TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1657
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....relevant document like sales ledger for the period October 2015 to August 2016, 26 AS return and trial balance as on 31.03.2016. The officers found that the appellant was already audited upto October 2015 and the audit report No. 727/2015-16 dated 30.03.2016 had been issued. The appellants are engaged in erection, commissioning and installation service, maintenance or repair service, manpower recruitment/ supply agency service and supply of tangible goods service. They had also provided service to M/s Samsung Engineering Co. Ltd. which is located in SEZ but they neither charged any service tax from them not submitted A-2 form as required under Notification No. 12/2013-ST dated 01.07.2013. The officers also observed that the appellant had, during the period, collected/ charged service tax from the clients but did not pay to the government. They had also received several services on which they were liable to pay service tax under reverse charge mechanism. 1.2. The officers recorded the statements of Shri S. Ebrahim Mohamed, Managing Director of the appellant on 23.04.2018, wherein he accepted the service tax liability of Rs.2,43,09,900/- upto July 2016. He also accepted the service ....
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....India and only, they received payment of Rs. 40 Lakhs in August 2017. Still an amount of Rs. 48.79/- Lakhs is to be paid by their client. Similarly their another client M/s Aneja Constructions India Limited had to pay an amount of Rs. 48.11/- Lakhs to them for the services. * Before the search carried out by the officers, they had paid service tax of Rs. 90.17 Lakhs which shows their intent to pay the pending tax. They have not acted dishonestly or contumaciously and therefore, not even a tax penalty could be justified. For imposition of penalty under Section 78, intention to evade payment of service tax should be established whereas in their case, it is only delayed payment of service tax and that too, on account of financial crunch. * As regards non-payment of service tax on reverse charge basis, it is also their loss as if they had paid the service tax amount, they could have availed the cenvat credit. * Regarding services provided to M/s Samsung Engineering Co. Limited, they could not procure form A-2 from the SEZ but still the benefit cannot be denied when there is no dispute about the company to whom services have been provided, being situated within the SEZ. * As per....
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....sputed period nor did the appellant filed ST-3 returns assessing their service tax liability which amounts to suppression of facts and shows mens rea on their part attracting penalty under section 78 of the Finance Act, 1994. He prayed for dismissing the appeal. 4. We have heard the rival submissions. We find that in this matter, liability to pay service tax and interest there on is not in dispute. As per the appellant, entire service tax liability alongwith interest has been paid by them, some before the investigation began and rest post issuance of show cause notice/ issuance of OIO. The party has also paid the late fee of Rs. 33,900/- on account of delayed filing of ST-3 returns for the period October 2015 to March 2016 and from April 2016 to September 2016. Therefore, the issue of imposition of equal penalty under Section 78 of the Finance Act, 1994 remains to be decided. 4.1 The provisions of Section 78(1) as existed during the material time are reproduced below: "78. Penalty for failure to pay service tax for reasons of fraud, etc. (1) Where any service tax has not been levied or paid, or has been short-levied or short-paid, or erroneously refunded, by reason of fraud or ....
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....o the show cause notice shows that the appellant had already paid service tax for the months of October, November and December 2015 even before the search of their premises by the officers. Also there was no short payment of service tax to be paid by the appellant under reverse charge mechanism for these three months as is clear from Annexure-A2. The reason for including these three months in the show cause notice are therefore, not very clear where there was no short payment. From the above, it is clear that there was no suppression or misstatement on the part of the appellant to pay service tax during the period indicated in the show cause notice. The appellant has clearly made out a case that they could not pay the service tax during the period because of financial crunch as two of their clients namely M/s Inox Wind Limited, Noida and M/s Aneja Constructions India Limited did not clear their bills. We therefore feel that ingredients to invoke provisions of section 78 in this case for imposing equal penalty are not present. Accordingly, imposition of equal penalty upon the appellant under Section 78(1) of the Finance Act, 1994 is not justified. However, there is no doubt about fa....
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....different provision, is by itself not sufficient to invalidate exercise of that power. Similar view was held by Hon'ble Bombay High Court in the case of CCE Aurangabad vs India Containers Ltd. reported at 2017 (355) ELT 326 (Bom.). Para 23 & 24 of the said decision is reproduced below: "23. The learned Counsel for the petitioner cited the judgment in the case of J.K. Steel Ltd. v. Union of India, 1978 (2) E.L.T. J 355 (S.C.), wherein it has been held that if the exercise of a power can be traced to a legitimate source, the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of the power in question. The learned Counsel for the petitioner further cited the judgment in the case of Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd., (2003) 9 SCC 234 = 1996 (82) E.L.T. 441, wherein it has been held that mere mention of a wrong provision of law when the power exercised is available even though under a different provision, is by itself not sufficient to invalidate the exercise of that power. 24. Thus, mention of wrong Rule in the demand notice would not be an impediment in the way of the petitioner in inflicting pen....