TaxTMI 
TaxTMI 
2025 (8) TMI 1345
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....he period 2016-17 from the due date of discharging service tax liability till the date of payment i.e. 04.03.2022. Further, in light of discussions made in foregoing paras wherein, it has been established that the intent of the appellant was to evade payment of due service tax liability I impose mandatory penalty equal to the amount of Service tax Lc. Rs.9,53,294/- under Section 78 of the Act ibid. As regards imposition of penalty under Section 77(2) of the Act, I find the appellant has filed the ST-3 return for the period April to June, 2017 late by 1662 days from the due date, hence I uphold imposition the penalty of Rs. 10,000/-under Section 77(2) of the Act, ibid upon the appellant." 2.1 Appellant is engaged in providing services under the category of Construction of Residential Complex Services. 2.2 During the course of audit of the records of the appellant for the financial year 2016-17 and 2017-18 it was observed that appellant had not paid service tax amounting to Rs.9,44,159/- on the taxable value of Rs.2,05,39,712/- as shown in their balance sheet/ Trial Balance Sheet as advances received against the services for the said period. It was also observ....
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.... the penalty of Rs.10,000/- (Rs. Ten Thousand Only) imposed under Section 77(2) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 for contravention of Rule 7C of the Service Tax Rules, 1994 and Section 70 of the Finance Act, 1994; (iv) I impose the Penalty to Rs.9,53,294/- (Rs. Nine Lac Fifty Three Thousand Two Hundred Ninety Four Only) [9135+944159] under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017. However, the Noticee are at option to pay only 25% penalty and applicable Interest within 30 days of receipt of this order- in-original under section 78 of the Finance Act, 1994;" 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been disposed of as per the impugned order referred in para 1 above. 2.6 Aggrieved appellant have filed this appeal. 3.1 I have heard Shri Dharmendra Srivastava Chartered Accountant appearing for the appellant and Smt Chitra Srivastava, Authorized Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- Track Return Status as per CBIC website along with copy of ST 03 filed for the period of April 2017 to June....
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.... of Rs. 8,31,868/-was admissible to the appellant and payment of service tax discharged by them to the extent of this Cenvat credit is correct. However, I note that the audit of the records of the appellant was conducted on 18.12.2020 which subsequently resulted in issuance of show cause notice of demand of Rs.9,53,294/-. If the audit of the records of the appellant would not have been conducted by the audit team then the instance of non-pryment of service tax liability of Rs.9,53,294/- would not have been unearthed. Aiso, the appellant did not show any inclination in discharging his service tax liability until show cause notice was issued. This clearly shows that there was an intent to evade payment of due service tax liability on the part of the appellant. Further, it is on record that the due service tax liability was discharged by them on 04.03.2022 i.e. after a lapse of more than 4 years which makes them liable for payment of interest and penal provisions on account of delay in discharging this service tax liability. With respect to the appellant's Cenvat credit claim of Rs.1,35,606/- availed during the relevant period, I find that the appellant had shown....
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....after the decision of the Hon'ble Supreme Court in the case of Eicher Motors Ltd. v. Union of India (Supra), Sub-Section XXVIII is introduced in Section 37 to provide for Rules which empower the Government to make rules for not allowing credit to be utilised for payment of duty on excisable goods, by Section 131 of Finance Act, 1999. Therefore, after this amendment reliance by the appellants on the decision in the case of Eicher Motors Ltd. v. Union of India will not help them. If a manufacturer wants to avail the benefit of Modvat credit in respect of inputs used in or in relation to the manufacture of final product on payment of duty on such final products under Rule 57A of the Central Excise Rules, he should follow the procedure laid down under the Modvat Scheme. The contention of the appellants is that if on the inputs the manufacturer had already paid the duty on the basis that when the goods are utilised in the manufacture of final product then tax on these goods are to be adjusted and this right accrued to the manufacturer on the date when they paid the tax on the inputs. The right will continue till the facility is available. A manufacturer who is working under the Modv....
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.... Disagreeing with the said proposition, the Apex Court observed that a plain reading of the said sub-rule clearly shows that it applies to those cases where a manufacturer is seeking to take the credit after the introduction of the rule and to cases where the manufacturer is seeking to do so after a period of six months from the date when the manufacturer received the inputs. It was held that the said sub-rule operates prospectively in regard to those manufacturers who seek to take credit after coming into force of the rule. Agreeing with the Tribunal, the Apex Court has observed as follows :- "Therefore, in our opinion, the Tribunal was justified in holding that the rule in question only restricts a right of manufacturer to take the credit beyond the stipulated period of six months under the rule." 9. The ratio of the above judgment is that the said sub- rule is in the nature of period of limitation restricting the right of manufacturer to take the credit within the specified period of limitation and beyond the period of limitation, the benefit of said rule cannot be availed of by the manufacturer. 10. Having said as above, we may consider certain saluta....