TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 1670
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....e circles based on the services provided respectively by each of them. 2. The appellant is providing telecommunication services for Chennai Region alone. A Special Audit of the accounts of the appellant was conducted for the period from April 2010 to March 2015 as stipulated under Section 14AA of the Central Excise Act, 1944 as made applicable to Service Tax in terms of Section 83 of the Finance Act, 1944 read with Section 72A of the Finance Act, 1944. 3. During the course of verification of documents by the audit team it appeared that there was short payment of service tax as well as wrongful availment of cenvat credit. The issues noted by the audit team are as follows : * Non-payment of Service Tax on the consideration received for out-roamer from other entities. * Non-reversal of Cenvat credit on Business Support Services reimbursed. * Irregular availment of Cenvat credit on Capital goods; * Irregular availment of input service credit on collection charges. * Non reversal of Cenvat on capital goods destroyed by fire. * Non-payment of service tax on out roaming services between VSL-VSL circle. * Irregular cenvat credit availed on Inputs * Irreg....
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....n their licensed service area. To use an illustration, the Appellant could render telecommunication services only within Chennai. Another entity, Vodafone West Limited (a Vodafone entity set up in Gujarat) could render telecommunication services only within Gujarat. 4.6 The Appellant operates out of 6 circles in Tamil Nadu. The Chennai circle renders telecommunication services only within Chennai. While separate service tax registrations have been obtained by each of the 6 Circles, all the 6 circles operate under a single PAN. 4.7 A subscriber of appellant can continue using the network of other Vodafone entities and other circles of the Appellant even when the subscribers are roaming, i.e., when they are travelling to locations that are outside the Appellant's circle. The roaming subscribers could recharge their telephone balance(s) using prepaid roaming Electronic top-ups ("E-Top ups") available at distributors and retailers across the country. The issue is only with pre-paid subscribers. 4.8 As service tax was liable to be paid on services provided or agreed to be provided, the applicable service tax would be remitted at the time when the E-Top ups are sent to retai....
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....r circles of the Appellant. The Appellant would recover the expenses incurred towards procurement of these input services from the other circles under debit notes. The Department has demanded reversal of CENVAT Credit availed of service tax paid on the sole basis that the said input services were used not just by the Appellant, but also by other circles. 5.2 The Appellant had initially availed CENVAT Credit of duty paid on HDPE Ducts classifiable under CH 39 of the Central Excise Tariff Act, 1985, by treating them as capital goods. Upon realising the inadvertent error, the Appellant classified the HDPE Ducts as inputs and claimed credit of the duty paid. This CENVAT Credit was denied on the ground that the HDPE Ducts do not fall within the definition of 'capital goods' in Rule 2(a) of the CCR or as inputs under Rule 2(k) of the CCR. 5.3 The impugned Order in paragraph 39 has acknowledged that the Appellant has reversed CENVAT credit of Rs.1,12,359/- along with interest of Rs.84,641/- in respect of waste bins, paper rolls etc. and has appropriated the payment. However, the said finding has not found its place in the operative portion of the impugned Order, and the demand o....
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....ct, 1994 ("Act") for the period from April 2010 to March 2015, the Show Cause Notice No. 51/2015 dated 16.10.2015 ("SCN") was issued proposing to demand service tax allegedly short paid and to recover Cenvat credit allegedly wrongly availed along with interest and penalty. A. The Appellant is not liable to pay service tax on the roaming revenue transferred from other Vodafone entities. [INR 28,20,45,999/-]. A1. It has been alleged in the impugned Order that the Appellant has not paid service tax on consideration received from other Vodafone entities or other circles of the Appellant for providing services to the subscribers. The Appellant submits that the impugned Order has assumed that the amount received from other Vodafone entities operating in other circles is consideration received by the Appellant from the subscribers for rendering the services and that the same is required to be included in the taxable value for payment of service tax. The Appellant denies such an assumption. A2. The Appellant submits that there is no short payment of service tax inasmuch as the service tax stands remitted at the time of sale of the e-top up to the subscriber. This is a case ....
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....emanded from the Assessee therein on the SIM Cards sold by the retailer to the ultimate subscriber. Applying the logic to the instant case, it is submitted that when the other Vodafone entity/circle of the Appellant has remitted applicable service tax, the Appellant cannot be made liable to pay service tax again. The decision of the Tribunal was affirmed by the Hon'ble High Court of Allahabad in CCE Vs Chotey Lal Radhey Shyam - 2018 (8) G.S.T.L. 225 (All.) A Revenue Appeal filed against the said judgment is pending before the Hon'ble Apex Court in Commissioner vs, Chotey Lal Radhey Shyam - 2018 (13) G.S.T.L J4I (SC). The decision of the Hon'ble High Court is not stayed as on date. A9. Further reliance is placed on Kakinada Seaports Ltd. vs. CCE, S.T. & CUS., Visakhapatnam-II - 2015 (40) S.T.R. 509 (Tri. - Bang.). The Tribunal was faced with a situation where the service provider had paid service tax while the levy was under reverse charge mechanism. In this context, the Tribunal held in paragraph 4.4 that once the service provider has paid the tax under reverse charge mechanism, Service Tax cannot be demanded again from the service recipient, though the liability....
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....es to other units of same entity. Therefore. the entire demand is misconceived. B6. Reliance is placed on paragraph 10 of the decision in Greaves Cotton Ltd. vs. CCE, Chennai - 2015 (37) S.T.R. 395 (Tri. - Chennai) for the proposition that credit cannot be denied merely because the Service Tax on advertisement charges was paid by Unit-I for the advertisement of product of Unit-II, while both are under the umbrella of the same company. B7. Without prejudice, it is submitted that the Appellant would have been able to obtain registration as an Input Service Distributor (ISD') for such situations. It is now settled that procedural infractions should not obstruct substantive rights available to an Assessee. Reliance is placed on Paragraph 5 of Dashion Lid. v. CCE 2013 (288) E.L.T. 291 (Tri. - Ahmd.) and affirmed vide Paragraph 7 of CCE vs Dashion Lud - 2016 (41) S.T.R. 884 (Guj.). B8. Furthermore, this proposition has been accepted by the Revenue in Part I of the Circular bearing reference No. 1063/2/2018-CX dated 16.02.2018. Therefore the demand merits to be set aside. C. Demand for reversal of credit on debit notes raised on other Vodafone entities for costs incurr....
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....efinition of input service in Rule 2(ℓ) of the CCR has been restricted w.e.f. 01.04.2011 and that the services provided by the vendors have no nexus with telecommunication services provided by the Appellant. D2. The Appellant submits that the services rendered by the collection agents are essential to the telecommunication service provided by the Appellant. The services provided by the collection agents are two-fold- * With respect to collecting the bills from the subscribers who are unable to pay their dues through the normal mechanism of cheque/cash at Vodafone stores. online payment, etc. * With respect to collecting the defaulting payments from the post-paid subscribers, after the expiry of their credit period (20 days after the end of their billing cycle). D3. Thus, the Appellant pays these collection agents either a specified percentage of the collections made or as a fixed sum, depending on the agreement between the collection agents and the Appellant. D4. The Appellant submits that the Tribunal has allowed Cenvat credit of service tax paid on services of collection agents for collection of dues in Commissioner, CGST, Jaipur vs. Bharti Hexacom India Ltd. -....
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....ue Appeal. However, the Order of the Hon'ble Delhi High Court has not been stayed. Though credit of duty paid on the HDPE ducts was inadvertently taken under 'Capital goods' credit is available as inputs' E4. The Appellant had inadvertently availed CENVAT Credit of duty paid on the HDPE ducts under the `capital goods' category. There is no dispute that applicable duty was remitted on the HDPE Ducts and that the HDPE Ducts are used in the rendition of telecommunication services. The only dispute is as to whether the duty paid is eligible for credit. E5. The Appellant submits that the duty paid on the HDPE Ducts is available to the Appellant as 'inputs even if it had been inadvertently availed as 'capital goods'. Reliance is placed on Paragraph 21 of CCE vs. Modi Rubber Ltd. - 2000 (119) E.L.T. 197 (Tribunal - LB) in this context. F. The Appellant has correctly availed CENVAT Credit on the services provided by the vendor and no reversal is required under Rule 4(7) of the Credit Rules. |INR 12,91,959/-] F1. The impugned Order has confirmed the demand for reversal of credit on the ground that the Appellant has not reversed the CENVAT Credit on t....
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....r imposing equal penalty. Thus, if it is demonstrated that extended period of limitation cannot be invoked, then it follows that equal penalty ought not to be imposed. G5. Without prejudice, it is submitted that this is a fit case for extending the benefit under Section 80 of the Act, which was operative for the entire period under dispute. H. There can be no interest liability fastened on the Appellant as the demand itself falls. H1. The Appellant submits that interest is not payable because the demand fails. The Appellant submits that there is no short payment of service tax, and the Appellant has availed the CENVAI Credit correctly H2. Thus, no interest is payable, and no penalty can be levied on the Appellant. The Ld. Counsel for the appellant prayed that the appeal may be allowed. 6. The Learned Special Counsel Shri P. Ayyam Perumal appeared and argued for the Department. 6.1 In regard to the first issue as to the non-payment of service tax on the out-roamer revenue transferred from other Vodafone entities as well as from other circles of VSL, the learned counsel for the department adverted to the findings in para-33 of the impugned order. ....
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....r revenue so transferred to the home circle has been discharged to tax by the out roamer circles and therefore the appellant is not required to pay service tax. Para 33.4 of the impugned order was adverted to by the Ld. Counsel for the department to submit that the appellant has not furnished any document to show that these out roamer circles have discharged service tax on the out roamer revenue that has been transferred to the appellant. Therefore the contention of the appellant cannot be accepted. 6.4 As per Rule 2 (1) (d) (ii) of the Service Tax Rules, 1994 "person liable for paying service tax" in a case other than sub-clause (i), means the 'provider of service'. As per the above rule, the service provider is required to pay service tax and it cannot be done by any other person. Further, payment made by any other person cannot be a substitute for payment of service tax by the appellant. The appellant being provider of output services, the out roamer revenue is subject to levy of service tax at the hands of the appellant. Since there is no dispute that the appellant is providing services to all its subscribers irrespective of the fact t....
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....; 6.8 The judgment relied by the appellant in the case of Chotey Lal Radhey Shyam Vs CCE Lucknow (supra) is not applicable to the facts of the case for the reason that the issue involved in that case was the dispute of non-payment of service tax on the profit margin earned by appellant on the sale of SIM cards and recharge coupons of BSNL. The issue is entirely different and not applicable. Further the department has filed appeal before the Hon'ble Apex Court against the judgment of Hon'ble High Court of Gujarat which is still pending. 6.9 The judgment in the case of Kakinada Seaports Ltd. (supra) cannot be applied to the facts of this case as the said judgment involves payment of service tax under reverse charge mechanism which is altogether different. 6.10 The decision in the case of Jaipuria Infrastructure Developers Pvt. Ltd. (supra) is not of assistance as the matter was remanded to the original authority to verify the facts of payment of service tax and therefore not applicable to the facts of the case. It is prayed that the first issue as to demand of service tax on out roamer revenue may be upheld as confirmed by the original authority. 7. In reg....
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....to business" stands omitted. The appellant is therefore eligible to avail credit only when the input services have nexus with the output services provided. In the present case, the collection agent service does not have any nexus with the output service viz. telecommunication service rendered by appellant and hence the original authority has correctly denied the credit. 10. The other issue is with regard to irregular availment of cenvat credit passed on by debit notes raised to group concerns. As per the audit reports, it was noted that the appellant has raised debit notes on their group concerns in order to pass on charges like lease line charges, black berry services, reimbursement of expenses like E&Y charges, cable and wireless for bandwidth etc. The appellant has availed cenvat credit of service tax paid on these charges and failed to reverse the cenvat credit attributable to that portion of the services in respect of which reimbursements were sought. The contention of the appellant that they have correctly availed input service credit on such charges though some part of the services has been used by other units and the credit proportionate to that could hav....
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.... the Government by other entities as well as other circles within VSL. 14. From narration of facts, the consequence of transaction is such that the recharge vouchers / E-top ups are purchased by appellant's subscribers from other entities or from other Circles while they are in roaming circle. While selling the RCV/E-Top ups, the customer pays the charges for receiving the services of the RCV as well as the service tax on such service. According to appellant, the Vodafone entity operating in the roaming circle who has collected the charges along with service tax pays service tax to the Government exchequer. The charges collected from the subscribers are then transferred to the appellant. All these are done by internal accounting system. The transaction can be diagrammatically illustrated as under:- 14.1 The appellant has submitted that they have to account the revenue received for providing service for the purpose of ascertaining the license fee that has to be paid. The Ld. Counsel for the appellant explained that a license agreement has been entered by the appellant with the Government for provision of Unified Access Service (UAS). Part-III of the agreeme....
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....to account. 18.3.2 Further royalty for the use of spectrum for point to point links and other access links shall be separately payable as per the details and prescription of Wireless Planning & Coordination Wing. The fee / royalty for the use of spectrum / possession of wireless telegraphy equipment depends upon various factors such as frequency, hop and link length, area or operation and other related aspects etc. Authorization of frequencies for setting up Microwave links by Licensed Operators and issue of Licenses shall be separately dealt with WPC Wing ae per existing rules. 19. Definition of 'Adjusted Gross Revenue' : 19.1 Gross Revenue: The Gross Revenue shall be inclusive of installation charges, late fees, sale proceeds of handsets (or any other terminal equipment etc.), revenue on account of interest, dividend, value added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue, without any set-off for related item of expense, etc. 19.2 For the purpose of arriving at the "Adjusted Gross Revenue (AGR)" the following shall be excluded from the G....
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...., the Company has been directed to pay service tax amounting to Rs. 26,28,88,110/- along with applicable interest. 2.2 In this connection, at the outset it is submitted that there is no short payment of service tax by the Company during the subject period. In this regard, we request you to refer to our submission provided herein below: (i) VSL is engaged in the business of providing GSM mobile telecommunication Network in Chennai to its subscribers under a license issued to them by the Department of Telecommunication, Government of India for establishing, maintaining and operating the Cellular Mobile Telephony Services (CMTS) in the referred region. The subscribers of VSL include both prepaid and post-paid subscribers located in the Territory of Chennai (home circle). (ii) Similarly, other Vodafone entities are engaged telecommunication services in their respective telecom circle. (iii) Prepaid telecommunication services are provided through Recharge Coupon Vouchers (RCV) / Electronic Top up (E Top up) to be procured by the subscribers from various retailers located throughout the country. (iv) Service tax in respect of prepaid services is discharg....
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....y a Vodafone entity from a particular telecom circle which is essential for computing license fee and for preparing necessary reports for the management. Such transfer is not against any service provided by VSL to the Vodafone entity operating in the roaming circle. 2.4 Given the above, it is submitted that service tax on the services provided to the subscriber has been appropriately discharged by the Vodafone entity operating in the roaming circle and service tax on the same value of service should not be demanded from VSL. This view finds support from the case of Lilason Breverics ys. CCE(2010) 24 STT 279 (CESTAT SMB) wherein tax was paid by the service provider instead of service receiver, it was held that demand of tax again on the same service is not sustainable. 2.5 In relation to instant transaction, your good self is of the view that service lax, on the amount of E Top-up recharged by a roaming subscriber, has been erroneously paid by the Vodafone entity in the roaming circle and the same should be claimed as refund by such entity. Further, your good self is of the view that service tax on such revenue should have been paid by VSL as a service provider. 2.6 At this po....
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....ischarged by the entity / other circle, it is not stated in the audit report that the other entity has not discharged the service tax. The contention that the appellant has discharged service tax on the out roamer revenue of other entities has also been put forward before the audit team. The relevant part of the audit report reads as under : 1.2) ST not discharged on "OutRoamer Revenue" by the Assessee: Outroamer Revenue: Meaning ;- Chennai Subscriber (Assessee's customer) recharging his mobile from a different circle (other than from Chennai owned by a different entity: 1.2.1) Facts: The Subscribers of the Assessee (Vodafone South Limited, Chennai), have the option to recharge their mobiles from Other Circles, that are owned by different Entities/ Companies, who have separate ST Registration and PAN. At the month end, invoices are raised by the Assessee on other circles based on the value recharged by the Assessee's Subscribers at the Other Circle. These amounts are reflected as Revenue in the b0oks of the Assessee on usage basis. However, the Assessee did not discharge Service Tax on such Invoices/transactions although it is the "Service Prov....
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....nt of Service Tax. 1.2.4) Treatment in Books and in ST3 Return: 1.2.4.1) Books: All "Out Roamer" transactions are recognized as Revenue, on Usage basis, in Assessee's books. On "Out Roamer" transactions the Assessee claims the Card Value amount from different companies (Assessee's Subscribers who have recharged from Other circles). 1.2.4.2) ST 3 Return: Out roamer Revenue though treated as a Revenue in books, is not disclosed as a Taxable Value in the ST 3 Returns. 1.2.5) Assessee's View: * Revenue Neutrality: It is informed by the Assessee, that although ST is not discharged by us, the same is discharged at the Primary Level, by a different entity, and hence it is Revenue Neutral. This stand cannot be accepted since, the assessee being the provider of service, has availed cenvat on all input and input services and on capital goods even on such services provided to Outroamer subscribers and to claim that ST need not be discharged by it since it has already been discharged by another entity at the Primary level defies all logic. It is only natural that if some other entity has paid Service Tax on an "Unfulfilled Service" on advance basis, it....
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....al, is against the provisions of law, especially when, the law provides for adjustment of ST paid on Unfulfilled services to the assessee who has discharged the tax. v) The Industry Practice is to discharge Service Tax on "Outroamer Services" as the same is treated as Revenue in books. (eg.) Aircel Cellar Ltd." 17. On perusal of the above audit report, the explanation given by the assessee that service tax has already been discharged by the other Vodafone entity or other circle though seen noted and understood by the audit team has not been accepted. In para 1.2.5 it is noted by the audit team that if any other entity has paid service tax without providing service, on advance basis, such assessee is left to claim refund. The contention of the assessee that service tax already stands discharged by other entity is not negated by the audit team. The department has no explanation as to what happened to the service tax collected by the other Vodafone entities or other circles on the out roamer revenue which is the subject for demand of service tax in the present dispute. The department has to explain the same and cannot leave it for guess work. The audit report concludes by merely sa....
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....ies (as confirmed in the Order-in-Original, dated 3-10-2010) for the period in question when the "Business Auxiliary Service" was clearly defined under Section 65(19) of the Finance Act, 1994 and included services rendered by the respondent? (iii) When the Hon'ble Apex Court in the case of Idea Mobile Communication reported in 2011 (23) S.T.R. 433 (S.C) has held that the value of SIM card forms part of activation charges as no activation is possible without valid functioning of SIM card and the value of taxable service is calculated on the gross total amount and the present transactions to BSNL and payment by BSNL were different, whether the Hon'ble CESTAT was justified in dropping the demand? (iv) Whether the Hon'ble CESTAT erred in treating it as double taxation when Services are distinct? Service Tax is paid on the full value of SIM card by BSNL under the "Telecommunication Service" and not under "Business Auxiliary Service". In the instant case Service Tax has been demanded from the respondent under the category of "Business Auxiliary Service" on the commission received from BSNL, which is different from "Telecom Service". (v) Whether the Hon'ble CESTAT was justified....
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....ndra, JJ, vide judgment dated 25th July, 2013 dismissed appeal at admission stage passing following order : - "Heard Mr. Rajesh Singh Chauhan, learned Counsel for the appellant. In nutshell, the case of the appellant is that M/s. Daya Shanker Kailash Chandra/respondent having Service Tax Registration under the category of 'Business Auxiliary Service' is a partnership firm which is providing the service on behalf of M/s. Bharat Sanchar Nigam limited (BSNL), a company incorporated under the Companies Act, 1956 for providing services of promotion and marketing/distribution of its various products. During the course of enquiry, it was observed that the respondent neither paid Service Tax amount to Rs. 6,87,387/- including cess during the periods 2008-09 and 2009-10 including April, 2010 nor submitted ST-3 returns as and when required. Accordingly, a show cause notice was issued to the respondent. The case was adjudicated by the Additional Commissioner, Central Excise, Lucknow, vide order dated 25-10-2011, wherein the adjudicating authority confirmed the demand of Rs. 6,87,389/- under the proviso to Section 73(1) of the Finance Act, 1994 along with interest and imposed penalty under....
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....ification No.30/2012-ST the appellant is liable to pay the service tax under reverse charge mechanism. The Tribunal observed that since the service tax on the consideration has already been discharged by GOAP, the demand on the appellant again cannot sustain. Relevant paragraphs read as under : "4.4 The second ground taken by the appellant is that on the same service, tax cannot be demanded twice. In this case GOAP has paid the tax and in fact tax has been reimbursed by the appellant. Apparently in the initial period of introduction of negative list and the amendment of Finance Act, both GOAP and the appellant did not take note of the provisions and consequently GOAP continued to pay tax. The question that arises is whether in a situation like this where service provider viz., GOAP has paid the tax even though not liable to pay the same can again be demanded from the appellant. Since taxable event is one and the same, there cannot be levy of Service Tax twice. Therefore, we find ourselves in agreement with the submission that once the service provider has paid the tax under reverse charge mechanism, Service Tax cannot be demanded from the appellant. Nevertheless it has to be appr....
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....irmed alleging that the appellant is eligible to avail proportionate credit only. It is pointed out by the Ld. Counsel for appellant that the definition of "input services" given in Rule 2(ℓ) of Cenvat Credit Rules, 2004 does not say that the entire input services should be used only by a single output service provider. It merely states that input service has to be used by the output service provider. In the present case, the services have been used by other circles who are also output service providers. We find that the appellant having paid the service tax on the entire consideration and having consumed the services, the department cannot deny the credit alleging that the services are shared with output service providers of other circles. 21.2 The Ld. Counsel relied upon the decision in the case of Greaves Cotton Ltd. (supra) wherein it was held that credit cannot be denied merely because the service tax was paid by Unit I for the output service (advertisement charges) when Unit II also had used the services. 21.3 The decision in the case of Dashion Ltd. (supra) has been relied to argue that non-obtaining registration as Input Service Distributor (....
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.... to input services used for providing output services. 23.1 In the case of Commissioner of Central Goods & Service Tax, Jaipur Vs Bharti Hexacom India Ltd. - 2023 (5) TMI 520 CESTAT NEW DELHI, the Tribunal has held that collection agency service is covered within the main clause of Rule 2(ℓ) of CCR 2004. Relevant para of the decision is reproduced as under : "14. This apart, what needs to be noticed is that the view taken by the Joint Commissioner that since the activities in respect of collection /recovery of post-paid plan outstanding dues had been undertaken after completion of the provision of taxable output services they would not be covered in the main part or the inclusive part of the definition of input service is not correct. Rule 2(ℓ) of the 2004 Rules provides that the input service must be used for providing output service. The provider of output service, therefore, shall be eligible to avail CENVAT Credit on all those services which are used for providing output services without which the provision of the said output service would become impossible or commercially inexpedient. What, therefore, follows is that services having relat....
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....redit of input service i.e. seizing charges if any exempted service is provided. As per our above discussion, the appellant is entitled for the Cenvat credit on the service of repossession of vehicle provided by the various recovery agent to the appellant against the output service of the appellant i.e. lending of money (Banking and Other Financial Service), accordingly the impugned order is set aside. The appeal is allowed. 15. In Vodafone Essar Cellular Ltd., the Tribunal also reiterated the aforesaid views in the following manner:- The third issue that arises for consideration is the credit availed on various input services. The appellant has given the details of the various input services in the table as shown above. The services erection, construction and installation of towers and shelters was availed by the appellant for providing output service of telecommunication. These services have direct nexus with the output service and therefore, is eligible for credit. The Tribunal in the appellant's own case vide Final Order dated 22.01.2018 has allowed the credit. For this reason, we hold that the credit on this service is eligible. The appellant has availed credit on coll....
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.... irregular availment of cenvat credit passed on by debit notes to group concerns. It is alleged in the SCN that the appellant has raised debit notes on their group concerns to pass on charges like lease line charges, black berry services, reimbursement of expenses like E&Y charges, cable and wireless for bandwidth etc. The case of the department is that the appellant has availed credit of the service tax paid on these input services although part of the consideration was reimbursed by their group concerns who also used these services. The Department is of the view that the appellant is eligible to avail only proportionate credit for which they have borne the expenses (though service tax paid entirely) and the credit attributable to the amount which has been reimbursed by the group concern is to be reversed. The very same issue has been considered with regard to BSS. The appellant has argued that in any case, if they had obtained ISD registration they would be able to pass on the credit to their group concerns and it is only a procedural lapse. For the reasons recorded in para 24 as above, we find that the credit cannot be denied when the appellant has paid the ser....
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....ce has been issued only on such interpretational issues. In such circumstances, we find that there is no ingredients to invoke the extended period or to impose penalties. The decision in the case of International Merchandising Company (supra) would be applicable and are reproduced below : "22. The final submissions which need to be considered is whether (i) the extended period of limitation would stand attracted in the case of the first show cause notice; and (ii) whether a valid ground for the imposition of a penalty was made out. In this regard, reliance has been placed on behalf of the appellant on the decision of this Court in Padmini Products v. CCE, Bangalore [(1989) 4 SCC 275 = 1989 (43) E.L.T. 195 (S.C.)] to submit that the extended period of limitation would not be attracted as the appellant has not acted with dishonest or fraudulent intent. 23. In Paragraph 4.20 of its order, the Tribunal has specifically observed that the present case involves the interpretation of statutory provisions. Having said this, the Tribunal in the concluding paragraph of its decision held that since the matter was being remitted back to the Commissioner for re-determination of t....