill or, as the case may be, a challan without provision of taxable service in violation of the rules made under the provisions of this Chapter; or (c) availment and utilisation of credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or (d) failure to pay any amount collected as service tax to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due, then any director, manager, secretary or other officer of such company, who at the time of such contravention was in charge of, and was responsible to, the company for the conduct of business of such company and was knowingly concerned with such contravention, shall be liable to a penalty which may extend to one lakh rupees." In the present case, evasion of servic....