TaxTMI 
TaxTMI 
2025 (8) TMI 802
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....2022 following has been held: (a) I confirm the demand of Rs. Service Tax of Rs. 6,65,134/- [Rs. Six Lakhs Sixty-Five Thousand One Hundred ThirtyFour Only) [inclusive of Ed. Cesses, SBC. KKC] towards service taxnot, paid during the F.Y. 2015-16, 2016-17 and 2017-18 (up to June, 2017) and order for its recovery from them under Section 73(1) of the Finance Act, 1994 along with interest payable from the due date of payment till the actual date of payment of such tax in terms of section 75 of the Finance Act, 1994. (b) I impose a penalty of Rs. 6,65,134/- [Rs. Six Lakhs SixtyFive Thousand One Hundred Thirty-Four Only] on the party under Section 78 of the Finance Act, 1994 and order for its recovery from them. (c) I also confirm demand of Rs. 1,45,000/- [Rs. One Lakh Forty-Five Thousand Only] [inclusive of Cess] towards service tax not paid for the F.Y. 2015-16 and order for its recovery from them under Section 73(1) of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017 along with interest payable on the amount. (d) I also impose a penalty of Rs. 1,45,000/- [Rs. One Lakh Forty-Five Thousand Only] on the party under Section 78 of the Fin....
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....4 read with Section 174 of CGST Act,2017. (iv) Penalty should not be imposed upon them on the service tax amount mentioned in above (i) and (ii) under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017. 2.4 The show cause notice was adjudicated as per the order in original referred in para 1.2 above. 2.5 Aggrieved appellant filed appeal before the Commissioner (Appeal) which has been disposed as per the impugned order referred in para 1 above. 2.6 Aggrieved appellant has filed this appeal. 3.1 I have heard Shri Atul Gupta, Advocate for the appellant and Ms Chitra Srivastava, Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submits that: • Appellant has made correct declaration under SVLDR Scheme and has rightly availed the CENVAT Credit before opting for the said scheme. • On plain reading of Rule 3, 4 and 9 of Cenvat Credit Rules along with Rule 4A of the Service Tax Rules, it is evident that the provider of the output service could have taken CENVAT Credit on the basis of invoices evidencing the payment of service tax on the input services received by him. Appe....
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....ducts Limited [1989 (43) ELT 195 (SC)] • No penalty and interest is imposable. 3.3 Authorized representative reiterated the findings recorded in the impugned order. 4.1 I have considered the impugned order along with the submissions made in appeal. 4.2 Impugned order records the findings as follows: "9. On careful consideration of the facts, circumstances of the case, documents on record and the submissions of the appellant, I find that the issues for determination in this case are: (i) Whether the Show Cause Notice issued in this case is barred by limitation of one year prescribed under Section 129(2)(c) of the SVLDRS, 2019 thereby rendering the demand proceedings void? (i) Whether demand of Rs.1,45,000/- confirmed by the adjudicating authority holding the same liable to Service Tax under Section 66E(e) of the Finance Act, 1994 is legal and proper? (ii) Whether the order of recovery of interest and Imposition of penalty on the appellant as consequence to the confirmation of demand is correct or not? 10.1 I note that the appellant had filed declaration under SVLDRS, 2019 under the category `voluntary disclosure'....
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....9 as contended by the appellant since the department had found the declaration of the appellant false within one year of issue of discharge certificate though specific date thereof is not forthcoming. 10.3.2 Further, I find that the Hon'ble Supreme Court vide Judgement dated 27.04.2021 in Miscellaneous Application No. 665/2021 in SWM (C) No. 3 of 2020 has issued the following directions "We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituti....
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....lty to that extent. It is not out of place to mention that in the facts and circumstances of the present case I uphold invocation of extended period of limitation for the purpose of demand of Service Tax." 4.3 Order in original records the findings as follows: "6. I observe that the issues for my consideration in the instant matter are (a) Whether or not the party is liable to pay Service Tax amounting to Rs. 19,32,678/-[Rs. Nineteen Lakhs Thirty Two Thousand Six Hundred SeventyGBPight Only] [inclusive of Ed. Cesses, SBC, KKC] for the period 2015-16, 2016-17 and 2017-18 (up to June, 2017) and Rs. 1,45,000/- [inclusive of all Cesses] on forfeited amount along with interest for the F.Y. 2015-16. (b) Whether or not they are liable to penalty under Section 78 of the Act. I proceed to decide the issues sequentially. 7. I find that the party did not file any ST-3 return during the F.¥. 2015-16, 2016-17 and 2017-18 up to June, 2017) and thus, managed to evade payment of service tax on the taxable services valued at Rs. 1,38,15,775/- resulting in non-payment of service tax. Accordingly, I hold that M/s Velocity Propbuild Pvt. Ltd., GF, 51, SNG Plaz....
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....ppellant had not filed any ST-3 Returns as prescribed for the period 2015-16, 2016-17 and 2017-18 (Upto June 2018) in the prescribed manner and within the prescribed date for filing the return. The liability to the service tax of Rs 19,32,878/- is also not in dispute. The appellant has in these proceedings claimed that they have claimed with regards to availability of the CENVAT Credit of Rs 6,65,135/- which as per them was netted of by them by disclosing their liability under SVLDRS. 4.5 As appellant has not filed the ST-3 return during the relevant period they have never made a declaration in respect of CENVAT Credit taken by them against the invoices of input service. The submission made, by the appellant that they were taking the credit in the CENVAT Register is without any basis. There is no document as CENVAT register prescribed by the CENVAT Credit Rules, 2004 or the Service Tax Rules, 1994. The private records of the appellant, which are duly declared by the appellant to the department in terms of Rule 5 of the Service Tax Rues, 1994 are considered acceptable. I do not find at any stage of these proceedings appellant have produced any such declaration of such a CEN....
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....le as per Rule 14 and Rule 15 of CENVAT Credit Rules, 2004. By not filing the ST-3 return claiming the CENVAT Credit taken, appellant have denied the opportunity to the revenue authorities to verify the correctness of the claim of credit. 4.9 The decision in the case of a. Origin Learing Solutions Pvt. Ltd., was case of refund under rule 5 of the CENVAT Credit Rules, 2004. The credit in that case was in respect of the paid under the reverse charge mechanism. It was not the case where no ST-3 return was being filed but the case where CENVAT credeit was not declared in the return for a particular period. Party had undertaken to declare the same in the subsequent return. In these circumstances CESTAT held that mere non-mention of certain amounts of Credit taken in a particular period in the ST-3 return for that period was a procedural lapse. This judgement is also distinguishable on the facts as the party therein has categorically declared their claim to credit while making the application for refund. b. Target Corporation India Pvt Ltd., was also the case of refund under Rule 5 of the CENVAT Credit Rules, 2004. In that case also party had claimed the refund....
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.... conditions are only directory." 4.11 The same has been echoed by the Hon'ble Supreme Court in case of Dilip Kumar & Co [2018 (361) E.L.T. 577 (S.C.)] holding as follows: "44. In Hansraj Gordhandas case (supra), the Constitutional Bench unanimously pointed out that an exemption from taxation is to be allowed based wholly by the language of the notification and exemption cannot be gathered by necessary implication or by construction of words; in other words, one has to look to the language alone and the object and purpose for granting exemption is irrelevant and immaterial. 45. In Parle Exports case (supra), a Bench of two-Judges of this Court considered the question whether nonalcoholic beverage base like Gold spot base, Limca base and Thumps Up base, were exempted from payment of duty under the Central Government notification of March, 1975. While considering the issue, this Court pointed out the strict interpretation to be followed in interpretation of a notification for exemption. These observations are made in para 17 of the judgment, which read as follows : "How then should the Courts proceed? The expressions in the Schedule and in the notificatio....
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....reted to benefit the subject/assessee. A careful reading of the entire para, as extracted hereinabove would, however, suggest that an exception to the general rule of tax has to be construed strictly against those who invoke for their benefit. This was explained in a subsequent decision in Wood Papers Ltd. case (supra). In para 6, it was observed as follows : "... In Collector of Central Excise v. Parle Exports (P) Ltd., (1989) 1 SCC 345, this Court while accepting that exemption clause should be construed liberally applied rigorous test for determining if expensive items like Gold Spot base or Limca base of Thums Up base were covered in the expression food products and food preparations used in Item No. 68 of First Schedule of Central Excises and Salt Act and held „that it should not be in consonance with spirit and the reason of law to give exemption for non-alcoholic beverage basis under the notification in question‟. Rationale or ratio is same. Do not extend or widen the ambit at stage of applicability. But once that hurdle is crossed construe it liberally. Since the respondent did not fall in the first clause of the notification there was no question of gi....
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.... Wood Papers, referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision, they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State...." 50. In Tata Iron & Steel Co. Ltd. v. State of Jharkhand, (2005) 4 SCC 272, which is another two-Judge Bench decision, this Court laid down that eligibility clause in relation to exemption notification must be given strict meaning and in para 44, it was further held - "The principle that in the event a provision of fiscal statute is obscure such construction which favours the assessee may be adopted, would have no application to construction of an exemption notification, as in such a case it is for the assessee to show that he comes within the purview of exemption (See Novopan India Ltd. v. CCE and Cus....
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....ightly declared their tax liability after netting of the credit. The decision of learned Single Judge of Karnataka High Court relied upon by the appellant was set aside by the division bench as reported at [2021 (48) G.S.T.L. 227 (Kar.)] Division bench of Hon'ble Karnataka High Court has observed as follows: "21. A Scheme was enacted by the Parliament known as Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 vide Finance (No. 2) Act, 2019 and the object of the Scheme was to provide one time measure for liquidation of past disputes of service tax. The Scheme came into force vide notification dated 21-8-2019 and the respondent/assessee submitted an application in the prescribed format under the Scheme on 28-12-2019 by applying electronically in Form SVLDRS-1. 22. The dispute in the present case is that the appellants have disallowed the pre-deposit of Rs. 1,45,87,081/- i.e., amount of CENVAT which is the subject matter of the show cause notice while considering the application preferred in the SVLDR Scheme. The learned Single Judge has allowed the writ petition and has directed the Designated Committee to accept the declaration filed by the petitioner/re....
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....ized, is an inadmissible CENVAT credit and availment of the same is proposed to be denied in show cause notice. Therefore, in the light of Rule 6(1) of the Cenvat Credit Rules, 2017, by no stretch of imagination the respondent was entitled to claim Cenvat credit. 27. It is pertinent to note that the CENVAT credit is a concession and not a vested right as held in the case of TVS Motor Company Ltd. v. The State of Tamil Nadu and Ors., reported in 2019 (13) SCC 403 = 2018 (18) G.S.T.L. 769 (S.C.). Similarly in the case of Nelco Limited v. The Union of India and Ors., reported in 2020 (36) G.S.T.L. 24 the Division Bench of Bombay High Court, in paragraph 42 has held as under : "42. The decision of the Supreme Court in the case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd., MANU/SC/0467/1999 = 1999 (112) E.L.T. 353 (S.C.) cited by the petitioner refers to MODVAT credit and in deciding a correlation of the raw material and final product. The Apex Court held that it is not as if the credit can be taken only on the final product manufactured out of a particular raw material in which the credit is related. It was held that the credit may be taken on a fina....
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..... Union of India, reported in 2020 (41) G.S.T.L. 165 (Del). This Court has carefully gone through the judgment delivered by the Delhi High Court as well as the Circular issued by the Finance Department dated 27-8-2019 and 12-12-2019. 33. The present case is altogether having a distinguishable feature. In the present case, the respondent is not entitled to claim CENVAT credit in the manner and method it has been done. CENVAT Credit cannot be carried forward as input tax credit and there cannot be any adjustment on pre-deposit as the respondent has not filed GST TRAN-1. Therefore, the CENVAT credit cannot be transformed into input tax credit. 34. It is an undisputed fact that the respondent has not filed ST-3 returns till the intervention of the department and the assessee however filed a declaration in the year 2019, after introduction of GST. As the respondent has not filed the GST TRAN-1, he is not eligible on account of Rule 6(1) of the CENVAT Credit Rules, 2017. The Designated Committee was justified in passing the order which was subject matter of challenge in the writ petition and therefore, this Court is of the opinion that the order passed by the learned Si....