2025 (9) TMI 190

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....e Order-in-Appeal No.DDN/EXCUS/000/APP/25-27/2019-20 and No.DDN/EXCUS/000/APP/25-27/2019-20, both dated 20.06.2019 rejecting the appeal filed by the appellant, and allowing the appeal filed by the Department in respect of penalty imposed on the appellant by way of remand. 2. The appellant is manufacturer of biscuits and receives manpower recruitment/subway agency services, GTA service and Works Contract Service. The appellant also exports biscuits and for this purpose, have appointed commission agents abroad and paid commission to them in foreign exchange. The case of the Revenue is that the appellant was required to discharge service tax under Reverse Charge Mechanism as per Section 66A of the Finance Act, 1994, which provided that if s....

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....section in any taxing statute must be strictly construed and in case of any ambiguity it should be interpreted in favour of the assessee. This has been clarified in a number of judgments including the Constitution Bench judgment of the Supreme Court in Commissioner of Customs (Import) Vs. Dilip Kumar & Company. Paragraph 43 of the judgment is reproduced below: "43. There is abundant jurisprudential justification for this. In the Governance of rule of law by a written Constitution, there is no implied power of taxation. The tax power must be specifically conferred and it should be strictly in accordance with the power so endowed by the Constitution itself. It is for this reason that the Courts insist upon strict compliance before a ....

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....on where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the revenue, the aforesaid conclusions are expounded only as a prelude to better understand jurisprudential basis for our conclusion. We may now consider the decisions which support our view." 14. In the present case, the charging section which has been invoked for the period post 2012 does not exist at all and, therefore, there is no question of any ambiguity. Even if there is an ambiguity, it should go in favour of the assessee. 15. We have considered the judgments of the Bombay High Court in India Containers Ltd. and the Calcutta High Court in Unity Paints & Chemical Co. (P) Ltd. relied upon by the Revenue. In both these cases ....