AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 509
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.... (i) Not reversed CENVAT Credit amounting to Rs 4,79,059/- on the input invoices on which payments have been made after 3 months. (ii) Not discharged their liability of interest of Rs.42,989/- on delayed payment of Service Tax during 2015-16 to 2017-18. (iii) Taken excess CENVAT Credit of Rs.1,16,461/- in their ST-3 Return in the Financial Year 2017-18. (iv) Not discharged their liability of interest of Rs.4,148/- on delayed payment of Service Tax on rental bills. (v) Not discharged their liability of Service Tax of Rs.24,33,363/- on receipts against electricity and power backup charged through Diesel Generating Set [DG set] 4. Show Cause Notice dated [SCN] 19.04.2021 was issued. The Adjudicating Authority as well as the Appellate Authority confirmed the demand of CENVAT Credit as proposed in the SCN. Since the said amount of Rs.4,79,059/- was already deposited by the Appellant-Assessee, the same was appropriated. 5. He also passed the following order:- ORDER (i) I confirm the demand of CENVAT credit of Rs 4,79,059/under the provisions of Section 73 of the Finance Act, 1994 read with Rule 14 of CENVAT credit Rules 2004. Sin....
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....efore the First Appellate Authority and the learned Commissioner (Appeals) vide the impugned Order-In-Appeal rejected the appeal and upheld the Order-In-Original. Hence, the present appeal before the Tribunal. 7. I find that the Adjudicating Authority as well as the Appellate Authority has confirmed the demand of Rs.30,28,883/- towards excess claimed/inadmissible CENVAT Credit and short paid Service Tax under Section 73 of the Act read with Rule 14 of the CENVAT Credit Rules. It also demanded interest and equal penalty have been imposed under section 78 of the Act. Amount of Rs.6,42,657/- already deposited has been appropriated. 8. The learned Chartered Accountant appearing on behalf of the Appellant submitted that the Appellant had been holding Service Tax Registration and had been filing Service Tax Returns regularly. They are having an electricity connection and also having a DG set for power backup. It has been providing electricity to tenants through sub meters and had been raising separate invoices. Service Tax had neither been charged nor paid on the amount towards electricity charges. 9. It is his submission that electricity is goods and is not covered in the defin....
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....has consistently been held by the Hon'ble Supreme Court in the case of (i) State of Andra Pradesh Vs NTPC Ltd Reported in 2002 TIOL 107 SC-ST and (ii) Commissioner of Sales Tax Indore Vs Madhya Pradesh Electricity Board, Jabalpur reported in A.I.R 1970 S.C 732, that electricity is goods. Service Tax is payable on provision of service. The definition of service specifically excludes transfer of title in goods. 15. I also find that the issue regarding demand of Service Tax on supply of electricity is no more res integra. This issue has been dealt with by the Division Bench of the Tribunal in the case of M/s Shipra Estate Ltd & Jai Krishan Estate in Service Tax Appeal No.70795 of 2016 & Service Tax Appeal No.71101 of 2018 having Final Order No 70329-70330/2024. Relevant paragraphs are reproduced as under- "4.18 Issue No. 4 - demand of service tax on supply of electricity through DG Set. (i) The SCN had been issued demanding service tax on supply of electricity through D G Set for the period upto 3006-2012 (i.e. pre era of negative services). The learned Commissioner observed that it is not a simple sale of electricity generated by D G Set.....
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....E, Pune reported in 2013 (32) S.T.R. 427 has held that service tax cannot be charged on electricity charges collected from the tenants. Para 9 and para 10 of the said order reads as under:- "9. We have gone through the Lease Agreements. As per the terms and conditions of the Lease Agreements, the tenants have to pay electricity charges directly to the MSEB and the appellants are also providing electricity through generator set in case there is a power failure and the appellants are charging for the same. We find that electricity is specifically covered under Tariff Heading 27 of the Central Excise Tariff Act. We find that as per the provisions of Maharashtra Value Added Tax Act, 2002, electricity is also covered under Schedule A Sr. No. 20 and charged to Nil rate of tax. In view of this, we find the electricity is goods chargeable to duty under Central Excise Tariff as well as under the Maharashtra Value Added Tax Act, 2002. Therefore, the supply of electricity to tenant amounts to sale of goods and not supply of service. Further the Notification No.12/2003-S.T., dated 20-6-2003 exempt from Service Tax, any value of goods supplied by service provider to service recipient. ....
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....39;ble Supreme Court in the case of Pushpam Pharmaceuticals Company Vs. CCE, Mumbai 1995 (78) E.L.T. 401 (S.C.) made detailed observation for holding that extended period of limitation could not have been invoked. The relevant paras of the judgement are reproduced below for ready reference:- "16. Another ground for invoking extended period of limitation given in the impugned order is that the appellant was operating under self-assessment and hence had an obligation to assess service tax correctly and take only eligible CENVAT credit and if it does not do so, it amounts to suppression of facts with an intent to evade and violation of Act or Rules with an intent to evade. We do not find any force in this argument because every assessee operates under self-assessment and is required to self-assess and pay service tax and file returns. If some tax escapes assessment, section 73 provides for a SCN to 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 ....
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....heme of the Finance Act, 1994, the officer has been given wide powers to call for information and has been entrusted the responsibility of making the correct assessment as per his best judgment. If the officer fails to scrutinise the returns and make the best judgment assessment and some tax escapes assessment which is discovered after the normal period of limitation is over, the responsibility for such loss of Revenue rests squarely on the shoulders of the officer. It is incorrect to say that had the audit not been conducted, the allegedly ineligible CENVAT credit would not have come to light. It would have come to light if the central excise officer had discharged his responsibility under section 72. 21. This legal position that the primary responsibility for ensuring that correct amount of service tax is paid rests on the officer even in a regime of self-assessment was clarified by the Central Board of Excise and Customs7 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 Taxation8. The observation made in the con....