TaxTMI 
TaxTMI 
2026 (5) TMI 1587
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....s were raised vide letter dated 14.03.2012, to which the appellant duly responded on 02.05.2012, accepting certain liabilities while contesting others. Thereafter, summons were issued, statements were recorded. 1.2. Subsequently, the department issued a show cause notice vide V-30/Pat/SCN-Cell/ST/Adjn/12/8610 dated 23.10.2013 (herein after referred as "SCN I"), proposing a demand of service tax amounting to Rs. 1,31,10,942/- for the period 2008-09 to 2011-12. The appellant filed a detailed reply dated 18.12.2013 contesting the allegations on facts and law. 1.3. Later, another SCN was issued vide V26/Pat/SCN-Cell/ST/Adjn/2014/9351 dated 16.10.2014 (herein after referred as SCN II), for the period 2009-10 to 2012-13, demanding service tax (incl cess) amounting to Rs. 7,91,13,437/-. The demand made in the SCN II covered the period from 2009-10 to 2012-13, which significantly overlapped with the period already covered under SCN I, namely 2009-10 to 2011-12. The appellant duly filed a reply to SCN II on 15.12.2014. The second notice sought to re-examine and re-demand tax for the very same period already subject matter of the earlier notice. 1.4. Thereafter, the adjudicating aut....
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....Demand amounting to Rs. 57,23,533/- has been confirmed on the alleged suppression of taxable value during the Financial Years 2009-10 to 2012-13 on account of difference between ST-3 and the values declared in the financial statements. In this regard, appellant submits that during the relevant period, i.e., F.Y. 2009-10 and 2010-11, service tax liability arose only upon actual receipt of consideration and not on accrual basis. Thus, service tax is not payable on amounts charged in the bills/invoices, but on the amount actually received. It is a settled legal position that financial statements are prepared on an accrual basis, whereas service tax returns for the said period were filed on a realization basis. Thus, the appellant submits that the Learned Adjudicating Authority has erred in treating the book turnover as the taxable value without excluding unrealized income. 3.1. The appellant further submits that they are engaged in providing taxable services under the category of Goods Transport Agency (GTA) service. It is submitted that transportation of goods by road was taxable under the service tax regime. However, as per Rule 2(1)(d)(v) of the Service Tax Rules, 1994, the liab....
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....r the service rendered before 24.02.2009. Thus, the demands confirmed on this count is not sustainable. 5. Demand amounting to Rs. 4,88,183/- has been conformed on the allegation of non payment of service tax from advances received from the customers during relevant period. In this regard, the appellant submitted that there are two types of advances on which demand has been confirmed. 5.1. Amount of Rs. 6,00,000/- received on account of unsecured loans. It is submitted by the appellant that the said amount has been received by appellant as an unsecured loan. Hence the liability under service tax law would not arise at all. The appellant submitted a confirmation and relevant ledger at the time of investigation as well as adjudication. 5.2. Amount of 39,61,658/- received as an advance for providing GTA service: The Applicant submits that during the relevant period, certain advances aggregating to Rs. 39,61,658/- were received, on which service tax liability amounting to Rs. 4,26,383/- has been confirmed in the Order-in-Original. Accordingly, no service tax liability would arise at all. 6. Demand amounting to Rs. 14,12,523/- has been confirmed on the allegation of non-paym....
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....ordingly, such reimbursements cannot form part of the taxable value for the purpose of levy of Service Tax. 7. Demand amounting to Rs. 5,589/- has been confirmed on the allegation of Non-payment of service tax on Detention Charges. It is submitted that the detention charges collected by the Appellant are not liable to service tax as the same are in the nature of penal charges and do not constitute consideration for any taxable service. 8. Demand amounting to Rs. 17,88,258/- has been confirmed on the allegation that some of invoices based on which Cenvat Credit was availed by the appellant are not in appellant's name. It has been alleged in the Show Cause Notice that the Appellant has wrongly availed CENVAT Credit amounting to Rs. 17,88,258/- on the basis of invoices which were not issued in the name of the Appellant company. It has been alleged that the disputed invoices were issued in the names of entities such as Scorpion Express, Scorpion Logistics, Scorpion Courier, Scorpion Cargo, as well as in the names of certain individuals namely Mr. Prakash N.A. Singh, Ms. Jyoti P. Singh, Ms. Shalini J. Singh, Mr. Anil Tiwari, Mr. Vijay Rahate, etc., and therefore the credit availed....
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....lable with them for verification. In support of this claim, the appellant enclosed a CA certificate as well as some sample invoices for perusal. The department has nowhere disputed the availment of such cenvat credit and utilization of the same in relation to their business. In view thereof, the allegation that the Cenvat credit has been irregularly availed solely on the basis of photocopies of invoices is unsustainable both in law and on facts. 10. Demand amounting to Rs. 5,16,465/-has been confirmed on the allegation of irregular Cenvat Credit on the basis of non-production of invoices. The appellant submits that the original invoices, books of accounts and financial statements of the Appellant were duly audited and certified by an independent Chartered Accountant in accordance with the applicable statutory requirements by the way of verification of these invoices as well as related documents. The Chartered Accountant has duly verified and certified that all the invoices are duly available with appellant. Further, to support such arguments, the appellant enclosed a CA certificate along with sample copies of such invoices. 11. Demand amounting to Rs. 10,623/- has been confir....
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....ns 1,25,33,674 1,53,53,265 2,36,20,541 2,76,05,957 13. Arguments on Limitation 13.1. The appellant submits that the first SCN was issued by invoking extended period of limitation on the alleged suppression of taxable value during the Financial Years 2009-10 to 2012-13 on account of difference between ST-3 and the values declared in the financial statements. The second show cause notice has also been issued on the basis of the same allegations by invoking the extended period of limitation. The appellant submits that the department was fully aware of the relevant facts from earlier proceedings, records, returns, and disclosures made by the appellant from time to time. Once the material facts were already within the knowledge of the department, issuance of a subsequent notice on the very same set of facts, without any fresh tangible evidence indicating fraud, collusion, wilful misstatement, or suppression of facts with intent to evade tax, is not permissible in law. The said view has been upheld in the case of Nizam sugar Factory reported in 2006 (197) ELT 149 (SC). Accordingly, the appellant submits that the demands raised and confirmed in the second SCN is not sust....
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.... goods by road is a taxable service under service tax. However, the liability to pay service tax was on receiver of service if the consignor or consignee is from specified categories as per Rule 2(1)(d)(v). As per the aforesaid rule, in case of Goods Transport Agency Service, if the consignor or consignee falls under any of the seven specified categories, then the person who is making payment of freight is the person liable to pay service tax. Since, the applicant provided service of transportation mainly to the body corporate and also issued consignment note to them, they were aptly qualify under the definition of Goods Transport Agency. Accordingly, the service tax liability was on them in terms of the aforesaid notification. Since the appellant have provided service to mainly body corporates (specified category) who paid freight to us, hence, they are the person liable to pay service tax under Rule 2(1)(d) (v) of the Service Tax Rules. It is clear that their clients were mainly body corporates falling under the specified categories under rule 2(1)(d)(v). Hence, liability to pay service tax was on them For Disallowance of benefit for availment of CENVAT Credit 14.4. The app....
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....ellant submits that the benefit of abatement which has been availed by them is not violation of the terms and conditions specified in the said notification and accordingly, the allegation levied in the impugned SCN is baseless. 15. Regarding imposition of penalty, the appellant submits that the impugned Order has imposed equal penalty under Section 78 of the Finance Act, 1994. However, there is no case warranting penalty under Section 78 on the appellant. Penalty under section 78 is imposable only for willful violation or intention to evade taxes invocation of extended period. The appellant submits that the impugned order fails to bring on record any evidence to the effect that the appellant have willfully evaded payment of service tax. Hence, charges of suppression and willful violation are baseless, arbitrary and lack credibility. Hence, penalty imposed on them as per section 78 of the Finance Act, 1994 is legally not sustainable. 16. The Ld. A.R. reiterated the findings in the impugned order. It is his submission that the appellant has not furnished the details of issue of consignment note for the purpose of availing the benefit of exemption available to Goods Transport Ag....
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....acts available on record, we find that the appellant had primarily provided transportation services to persons falling under the specified categories and had duly issued consignment notes, thereby squarely qualifying as a Goods Transport Agency. Accordingly, we hold that in terms of Rule 2(1)(d)(v), the liability to discharge service tax was on the service recipient and not on the Appellant. Further, it is observed that an abatement of 75% of the gross value of taxable service is available in respect of services provided by a Goods Transport Agency, in terms of Notification No. 13/2008-ST dated 01.03.2008. The benefit of the said notification has not been extended to the Appellant in the impugned order, which is contrary to the applicable legal provisions. Thus, we find that non-consideration of the available abatement has resulted in an inflated and unsustainable demand. 18.3. It is observed that the Appellant has submitted a detailed reconciliation statement supported by ledger extracts of income and sundry debtors, bank statements evidencing actual receipts, and reconciliation correlating the P&L figures with the ST3 returns at the time of investigation as well as Adjudicatio....
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....cannot be classified as "Clearing & Forwarding Agent Service". On perusal of the contracts dated 01.10.2010 and 01.10.2011, we find that the said contracts were meant for handling of export consignments meant for shipment outside India. Therefore, it is observed that the services rendered by the Appellant are outside the ambit of taxable service. We find that the Learned Commissioner has merely relied upon the title of the agreement described as "Contract for Clearing & Forwarding Agency" and concluded that the services fall under C&F category. Such finding is legally untenable. It is a settled principle of law that classification of taxable services must be determined based on the actual nature and substance of activities performed and not merely on nomenclature or title of the agreement. Thus, we find that the demand has been erroneously raised and confirmed on an amount of Rs.1,37,13,817/-, upon which Service Tax liability of Rs.14,12,543/- has been computed. It is observed that the aforesaid amount does not represent consideration towards any taxable service rendered by the Appellant, but pertains purely to reimbursement of actual expenses incurred by the Appellant on behalf of....
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....vice. 23. Regarding the demand of service tax of Rs. 17,88,258/-confirmed on the allegation that some of invoices based on which Cenvat credit was availed by the appellant are not in appellant's name, we find that the disputed invoices were issued in the names of entities such as Scorpion Express, Scorpion Logistics, Scorpion Courier, Scorpion Cargo, as well as in the names of certain individuals namely Mr. Prakash N.A. Singh, Ms. Jyoti P. Singh, Ms. Shalini J. Singh, Mr. Anil Tiwari, Mr. Vijay Rahate, etc. In this regard, we find that M/s Scorpion Express Private Limited was operating through various business divisions namely: 1) Scorpion Express, 2) Scorpion Cargo, 3) Scorpion Logistics and 4) Scorpion Courier. The impugned invoices referred to in the SCN were issued in the names of the aforesaid Divisions operating from different locations. The said Divisions were subsequently brought under centralized service tax registration obtained by the Appellant. It is not disputed that the services covered under the disputed invoices were duly received for the business activities of the Appellant and the corresponding expenditure was properly rec....
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....ts of the Appellant were duly audited and certified by an independent Chartered Accountant in accordance with the applicable statutory requirements by the way of verification of these invoices as well as related documents. The Chartered Accountant has duly verified and certified that all the invoices are duly available with appellant. Further, to support such arguments, the appellant enclosed a CA certificate along with sample copies of such invoices. For ready reference, the said CA Certificate is extracted below: 25.1. We observe that the substantive benefit of CENVAT Credit cannot be denied when receipt and utilization of taxable services stands established. Accordingly, we hold that the appellant has rightly taken the Cenvat credit and set aside the demand confirmed in the impugned order on this count. 26. Regarding the demand of Rs. 10,623/- confirmed on the allegation of non-payment of interest for late deposit of service tax liability, we find that the appellant has already made the said payment voluntarily for the delay in payment of service tax. Hence, there remains no outstanding liability towards interest as alleged in the impugned order and hence we set aside this....
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.... merits of the demand raised in the second Notice, we find that the said demand has been confirmed in the impugned Order-in-Original without due consideration of the documents, reconciliations, and detailed submissions furnished by the Appellant during the course of adjudication proceedings. In the impugned Order-in-Original, the Ld. Adjudicating Authority has denied the benefit of liability payable under Reverse Charge Mechanism (RCM) in respect of GTA services on the ground that the consignment notes were not submitted by the Applicant. Further, the Ld. Adjudicating Authority has denied the benefit of abatement on the ground that the Applicant had availed CENVAT credit during the relevant period. 28.1. In this regard, a perusal of the aforesaid tables in paras 11 and 12.1 clearly reveals that the Show-Cause Notice has proceeded on an erroneous presumptive by treating the entire amount reflected as sundry debtors as on 31.03.2011 as consideration allegedly received during the Financial Year 2011- 12. We find that the said assumption is entirely without any cogent basis, documentary evidence, or independent verification and has been made merely on conjectures and surmises. It is....
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....NVAT Credit Rules, 2004. The SCN alleged that the appellant claimed abatement and availed Cenvat Credit for the purpose of offsetting the liability of GTA services provided during the relevant period. Therefore, the appellant do not satisfy the conditions laid down in Notification 1/2006-ST dated 01.03.2006. In this regard, we observe that the appellant are not only engaged in providing the service under the above category of service, but also engaged in providing other services like 'Clearing & Forwarding Agent', 'Courier Agency' and 'Cargo Handling' on which they are duly discharging their service tax liability on 100% of the taxable value at the full rate of Service Tax, prevalent during the said period. In terms of the said notification, no credit of tax paid on input, input services, capital goods used for providing such output service on which the benefit of abatement is taken, would not be available. Therefore, credit on input services used in providing such output service on which abatement is claimed, is denied but the notification does not preclude the right of the appellant in relation to availing credit on input service used in providing other taxable output service, on....
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....ng and Forwarding Agency (Ch3]". We farther certily that we have raamodlad the groom uanset se Filed by the Company for the Rolevam Prrual. The recordlation stolements are asenal larowith M Annexare - Abo D. Upura nach remiteflation and vettfiction, we atnared that the Offerences between the farnever merciod in the Financial Statements and the tummer dachued in the 87kg Returns were cuitily uttribunohle to the following ressent . Difference in Method of Disclosuree Comin nevois and accesatting esaries wivr dickové differently in the Annual Francial Strinmanta vis-à -vis the tascher voise meperiod soplicalie Servizi Tax Iaées. · Liability undee GTA Services: In rasgast ul Goode Tranceet Agerwy (TT Al Services, that Balalny to discharge Servira Tas wi pasable lie the service recipimi under die: Revetw · Availment of Abatement umler GTA Services: The Company hal avallel eligible abatement ot 75% of the gross mannt charged undet GITA Services in accordance with the applicable exemption notifications pervuding during the rebraint period and anasnisudy Service Tax wee discharged on the tasalle portion only M K K AGARWAL & ASSOCIATES CHARTERED ACCOUNTANTS ....
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....gher Filnutimm Cess aggregating to tz.36/%. 4. That the aforesind Service Tax payments are duly reflected in the 81-3 Retums flint Bry the Company fur the relevant isturn periods and are also daly rorunesind with the 5. Rent in the reecede and documents produend before us, we crtily thut Serviese Tis liability on the ufocisaid rectipts has been duly diechanged at the applicable take off M K K AGARWAL & ASSOCIATES CHARTERED ACCOUNTANTS C NOCLATA- 700 006 Ph Hin- 0111077003 Amount in which Service has been paid 0f12.36% nfer 24.02.2009 Amissitt 208.00.004 70,99.397 Mus'09 11:24.347 1.75017 QUE DE Tocal 5.43-31.090 In accordance with the Guidance note on "Report and Certificates frit special purposes" Issued by the Institute of the Chartered Accountants of India. The Gullance bote maguires that we comply with the ethical requirements of the code of ethics leaned hry the Institute of the Chartered Accountants of India. We have complied with the relevant applicable nopireminti of the Standard of the quality Control and other assurance and relatest aervice engagnants. submission to fun'hle Customs, Excise & Service Tax Appellate Tribun....
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....ctual beer without any markup, comiodon, profit element ur valute addition. IL w further ofserund liat the Company merely need is a CA M K K AGARWAL & ASSOCIATES $2, THE HIVE GARDENS, ERESTI APARTMENT XDUKATA - 700056 Ph. tio .- 9331072002 CHARTERED ACCOUNTANTS facilitator/pure ngent while making nurh payments on behalf of M/n Alkem Laboratories Limited 4. Therefore, based on the Imoka of secounts aml other supporting reconls and esglassations furnished before w. it is certified that the aforesaid reimbursements do not constitute posideratiem fmanis tasabde output services rendered ky the Company and are in the nature of pure reimbursements recoverable om actual basis. We conducted our examination of the relevant documents for the purpose of this certificate in accordance with the Guidance note on "Report and Certificates for npocial purposes" issul try the Enabitte of the Chartered Aremmutants of India. The Golance note resquares that we comply with that ethical requirements of the code of ethics juaned by the Institute of the Chartered Acemintants cf Inilla. We have cumplial with the relevant applicable requirements of the Standard of the quality Control and ....
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....e applicable provisions of the Finance Act, 1994, and not by the Company. We comincimi our examination of the relevant documents for the purpose of this certificate In accordance with the Guidance note on "Report and Certificates for special purposes" Isaned by de lastitute of the Charterel Accountants of India. The Guidance nole requinta thut we comply with the ethical requirements of the code of ethics issued by the Institute of the Chartered Accountants of India. We have complied with the relevant applicable mquirements of the Standard of the quality Control and other assurance atel reistest services engagements. This certificate has been prepared for and only for use by the company for the purpose of submission to Hon'ble Customs, Excise & Service Tax Appellate Tribunal and for no other purpose. We do not accept or assume any liability or duty of care for any other purposes of to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. For M KK Agarwal and Astodous Chartered Accountants IRN: 328815E Mukesh Agadwal Pegiprietor [Membership No 3117229] Date :- 31/05/2026 Document 5 M ....
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....certificate in accordance with the Guidance note on "Report and Certificates for special purposes" issned by the Institute of the Chartered Accountants of India. The Guidance note requires that we comply with the ethical requirements of the code of ethics issued by the Institute of the Chartered Accountants of India. We have complied with the relevant applicable requirements of the Standard of the quality Control and other assurance and related services engagements. This certificate has been prepared for and only for use by the company for the purpose of submission to Hon'ble Customs, Excise & Service Tax Appellate Tribunal and for no other purpose. We do not accept or assume any liability or duty of care for any other purposes or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. For M.K.K Agarwal and Associates Chartered Accountants FRN: 328816E Kolkata Mukesh Agarwal Proprietor (Membership No 307279) Date :- 11/05/2026 UDIN:269072796VAGIT3918 Document 6 M K K AGARWAL & ASSOCIATES 42, BEE HIVE GARDENS, SHHISTI APARTMENT ADUNATA - 100 056 Ph. No .- 9331077602 mukesh 130691....