TaxTMI 
TaxTMI 
2026 (3) TMI 1532
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.... Account and other records tendered by the appellant, it was noticed that the appellant had not paid/short paid Service Tax amounting to Rs.14,22,561/- (inclusive of cess) in respect of advances received during the said period. It was also noticed that the appellant had not paid Service Tax amounting to Rs.15,703/- (inclusive of cess) as a receiver of legal consultancy service under reverse charge mechanism (RCM). Further scrutiny of the tendered documents also revealed that the appellant had not paid Service Tax amounting to Rs.64,909/- and Rs.48,775/-, inclusive of cesses, in respect of 'additional realization' and 'renting of immovable property service' respectively. 4. On the basis of the above audit observations, a Show Cause Notice dated 06.11.2017 was issued to the appellant asking them to show cause as to why: - a) (i) service tax (Inclusive of all cess) of Rs.14,22,561/- (Rupees fourteen lakh twenty-two thousand five hundred sixty one) only as detailed in para 2.1.0 above, should not be demanded and recovered from them in terms of Section 73(1) of the said Act read with Section 174 of the Central GST Act, 2017; (ii) Interest at appropriate rate on the ....
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....uently been paid by them through e-payment vide challan. No. 00033 dated 09/05/2017 should not be appropriated towards the demand; (ii) interest at appropriate rate on the demanded amount in sl. no. (d)(i) should not be paid by them in terms of Section 75 of the said Act read with Section 174 of the Central GST Act, 2017; (iii) penalty should not be imposed upon them on the service tax amount as demanded sl no. (d)(i) above, in terms of Section 78(1) of the said Act read with Section 174 of the Central GST Act, 2017; 5. The above Show Cause Notice was adjudicated by the Ld. Assistant Commissioner, C.G.S.T. & C.X., Tollygunge Divn., Kolkata South Commissionerate vide his Order-in-Original No. 26/CGST & CX/Chakraborty/Tollygunge Division/Kol(South)/1718 dated 06.02.2019 wherein the demands as proposed in the Notice have been upheld, along with interest and penalty. 5.1. The above order was appealed before the Ld. Commissioner (Appeals), who vide the impugned order dated 12.04.2024 has rejected the appeal, thereby upholding the demands as confirmed in the Order-in-Original dated 06.02.2019. In the impugned order, the Ld. Commissioner (Appeals) has held that the....
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....enefit like CENVAT Credit cannot to be denied merely on account of non-following of a procedure prescribed for availing such credit, the Ld. Counsel for the appellant has placed reliance on the following decisions: - i. M/s. Antares Services Pvt. Ltd. v. Commissioner of C.Ex., Chandigarh [Final Order No. 60023 of 2024 dated 25.01.2024 in Service Tax Appeal No. 60306 of 2022 - CESTAT, Chandigarh] ii. M/s. Faurecia Automotive Seating India Pvt. Ltd. v. Commissioner of C.Ex., Delhi-III [Final Order No. 60017 of 2025 dated 07.01.2025 in Excise Appeal No. 54097 of 2014 - CESTAT, Chandigarh] 6.1.1. In view of the above submissions, the Ld. Counsel for the appellant prays for allowing the above CENVAT Credit to them, which the appellant is otherwise eligible for, which would be sufficient to meet the Service Tax demand of Rs.14,22,561/- confirmed in the impugned order. 6.2. The Ld. Counsel for the appellant has also contested the above demand on the ground of limitation. Primarily, he points to the fact that the demand of Service Tax under dispute in this case has been made in respect of advances received by them for the period from April, 2012 to March, 2016 where....
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....the impugned order. 7. On the other hand, the Ld. Authorized Representative of the Revenue reiterates the findings in the impugned order. 8. Additionally, he pointed out that in the Orderin-Original dated 06.02.2019, the ld. adjudicating authority had also demanded interest from the appellant in respect of the Service Tax demands of Rs.64,909/- and Rs.48,775/- as mentioned under paragraphs (c)(i) and (d)(i) at page 11 of the order, which were paid by the appellant and appropriated by the ld. adjudicating authority in the Order-in-Original. He submits that the appellant has not paid interest on such amounts demanded under paragraph (c)(i) and (d)(i) of the order, which the appellant is liable to pay. 9. In rejoinder, the Ld. Counsel for the appellant submits that without prejudice to the other submissions made by them, they have agreed to pay the interest liability arising on account of such delayed payments of Service Tax of Rs.64,909/- and Rs.48,775/-. 10. Heard both sides and perused the records of the case. 11. I find that the appellant has mainly contested the demand of Service Tax of Rs.14,22,561/-, which has been raised on the advances received by them for the ....
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....ficient to meet the Service Tax demand of Rs.14,22,561/confirmed in the impugned order. I find that during the relevant period, the appellant has been rendering construction services. As per the documents available on record, the appellant has sub-contracted the construction service to M/s. Deepraj Construction Pvt. Ltd. For such construction services rendered on their behalf, M/s. Deepraj Construction Pvt. Ltd. raised invoice dated 16.04.2015 on the appellant, mentioning therein the Service Tax of Rs.15,49,940/. For better appreciation of the facts, the said invoice is scanned and reproduced below: - 13.1. A perusal of the above reveals that the appellant has paid Service Tax of Rs.15,49,940/-. I find that the above payment of Service Tax is not in dispute before me as the same has also been recorded by the ld. adjudicating authority in the Order-in-Original dated 06.02.2019. The appellant has categorically submitted that the above amount is entitled to them as CENVAT Credit, but inadvertently, they have not reported the same in the ST-3 Returns filed by them. I find that on this ground, the availment of the above CENVAT Credit for the purpose of payment of Service Tax liabilit....
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....ed 25.01.2024 in Service Tax Appeal No. 60306 of 2022 - CESTAT, Chandigarh]wherein, while deciding the very same issue, the Bench has observed as follows: - "6. I find that learned Commissioner finds that CENVAT credit on input and input services can only be availed within a period of six month or one year (w.e.f. 01.03.2015) from the date of invoice and in the instant case, time period of one year has already elapsed and moreover, the appellants have not claimed the CENVAT credit in theST-3 Returns. I find that the Tribunal in the case of Origin Learning Solutions Pvt. Ltd. (supra) held that CENVAT credit cannot be denied for the reason that such availment was not reflected in ST-3 Returns. I also find that Tribunal and High Courts have been consistently holding that a substantial rate of eligibility to CENVAT credit cannot be denied on the basis of procedural violations. In the instant case, it is not disputed that the appellants have availed the services; paid the service tax on the same and are in possession of documents indicating such availment. Under the circumstances, I am of the considered opinion that credit cannot be denied only because it has been utilized late....
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....f has arisen on the basis of scrutiny of the appellant's books of account and statutory records, which were duly maintained and produced before the Department, thereby negating any allegation of intent to evade tax. The conduct of the appellant does not reflect any mala fide so as to attract penal consequences under Section 78. In the absence of any positive act evidencing deliberate suppression or wilful misstatement, and particularly when the extended period of limitation has been held to be not invocable on the same set of facts, the imposition of penalty under Section 78 cannot be sustained. Moreover, it is a settled position of law that imposition of penalty is unwarranted in cases where the assessee is registered, maintains proper records, and substantially complies with tax obligations, including making voluntary payments. The Revenue has failed to bring on record any cogent evidence so as to establish the requisite mens rea. In view of the foregoing, I do not find any justification in the imposition of penalty under Section 78 of the Finance Act, 1994 in this case and hence, the same is aside in toto as being unsustainable both in law and on facts. 16. Regarding the issu....