AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 148
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....the (iii) Finance Act, 1994 read with sec. 174 of CGST Act, 2017. (iii) I impose penalty Rs.1,95,356/- (Rupees One Lakh Ninety-Five Thousand Three Hundred Fifty-Six Only) upon them under Section 78 of the Finance Act 1994 read with sec. 174 of CGST Act, 2017 for failure to pay service tax & suppressing the facts and value of taxable service with intent to evade payment of service tax. (iv) I impose penalty of Rs. 10,000/- upon them under Section 77(1)(c) of the Finance Act, 1994 for not furnishing documents/ information called by a Central Excise Officer in accordance with the provisions of the Finance Act, 1994 or rules made thereunder read with sec. 174 of CGST Act, 2017. (v) I impose penalty 10,000/- upon them under Section 77(2) of the Finance Act, 1994 for not filing of ST-3 return for the financial year 2015-16 read with sec.174 of CGST Act, 2017. 2.1 The Appellant was holding Service Tax Registration No.AHVPG2258ESD001 for providing taxable services (Business Auxiliary Service) as defined by Section 65B(44) read along with Section 66B of the Finance Act, 1994. 2.2 Information was received from the Income Tax Department that for the PAN No. AH....
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....the facts and value of taxable service with intent to evade payment of service tax. (iv) Penalty should not be imposed upon them under Section 77(1)(c) of the Finance Act, 1994 for not furnishing documents/ information called by a Central Excise Officer in accordance with the provisions of the Finance Act, 1994 or rules made thereunder read with sec. 174 of CGST Act, 2017. (v) Penalty should not be imposed upon them under Section 77(2) of the Finance Act, 1994 for not filing of ST-3 return for the financial year 2015-16 read with sec.174 of CGST Act, 2017. 2.6 The Appellant responded with reply dated 27.01.2021 & 24.03.2022. However, nobody appeared for personal hearing fixed on 07.12.2021, 08.02.2021, 21.03.2021, 25.07.2022 and 02.02.2023. 2.7 Show Cause Notice has been adjudicated as per Order-in Original referred in Para 1 above. Aggrieved Appellant filed appeal before Commissioner (Appeals) which has been dismissed as per the impugned order. 2.8 Hence this appeal. 3.1 I have heard Shri Abhinav Mishra, Advocate for the Appellant and Shri Santosh Kumar, Authorized Representative for the Revenue. 3.2 Arguing for the Appellant, learned Counsel submi....
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....e charge. In support the appellant have submitted the copy of registered deed of land and an affidavit. I find the above documents irrelevant and insufficient in order to evaluate the applicability of service tax on the services rendered by the appellant. 5.10 I find that the documents provided by the appellant are not adequate to extend any relief sought by them. The appellant has placed reliance only on the registered land deed and an affidavit. In this regard the relevant documents could have been the account statement, copy of agreement/ registration etc. which could have established the fact that the appellant had derived income from NJ India Invest Pvt Ltd., UCO Bank and Brahmavart Commercial Cooperative Bank to the tune of Rs. 1033624.54, 134738/-and 139959/- respectively in lieu of Mutual Fund Commission, Employment and as Recovery Agent Fees. I do find the same to be sufficient and adequate to exempt the services provided by the appellant. 5.11 I further note that it is undisputed that the appellant had provided taxable services for which they were liable to pay service tax on the taxable value. The appellant has sought relief by relying on the Notificati....
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....wn in the Income Tax Return of that particular period is tabulated below: S. No. Party Name Nature of Income Amount 1 NJ India Invest Private Limited Mutual Fund Commission 10,33,624.54 2 UCO Bank Employment 1,34,738.00 3 Brahmavart Commercial Co- operative Bank Recovery Agent Fees 2,39,959.00 GRAND TOTAL 14,08,321.54 From the above reply of the noticee, I observe that the notice has submitted details of income during the financial year 2015-16 is Rs.14,08,321.54/= whereas the data received from the income tax department, the total income as per ITR is Rs.13,47,285/-.Hence, the total value of Services provided by the notice does not match with data provided by the party. I am of the view that the value shown in ITR of Rs.13,47,285/- is taxable during the financial year 2015-16. No documents/evidence has been provided by the noticee which proves that the amount/income received against the particulars as they claimed. Hence, it is not possible to ascertain and correlate the amount received in F.Y. 2015-16 are of the same nature and period as they claimed. 17. The noticee has not submitted any ....
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....f the present case as the issue for consideration in that case was with regards to the liability of the distributor post amendment made by Notification No.7/2015. The Principal Bench of the Tribunal have already decided this issue. In the case of Om Sai Fabricators [(2023) 6 Centax 208 (Tri.-Bom)] the Bombay Bench of the Tribunal has held as follows:- "4.3 On merits we find that issue has been decided by larger bench of tribunal in the case of Melange Developers Private Limited [2020 (33) G.S.T.L. 116 (Tri. - LB) wherein larger bench has held as follows: "12. It is true that prior to 2007, various Service Tax, Trade Notices/ Instructions/ Circulars/ Communications had been issued exempting certain category of persons from payment of Service Tax. A sub-contracting Customs House Agent was exempted from payment of Service Tax on the bills raised on the main Customs House Agent. When an architect or interior decorator sub-contracted part/whole of its work to another architect or interior decorator, then no Service Tax was required to be paid by the subcontractor, provided the principal architect or interior decorator had paid the Service Tax. However, all these Trade ....
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....ut of which a portion has been given to a sub-contractor, then if a subcontractor is required to pay Service Tax, it may amount to 'Double Taxation', but this issue has to be examined in the light of the credit mechanism earlier introduced through Service Tax Credit Rules, 2002 granting benefit of tax paid on input services if the input services and the output services fell under the same taxable services and the subsequent amendment made on 14 May, 2003 granting benefit of tax paid on input services even if the input service and the output service belonged to different taxable categories. The aforesaid Service Tax Credit Rules were later superseded on 10 September, 2004 by Cenvat Credit Rules, 2004. Rule 3 of these Rules provides that a manufacturer or producer of final product or a provider of output service shall be allowed to take credit (known as 'Cenvat Credit') of various duties under the Excise Act, including the Service Tax leviable under sections 66, 66A and 66B of the Act. Rule 3(4) further provides that Cenvat credit may be utilized for payment of Service Tax on any output service. It is for this reason that the Master Circular dated 23 August, 2007 was ....
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....ntractor pays the tax. However, he submits that for the period circular issued late by the Board in 1997 was applicable and according to this Circular where the services have been provided by the sub-contractors such sub-contractors are not liable to pay service tax and service tax liability is on the main contractor. Taking note of the fact of the contention that main contractor has paid the service tax and charging service tax on the sub-contractor again would amount to taxing the same service twice and also taking note of the circular cited by the learned advocate and the decisions of the Tribunal cited, I find that if the appellant is required to pay the service tax it would amount to taxing the same service twice and the circular and the Tribunal's decision are squarely applicable to the facts of this case and accordingly appeal is allowed with consequential relief to the appellant." 18. In BCC Developers and Promoters Pvt. Ltd. it was observed : "6.1 We agree with the submission of the Ld. Counsel that no double taxation is permissible under the law. The Constitution (Article 265) provides to take the exact amount of tax i.e. neither more nor less. In th....
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....bility. 22. The decisions of the Tribunal holding that double taxation will not result if a sub-contractor discharges the tax liability because of the Cenvat Rules, now need to be referred to. 23. In Max Tech Oil & Gas Services Pvt. Ltd. v. Commissioner of Service Tax, Delhi, reported in 2017 (52) S.T.R. 508 (Tri. - Del.), the Division Bench has held : "6. Regarding the contention of the appellant that they have acted only as a sub-contractor and demanding service tax from them will amount to double taxation as the main contractor also is rendering similar service to ONGC, we find no legal basis for the contention of the appellant. The service tax leviable at the hands of each service provider is decided by nature of activities undertaken by them. If the same is covered by scope of the taxable entry under Finance Act, 1994 tax liability arises. The said service becomes part of final service rendered by main contractor is of no consequence to determine the tax liability of each and every service provider. If at all, the service tax paid by a sub-contractor which becomes part of service further provided by the main contractor, the scheme of credit as envisa....
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....ce being event of levy, self same service provided shall not be doubly taxable. If Service tax is paid by a sub-broker in respect of same taxable service provided by the stockbroker, the stock broker is entitled to the credit of the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same. In other words, if the main stock broker is subjected to levy of service tax on the self same taxable service provided by sub-broker to the stock broker and the sub-broker has paid service tax on such service, the stock broker shall be entitled to the credit of service tax. Such a proposition finds support from the basic rule of Cenvat credit and service of a sub-broker may be input service provided for a stock-broker if there is integrity between the services. Therefore, tax paid by a sub-broker may not be denied to be set off against ultimate service tax liability of the stock broker if the stock broker is made liable to service tax for the self same transaction. Such set off depends on the facts and circumstances of each case and subject to verification of evidence as well as rules made under the ....
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....Counsel for the Respondent regarding 'revenue neutrality' cannot also be accepted in view of the specific provisions of Section 66 and 68 of the Act. A subcontractor has to discharge the Service Tax liability when he renders taxable service. The contractor can, as noticed above, take credit in the manner provided for in the Cenvat Credit Rules of 2004. 30. Thus, for all the reasons stated above, it is not possible to accept the contention of the Learned Counsel for the Respondent that a sub-contractor is not required to discharge Service Tax liability if the main contractor has discharged liability on the work assigned to the sub-contractor. All decisions, including those referred to in this order, taking a contrary view stand overruled. 31. The reference is, accordingly, answered in the following terms : "A sub-contractor would be liable to pay Service Tax even if the main contractor has discharged Service Tax liability on the activity undertaken by the sub-contractor in pursuance of the contract." 4.4 Appellant do not challenge the above position and agree that the issue is squarely covered by the decision of larger bench of tribunal. H....
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....ellant have pressed the ground of bonafide belief and for that reason they rely upon the certificate issued to them by M/s Gammon. They also submit that there were conflicting views in the matter. However on query from the bench the counsel for appellant was unable to point out to a single decision available during the relevant period giving a contrary view. Further the submission to the effect that there were conflicting circulars is also not borne out by any evidence. Larger bench has in case of Melange Developer Pvt Ltd. clearly in para 12 noted that all Trade Notices/Instructions/Circulars/Communications were superseded by the Master Circular dated 23 August, 2007, and this circular had clarified the liability of sub contractor to pay the service tax. It is settled law that bona fide belief is not the blind belief and needs to be established. Hon'ble Bombay High Court has in case of Responsive Industries Ltd. [2019 (26) G.S.T.L. 457 (Bom.)] held as follows: "9. The contention that there was a bona fide belief that the Appellant are not liable to pay the service tax on outward transportation of goods and the GTA is not supported by any reasonable explanation. The bo....
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.... agreed that the service tax is included in his offer and so no claim whatsoever shall not be entertained in this regard & Gammon shall not be liable to pay the same." This condition clearly indicates that contract itself placed service tax liability on the appellant. In contradiction to specific provision of the contract, the submission of the appellant on the basis of the certificate issued by the M/s Gammon India only need to be negated. This condition in contract itself shows that appellant was aware of his liability to pay service tax. 4.12 The Appellant concealed the correct taxable amount with the service tax department, until the Departmental officers initiated an inquiry in this regard. These facts were suppressed with intent to evade the payment of service tax due on various taxable services provided by them thereby facilitating the evasion of service tax payable on the said services so rendered by them. Thus it the extended period, as provided for under the proviso to subsection (1) of section 73 ibid for recovery of such service tax not paid and/or short paid by Appellant has been correctly invoked by the revenue authorities. 4.13 For the facts as stat....
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.... Court in Chairman, SEBI v. Shriram Mutual Fund & Anr. [2006 (5) SCC 361] and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI's case (supra) and not in Dilip Shroff's case (supra). Therefore, the matter was referred to a larger Bench." After referring to a number of decisions on interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and held as follows : "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. "27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chai....