TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 334
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....06.2012. However, on omission of entry 12(a), Appellant became liable for payment of service tax w.e.f. 01.04.2015. It therefore, obtained Service Tax Registration for its various units; started paying service tax and filed ST-3 Returns regularly. Consequent to the audit of service tax records of the Appellant for the period from April, 2015 to June, 2017, a Show Cause Notice [SCN] dated 12.10.2020 was issued proposing to demand service tax amounting to Rs.3,10,762/- on various grounds and utilization of Cenvat credit Rs.68,749/-. It also invoked extended period of limitation under proviso to Section 73(1) of Finance Act, 1994. The Assistant Commissioner confirmed the said demand and imposed penalty under Section 77(2) as well as Section 78 of Finance Act, 1994. On appeal, the learned Commissioner (Appeals) reduced the demand to Rs.2,82,202/- and upheld the penalty under Section 77(2) as well as Section 78 of Finance Act, 1994. By way of this appeal, Appellant have challenged following demands:- (i) Short payment of Service Tax Rs.1,50,771/- (ii) Short payment on Works Contract Service Rs.62,682/- (iii) Cenvat Credit excess taken Rs.68,749/- Total = ....
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....x Rules, 1994, they were eligible to adjust the amount of excess service tax paid in the subsequent Return. (v) I find that the learned Commissioner in para 4.2.6 upheld the demand of Rs.1,50,771/- after observing that as per provisions of Service Tax Rules, the Appellant were required to claim refund in all such cases instead of suo moto adjustment of excess paid tax amount. (vi) I find that the learned Commissioner (Appeals) has not disputed the Appellant's contention that the tax amount of Rs.1,50,771/- had been paid in excess during September, 2015 to March, 2016. His only objection is that the Appellant should have claimed its refund instead of suo-moto adjustment of excess tax paid. Moreover, Rule 6(4A) of Service Tax Rules, 1994, provides that if an assessee has paid in excess of the amount required to be paid towards service tax liability, the assessee may adjust the amount so excess paid against the service tax liability for the subsequent period. I am of the view that claiming the refund and payment of tax at the time of filing ST-3 Return is only a revenue neutral exercise. I therefore, hold that the demand of Rs.1,50,771/- is not maintainable and the s....
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....915 1,37,849 Legal Service 1,400 - 1,400 GTA 1,953 679 2,632 Total 72,287 69,594 1,41,881 (iii) I find that during the period April, 2015 to March, 2016, Appellant had paid service tax of Rs.1,41,881/- on reverse charge basis and they were eligible to avail its credit. I further find that during the period from April to September 2015, Appellant had not taken or utilized Cenvat credit. Entire tax of Rs.1,87,798/- for the period April - September 2015 had been paid in cash. I therefore, hold that the Appellant had correctly availed Cenvat credit Rs.1,41,067/- and the demand of Rs.68,749/- is not maintainable and the same is liable to be set aside. Invocation of extended period of limitation (Issue No. 4). (i) For demanding service tax for the period from April, 2015 to June, 2017, the SCN has been issued on 12.10.2020. The entire demand is beyond the normal period of limitation. The learned Chartered Accountant submitted that the Appellant is a State Government undertaking; it has regularly been filing ST-3 Returns and have been paying service tax regularly. He relied upon the Final Order No.51088/2023 dated 21.08.202....
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....o be issued within the normal period of limitation. This provision will be rendered otiose if alleged incorrect self-assessment itself is held to establish wilful suppression with an intent to evade. To invoke extended period of limitation, one of the five necessary elements must be established and their existence cannot be presumed simply because the assessee is operating under self-assessment. 19. It has also been pointed out that but for the audit, the allegedly irregularly availed CENVAT credit would not have come to light. It is incorrect to say that but for the audit, the alleged irregular availment of CENVAT credit would not have come to light. It is undisputed that the Appellant has been self-assessing service tax and filing ST-3 Returns. Unlike the officers, the assessee is not an expert in taxation and can only be expected to pay service tax and file returns as per its understanding of the law. The remedy against any potential wrong assessment of service tax by the assessee is the scrutiny of the Return and best judgment assessment by the Central Excise Officer under Section 72. This Section reads as follows:- "72. Best judgment assessment. If any person....
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.... and Customs in its Manual for Scrutiny of Service Tax Returns the relevant portion of which is as follows: "1.2.1A The importance of scrutiny of returns was also highlighted by Dr. Kelkar in his report on Indirect Taxation. The observation made in the context of Central Excise but also found to be relevant to Service Tax is reproduced below: It is the view that assessment should be the primary function of the Central Excise Officers. Self-assessment on the part of the taxpayer is only a facility and cannot and must not be treated as a dilution of the statutory responsibility of the Central Excise Officers in ensuring correctness of duty payment. No doubt, audit and anti-evasion have their roles to play, but assessment or confirmation of assessment should remain the primary responsibility of the Central Excise Officers. (emphasis supplied) 22. Therefore, to say that had the audit not been conducted, the incorrect availment of CENVAT credit would not have come to light is neither legally correct nor is it consistent with the CBEC's own instructions to its officers." 7. Finally, the Division Bench allowed the appeal on limitation by summing up its obs....