TaxTMI 
TaxTMI 
2026 (6) TMI 1365
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....qual amount as penalty under rule 15 of the CCR and Section 78 of the Act and further imposed penalties of Rs. 5,16,571/-under section 76 of the Act and Rs. 10,000/- under section 77(i) and 77(ii) of the Act and Rs. 20,000/- under section 70 of the Act. 2. We have heard learned counsel for the appellant and the learned authorized representative for the Revenue and perused the records. 3. The three issues for consideration in this appeal on merits are. (i) Demand of Rs. 12,36,00,000/- under rule 6(3) of the CCR, 2004. (ii) Service Tax said to have been short paid by the appellant under the head "erection, commissioning and installation service" during 2012-13 (iii) Service tax said to have been short paid on account of change in the rate of tax after 01.04.2012 (during 2011-12) 4. The appellant is engaged in manufacture and trading of goods such as uninterrupted power supply systems, DC power systems, precision air conditioning systems etc. It's business is divided into four zones i.e., North, South, East and West, and the present appeal pertains to the demand raised against the appellant in north zone where it was registered with the respondent. ....
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....mmissioning and installation service" "works contract service". Therefore, the appellant contends that it had paid correct it service tax in respect of all services. 8. With respect to the third part of the demand, the allegation is that the appellant had raised certain invoices during the month of February and March 2012 but the payments were received after April 1, 2012 when the rate of service tax was increased from 10% to 12%. It is alleged that as per the point of taxation rules service tax should have been paid at 12% and not at 10%. The appellant's submission with respect to this is as follows: Sl No. Situation Payment of service tax 1. Invoices raised and services rendered, both prior to 01.04.2012 Since services were provided and invoice was raised, service tax was paid @10.3%, which was the rate applicable prior to 01.04.2012 in terms of Rule 4(a)(ii) of POT Rules. 2. Invoice raised prior to 01.04.2012. Services partially provided prior to 01.04.2012 and partially after 01.04.2012. Entire payment received in advance prior to 01.04.2012 Since entire payment was received in advance prior to 01.04.2012, service tax was paid @ 10.3% which was the....
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....her, if the assessee opts for payment of an amount under Rule 6(3) of CCR but was does not pay the amount, such amount can also be recovered under rule 14 of the CCR. 14. Nothing in the CCR permits officers to make a choice and require the assessee to fulfil obligation as per the officers choice. An amount under rule 6(3) of CCR cannot be demanded from the assessee under Rule 14 of CCR by making a choice for the assessee. The judgment of the Telangana High Court in Tiara Advertising answered this question very clearly. The relevant portion of which is as follows: "7. Rule 6 of the CENVAT Credit Rules, 2004 deals with the obligations of a provider of taxable and exempted services. Rule 6(1) states that CENVAT Credit shall not be allowed on inputs/input services exclusively used for providing exempted services. Rule 6(2) provides that if inputs or input services are used for provision of output services which are chargeable to duty or tax as well as exempted services, then separate accounts are to be maintained for receipt, consumption and inventory of inputs and receipt and use of input services and the provider shall take credit only on inputs used for dutiable output s....
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....portionate amount of CENVAT credit on the common input services and had not availed any CENVAT credit to the extent that they were attributable to exempted services. If the appellant has not availed complete amount of CENVAT credit the question of reversing a portion of it under rule 6(3) of CCR does not arise. This part of the demand cannot be sustained even for this reason. 17. The second issue is of the service tax said to have been short paid under the head "erection, commissioning and installation service" during 2012-13. The certificate from the Chartered Accountant for the year 2011-12 is placed at page 320 of the appeal. Details of the service tax paid on various services and the manner in which service was treated in each of the invoices is placed at pages 321-335 of the appeal. What is clear from this is that the appellant had rendered not only "erection, commissioning and installation service" but had also rendered works contract services and annual maintenance contract services for which he raised invoices and paid appropriate amount of service tax. Such being the case the demand of service tax under installation and commissioning services cannot be sustained and nee....