TaxTMI 
TaxTMI 
2024 (12) TMI 1713
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Interest, at the applicable rates, against the party e on the amount of CENVAT credit, mentioned at (i) above, under the provisions of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 75 of the Finance Act, 1994; (iii) I impose a penalty of Rs.89,63,694/- (Rupees Eighty Nine Lakhs Sixty Three Thousand Six Hundred Ninety Four only) upon the party under the provisions of Rule 15 of the CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act,1994 for the above said amount of irregular availment of CENVAT credit and related contraventions (iv) I confirm the demand of the service tax total amounting to Rs.2,99,38,158/- (Rs. Two Crores Ninety Nine Lakhs Thirty Eight Thousand One Hundred Fifty Eight only) [Rs. 18,19,544/- (as per para 5.3 & its sub-para 5.3.3 above) + Rs. 7,80,,46, 267/- (as per para 5.5 & its sub-para 5.5.7 above) + Rs.61,800/- (as per para 5.8 & its sub-para 5.8.3 above) + Rs.1,00,10,547/- (as per para 5.9 & its sub-para 5.9.4 above)], out of total demand of the service tax of Rs.6,00,94,195/- proposed in the show cause notice, against the party in terms of the proviso to Section 73(1) of the Finance Act, 1994. (v) I ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y under the provisions of Section 73 and Section 75 of the Finance Act, 1994; (iii) the service tax amounting to Rs. 1,53,02,435/- (Rupees One Crore Fifty-Three Lakhs Two Thousand Four Hundred Thirty-Five Only) for the period 2010- 11 to 2014-15 is liable to be demanded and recovered from the said party, along with accrued amount of interest, respectively under the provisions of Section 73 and Section 75 of the Finance Act, 1994; (iv) the CENVAT credit in total amounting to Rs. 49,33,808/- (Rupees Forty Nine Lakhs Thirty Three Thousand Eight Hundred Eight Only), so wrongly availed and utilized by the party during 2010-11 to 2014-15, is liable to be demanded and recovered from them, along with accrued amount of interest under the provisions of Rule 14 of the CENVAT Credit Rules, 2004 read with provisions of Section 73 and Section 75 of the Finance Act, 1994; (v) the CENVAT credit in total amounting to Rs.40,29,886/- (Rupees Forty Lakhs Twenty Nine Thousand Eight Hundred Eighty Six Only), so wrongly utilized by the party during 2010-11 to 2014-15, is liable to be demanded and recovered from them, along with accrued amount of interest, under the provisions o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd utilization of CENVAT credit (Rs. 40,29,886/-) which was never reflected in the ST-3 returns; ⮚ claiming certain services to be exported (Rs 1,80,46,267/-); ⮚ wrongly claiming the benefit of exemptions which was not available to them (Rs 1,64,97,099); ⮚ not paying service tax on legal expenses (Rs. 66,485) and car hire expenses (Rs. 1,09,562/-) ⮚ not paying service tax on sponsorship services (Rs. 61,800/-) came to the knowledge of the department only during the course of the subject detailed scrutiny of returns and said fact was never revealed by the said party on their own accord. As is obviously evident, this willful suppression on the part of them was with their sole intention to contravene the said relevant provisions of the said Rules and the Act and consequently to not pay the said amount of the service tax and accordingly the provisions of extended period of time limitation are appropriately invokable in the instant case. It is further apparent on record that the periodical ST-3 returns for the period 201011 have been filed on 22.01.2013 while the ST-3 return for the period April, 2011 to September, 2011 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (Rupees Ninety Five Thousand Nine Hundred Only), so not paid by the party during the period 2010-11 to 2014-15, should not be demanded and recovered from them under the provisions of Section 70 (1) of Finance Act, 1994. 2.6 The show cause notice has been adjudicated as per the impugned order. Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Sanjay Kumar, Advocate for the appellant and Shri Santosh Kumar, Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submits that;- ⮚ Details of the demand confirmed and dropped by the impugned order is as in table below: Service tax/CENVAT Credit demand Particulars Period Proposed Dropped Confirmed Late filing fees: for late filing of various ST-3 Returns (a) 2010-11 to 2014-15 95,900 95,900 Service Tax payable (Statutory liability, shown as payable in Balance Sheet) 1,53,02,435 1,34,82,891 18,19,544* Exports made by the appellant (due to non-production of documentary evidence) 1,80,46,26....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he relevant documents could not be produced at the time of audit and the same because the appellant has shifted its office at the time of audit. ⮚ The exports made by the appellant are not liable to be taxed under the provisions of the Finance Act, 1994. The appellant has provided legal services to the clients outside India and has received payment in convertible foreign exchange. Accordingly, the appellant has considered the services as export and has neither charged nor paid service tax on the same. Hence, the service tax liability of Rs. 1,80,46,267/- is liable to be dropped on this ground alone. ⮚ A reconciliation of the gross receipts in the financial statements with the ST-3 receipts reveals no discrepancy/ difference in the financial statements with the ST-3 receipts is on account of miscellaneous/ other income which is not subject to service tax. The detailed reconciliation along with the nature of such income supported by a Chartered Accountant's (CA) certificate, verifying the nature of income is enclosed. Consequently, the alleged service tax shortfall of Rs. 1,00,10,547/- is unfounded and should be dropped. ⮚ Service t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dings have been recorded in the impugned order: "5.4. As regards allegation levelled in the show cause notice regarding wrong availment and utilization of the CENVAT credit of input services total amounting to Rs. 89,63,694/- (Rs. 49,33,808/- + Rs.40,29,886/-), it has been alleged that the party has shown an amount of Rs.49,33,808/- as input CENVAT credit availed/taken in their ST-3 returns of the period 04/2011 to 03/2013 and the same has also shown as utilized towards payment of duty therein, but they failed to produce/provide any documentary evidence as regard to the availment and utilization of such CENVAT credit in the relevant ST-3 returns. It was further alleged that the party had paid part of its service tax liability amounting to Rs.40,29,886/- from the CENVAT credit in spite of having no CENVAT credit in their balance as shown in the ST-3 returns for the period 04/2010 to 06/2012. Moreover, they also failed to produce/provide any documentary evidence as regards to the availment & utilization to the said amount of CENVAT credit shown as utilized despite having no balance in their CENVAT account. In this regard, I find that the party has failed to provide documenta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of the following documents, namely :- (b) an invoice issued by- (i) a manufacturer or a service provider for clearance of- (i) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by on behalf or of the said manufacturer,; (ii) inputs or capital goods as such; (ii) an importer, (iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules,2002; (iv) a first stage dealer or a second stage dealer, as the case may be, in (i) terms of the provisions of Central Excise Rules, 2002; or (c) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 ...... (bb) a supplementary invoice, bill or challan issued by a provider of output service, in terms of the provisions of Service Tax Rules, 1994 except where the additional amount of tax become reco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e original CENVAT documents on the basis of which they had claimed to avail and utilize the impugned CENVAT credit for verification during the course of adjudication proceedings by the jurisdictional Range Superintendent as he was assigned the job of verification of the same. In this regard, the jurisdictional Range Superintendent at para (iv) of his report dated 27.11.2018 reported as under: "(iv) As per the SCN, the party had not produced the cenvat credit documents involving an amount of Rs. 49,33,808/- and Rs.40,29,886. However, the party alongwith their defence reply has submitted the photocopy of the cenvat credit documents. As the photocopy is not a valid document for claiming cenvat credit as per Rule 9(1) of the Cenvat Credit Rules, 2004, a letter dated 17.10.2018 was written to the party to produce the original documents on which the said cenvat credit has been availed. However the party failed to produce the same, as such the verification of the same cannot be done at this end." 5.4.6. In view of the above, it is apparent that the party has failed to produce the original CENVAT documents on the basis of which they have claimed to avail and utilized the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the same is liable to be recovered from them alongwith applicable interest in terms of Rule 14 of the CENVAT Credit Rules, 2004 read with provisions of Section 73 and Section 75 of the Finance Act, 1994 respectively. 4.4 Hon'ble Jammu and Kashmir High Court has in the case of Shivam Electrical [2018 (359) E.L.T. 46 (J & K)] observed as follows: 6.We have considered the submissions made by learned counsel for the parties and have perused the record. The relevant extract of Rule 9 of the Cenvat Credit Rules, 2004 reads as under : The "(1) Cenvat credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely.- An invoice issued by : (a) (i) ----- ----- Explanation. - For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under Section 3 of the Customs Tariff Act;" From perusal of the explanation, it is evident that the expression supplementary invoice used....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... apparently gives discretion to the adjudication authority to ascertain whether tax due on inputs and input service has actually been paid and such input or input service has actually be used or is to be used in the manufacture of final products or in providing output service as the case may be, and if satisfied in this regard, to give necessary concession to the assessee in relation to any procedural irregularity in relation to maintenance of documents on the basis of which cenvat credit can be availed. Obviously before ascertaining the liability of the assessee under Cenvat Credit Rules, the adjudicating authority is expected to apply its mind to this aspect of the matter and thereafter to arrive at the final conclusion about liability of the assessee in this regard. The impugned order does not disclose any such exercise having been done by the adjudicating authority. In the result, in view of the same, the impugned order is liable to be set aside and the matter to be remanded to the adjudicating authority to decide the same afresh." 4.6 In case of JMC Projects India Ltd [(2023) 4 Centax 321 (Tri.-Ahmd)] Ahmedabad bench has observed as follows: "4. We have considered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the show cause notice that the party has not provided/produced any documentary evidence in respect of claiming exemption on the exported services neither to the audit team at the time of audit of their unit nor to the jurisdictional Range Superintendent despite repeatedly requested by him through several correspondences. The details of export of services for the period 2010-11 to 201415 as claimed by the party in their ST-3 returns of the relevant period as per the show cause notice are as under: Period Exports Rate Of Service Tax Service Tax Payable 04/2010-09/2010 3,05,18,443/- 10.30% 31,43,400/- 10/2010-03/2011 3,81,83,716/- 10.30% 39,32,923/- 04/2011-09/2011 2,59,01,241/- 10.30% 26.67,828/- 10/2011 03/2012 1,53,89,586/- 10.30% 15,85,127/- 04/2012 06/2012 4,28,293/- 12.36% 52,937/- 07/2012 09/2012 0 12.36% 0 10/2012 03/2013 0 12.36% 0 04/2013-09/2013 1,44,72,944/- 12.36% 17,88,856/- 10/2013 03/2014 81,17,354/- 12.36% 10,03,305/- 04/2014 09/2014 1,32,08,818/- 12.36% 16,32,610/- 10/2014 03/2015 1,81,17,161/- 12.36% 22,39,281/- Total ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....S per this office records, no SCN has been issued to the party on the exemption claimed on account of export of services by them during the year 2010 to 2012. Accordingly, a letter dated 17.10.2018 was written to the party to produce export related documents for the year 2010-11 and 2011-12 which were not-submitted earlier. Till date the party has not submitted the required documents, as such the verification of the same cannot be done at this end." In view of the above report, it is apparent that no show cause notice as regard to the exemption on account of export of services claimed by the party for the period 201011 to 2011-12 has ever been issued to them by the department. Moreover, the party has neither provided the detail of any such show cause notice nor provided the acknowledged copy of the said defence reply in support of their claim. Therefore, the party's claim that they had already provided the export documents relating to export of input services during the period 2010-11 to 2011- 12 to the department is a false premise and thus clearly an afterthought in order to cover up their wrongdoing. Therefore, I hold that they have wrongly and illegitimately availe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er Export of Services Rules, 2005. Further, it is apparent from the chart that a co-relation between export invoice and export realization cannot be done (iii) The party had submitted the copies of the export invoices and bank statement made during the year 201314& 2014-15 with their defence reply alongwith a chart of details of export. The relevant Bank Realisation certificates/Foreign Inward Remittance Advice were not submitted by the party. On scrutiny of the documents submitted by the party, it has been noticed that the party has provided legal consultancy service in India to foreign clients. On the basis of the chart provided by the party, details enclosed as Annexure `B` and 'C` have been prepared and found that: b) The detail of the clients from whom the payment was received has not been mentioned in the bank statement. c) The invoice nos. against which the payment has been received are not mentioned. d) The amount of bill raised in foreign currency does not tally with the amount of foreign currency received as shown in their bank statement. e) In many cases either the export invoice or the payment receipt details are not made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the fact. 5.5.7. In view of the above discussion, it is clear that the party is failed to pay the service tax amounting to Rs.1,80,46,267/- (Rs.1,13,29,278/- + Rs.67,16,989/-) on the value of output services of Rs.16,43,37,556/- declared in the ST-3 Returns for the period 2010-11 to 2014-15 as export of services, for which they failed to substantiate their claim of export with proper documentary evidences. I, therefore, hold that the party is liable to pay service tax amounting to Rs.1,80,46,267/- on the value of output services of Rs.16,43,37,556/- during the period 2010-11 to 2014-15 in terms of provisions of Rule-6 of the Service Tax Rules, 1994 read with Section 68-of the Finance Act, 1994 and accordingly, the same is liable to be recovered from them with interest in terms of the provisions of Section 73 and Section 75 of the Finance Act, 1994 respectively. 4.9 From the above it is evident that benefit of "Export of Service' has been sought to be denied on the basis of verification report given by the range officer to the adjudicating authority. The entire benefit as claimed is sought to be denied for the reason that co-relation cannot be established between invo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance Act,1994 during the period 2010-11 and 2011- 12 which reads as under: "Taxable service means any service provided or to be provided to any person, by any other person receiving sponsorship, in relation to such sponsorship, in any manner" Further, the Section 65(99a) of the Finance Act, 1994, applicable during the relevant period define the term 'sponsorship' as under: 'Sponsorship" includes naming an event after the sponsor, displaying the sponsor's company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition; but does not include any financial or other support in the form of donations or gifts, given by the donors subject to the condition that the service provider is under no obligation to provide anything in return to such donors. Further, Rule 2(d)(vii) of the Service Tax Rules, 1994, as applicable during the relevant period reads as under: "(d) person liable for paying the service tax means (vii) in relation to sponsorship service provided to any body corporate or firm located in India, the body corporate or, as the case may be the firm who r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....old the demand made on this account. 4.12 In respect of demand made on account of reconciliation made between the entries in the Financial Records with the entries in ST-3 return the impugned order records the findings as follows: 5.9. It has been further alleged in the show cause notice that the party has evaded payment of service tax amounting to Rs.1,00, 10,547/- involved on the differential amount of receipts amounting to Rs. 8,18,12,038/- as shown in the ST-3 Returns and as reflected in the Balance Sheets for the period 2010-11 to 2014-15 by suppressing actual the value of services in their ST-3 Returns of the said period as detailed below: Period ST-3 Returns (Half Yearly) ST-3 Returns (Financial Year wise) As per Balance sheet and Profit and Loss account Difference between Gross Receipts as shown in ST-3 return and as being reflected in Balance sheet Service Tax Rate Service Tax payable on differential amount 04/2010 - 09/2010 9,84,06,461 18,33,19,32 8 18,82,42,70 5 49,23,377 10.3 5,07,108 10/2010 - 03/2011 8,49,12,867 04/2012 - 06/2012 2,50,92,840 6,06,26,614 11,90,73,19 6 5,84,46,58 2 12.36 72....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re, if the said receipts reflected in their balance sheet is varied from the Gross receipt figures as provided by the party in their ST-3 return, it should be supported by proper documentary evidences, which the party has failed to provide. Further, the submission made by the party in the said letter that 'Client Adjustments' and 'Prior Period Adjustment includes previous year's adjustments towards revenue earned/ received for services provided in relation to export of services, exempted services and legal (domestic) and miscellaneous services provided by them, is also not supported by any documentary evidence to challenge the taxability of the said receipts so received by them. In any case, such Gross Receipt figures reflected in their Balance sheet should also be reflected in their ST-3 returns irrespective of whether such receipts where in relation to export of services, exempted services and legal (domestic) and miscellaneous services provided by them and if they did not do that, they should have provided valid reasons duly supported by the proper documentary evidences, which they failed to do in the instant case. 5.9.3. In view of the above discussion,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evant period, is the consideration received by then in the course of provision of taxable service and hence liable to service tax in terms of the provisions of Rule 6 of the Service Tax Rules, 1994 read with Section 68 of the Finance Act, 1994. I, therefore, find that the party has evaded payment of service tax amounting to Rs.1,00,10,547/- by contravening the provisions of Rule 6 of the Service Tax Rules, 1994 read with Section 68 of the Finance Act, 1994. Accordingly, I hold that the service tax amounting to Rs.1,00,10,547/- is liable to be recovered from them with interest in terms of provisions of Section 73 and Section 75 of the Finance Act, 1994 respectively. 4.13 Appellant have contested this demand stating that they have along with the appeal filed an Annexure F, a detailed reconciliation chart along with the nature of income duly supported by a Chartered Accountant Certificate (Annexure G). However no such document is available in the file. In absence of any such document to explain the differences between the figures in ST-3 return we do not find any merits in the submissions made by the appellant. Impugned order has carefully analyzed the nature of the receipts which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se it is not disputed that the party had claimed exemption of service tax in respect of export and other exemptions, therefore, it is apparent that the gross value of such exempted services declared by the party in the invoices and the ST-3 returns do not include the service tax. Thus, in terms of the aforesaid provisions of Section 67(2) of the Act, ibid, such value cannot be treated as the cum service tax price. 5.11.3. In support of my above contention, I would like to place reliance on the judgement of the Hon'ble Tribunal passed in the case of Shakti Motors Vs Commissioner, Service Tax, Ahmedabad [2008 (12) STR 710 (Tri. Ahmad.) wherein the Hon'ble Tribunal has observed that "if the invoice does not specifically say that the gross amount charged includes service tax, it cannot be treated as cum-service tax-price. Therefore, in the absence of any-evidence to-show that -invoices had indeed been prepared in this manner, cum tax value benefit cannot be extended". Further the Hon'ble Apex Court in the case of M/s Amrit Agro Industries Ltd. Vs. CCE. Ghaziabad [2007 (2010) ELT 183 (SC)] has held that unless it is shown by the manufacturer that price of goods incl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of excise is paid. Therefore, unless it is shown by the manufacturer that the price of the goods includes excise duty payable by him, no question of exclusion of duty element from the price for determination of value under section 4(4)(d)(ii) will arise." 5.11.4. In view of the above discussion, the ratio of judgement of Hon'ble Apex Court in the case of CCE Vs Maruti Udyog Ltd., reported in 2002 (49) RLT1 (SC) and Sri Chakra Tyres reported in 1999 (108) ELT 361 and the other judgements relied upon the party in support of their contention is clearly distinguished in the instant case as the factual position and circumstances of the case involved in these judgements are entirely different from the facts & circumstances involved in the present case. It is a settled position in law that facts of a decision relied upon have to be shown to fit the factual situation of a given case and without such discussion reliance could not be placed on a decision. The Hon'ble Apex Court in the case of Ambica Quarry Works v. State of Gujarat & others reported in 1987 (1) SCC 213, observed that "the ratio of any decision must be understood in the background of the facts of that case. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y setting aside this part of the order of Commissioner (Appeals). The original authority shall give adequate opportunity of hearing to the assessee and consider the relevant records which may be produced by the assessee before passing the order afresh in this regard." Thus in view of the above the benefit of cum tax can be denied when it can be established that the gross amount was not inclusive of service tax payable. For the purpose of ascertaining the same the matter needs to be remanded back to original authority. 4.16 Impugned order records findings as follows on limitation: 5.12. I now take up the issue of extended period of demand, which was proposed to be invoked in the impugned show cause notice. In this regard the party has contended that invoking of larger period, under the proviso to Section 73 (1) of the Finance Act, 1994 is not at all warranted in the present case and the present SCN is time barred; the proviso of Section 73(1) of the Act ibid during the referred period is not applicable in the present case as there was no willful suppression of facts on the part of assessee, even, the department was very well aware of the activities of the assessee as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvice tax within five year from the relevant date 5.12.3. Further, as alleged in the impugned show cause notice that the said willful and deliberate non-payment of due amount of service tax and wrong availment of the CENVAT credit come to the knowledge of the department only during the course audit of records of the party and evidently the same was never revealed by the party on their own accord. Therefore, the provisions of extended period of five years as provided for under the proviso to Section 73 of the Finance Act, 1994 is invokable in this case for suppressing the material facts from the department. The Section 73 of the Finance Act, 1994, as amended provides that, where any service tax has not been levied or paid or has been short-levied or short-paid by reasons of fraud, collusion, willful misstatement, suppression of facts, or contravention of any of the provisions of this Chapter or of the rules made there-under with the intent to evade payment of the service tax, the Central Excise Officer may, within a period of 5 years from the relevant date serve notice on the person chargeable with the Service tax, which has not been levied or paid. The various case laws re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... from the department by not disclosing all the material facts required for verification with the intention to evade payment of the service tax. Accordingly, I hold that the extended period of limitation is applicable in terms of proviso to Section 73(1) of the Finance Act, 1994. 5.13. The party has further contended that the demand of the service tax for the period 01.04.2010 to 31.03.2013 is time barred. In this regard, I find that the impugned notice was issued to them on 20.12.2016 subsequent to audit of their records in March, 2014. As per proviso to Section 73(1) of the Finance Act, 1994, the department has- time limit of five years for issue of show cause notice from the "relevant date" in case the provisions of the Act, ibid have been contravened with the intent to evade payment of tax. The provisions defining "relevant date" are contained in Clause (6) of the Section 73 of the Finance Act, 1994, which reads as under: "(6) For the purposes of this section, "relevant date" means, (i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid - (a) where under the rules m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g a question of fact, the same is to be established in the facts of each case and not merely by showing the availability of an alternate scheme; (b) Where the scheme opted for by the assessee is found to have been misused (in contradistinction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence; (c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods; (d) We express our opinion in favour of the view taken in the case of M/s. International Auto Products (P) Ltd. (supra) and endorse the proposition that once an assessee has chosen to pay duty, he has to take all the consequences of payment of duty. 4.18 The demand of interest will follow the confirmation of the demand. Impugned order records plethora of case law which hold so and we do not have any reason to hold to the contrary. Thus demand of interest in terms of Section 75 is justi....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., which is similar to Section 78 under Finance Act, 1994, penalty under Section 78 is mandatory unless duty, interest and penalty to he extent of 25% have been paid. (UOI vs. M/s Dharmendra Textile Processors reported in 2008 (89) RLT103 (SC-LB) =2008-TIOL192-SC-CX- LB.). Therefore penalty under Section 78 is also mandatory and appellants have not made out a case for exercise of discretionary power under Section 80 of Finance Act, 1994". CCE, Vapi VS Ajay Sales Agencies reported in 2009 (013) STR 0040 (Tri. Ahmd.), wherein it has been held that in Para 3 of the judgment " .... I find considerable force in the arguments advanced by learned SDR on behalf of the Revenue and I also find that the judgment of Larger Bench ETA Engineering Ltd, v. CCE, Chennai, 2006 (003) STR 429 = 2004 (174) ELT 19 cited by leared SDR in support of his argument about the penalty under Section 76 is relevant and therefore, the penalty under Section 76 has to be enhanced to Rs. 3,26,329/-. As regards mandatory penalty under Section 78, penalty of 100% is minimum and mandatory and therefore the penalty of Rs. 1,000/- imposed and upheld by the lower authority has to be enhanced to Rs. 3,26,329/-. How....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Finance Act, 1994 are present in a case, the discretion to quantify the amount of penalty ends. I am placing reliance upon the case of Union of India Versus Rajasthan Spinning & Weaving Mills (2009(238) ELT 0003(SC)) wherein the apex court held "..... though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the Section, once the Section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under Sub-section (2) of Section 11A." 5.15.4. Accordingly the case laws cited by the party in support of their contentions have lost their relevancy in view of the above facts Further, - would like to place reliance in the case of Collector of Central Excise, Calcutta Vs M/s Alnoori Tobacco Products 2004 (170) ELT 135 (S.C).) decided by the Hon'ble Supreme Court of India wherein it was held that courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. The relevant paras of the said case are re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tilized irregular CENVAT credit with the intent to evade payment of service tax and accordingly, I hold that they are also liable to penal action under the Rule 15 of the CENVAT Credit Rules 2004 5.16. The party has also contended that as per the provisions of the Section 80 of the Finance Act,1994, no penalty shall be imposed under Section 76, Section 77 or Section 78 if the assessee proves that there was reasonable cause for said failure, in context of the penalty provisions the term reasonable cause would mean a cause which is beyond the control of assessee. In this regard, As discussed supra that there are ample evidences against the party, which is going to prove that they knowingly and deliberately did not pay the due service tax with the intent to evade payment of the service tax by resorting to suppression and mis-declaration. They have intentionally and willfully suppressed the actual value of taxable services provided by them and did not disclose the material facts by itself through the prescribed statutory ST-3 returns, whereby the said values have escaped appropriate assessment for levy and payment of the service tax. I further find that even during the course ....