TaxTMI 
TaxTMI 
2024 (11) TMI 1652
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was not paying service tax as required. 2.2 Enquiry was initiated against the Appellant and it was observed that during the period April, 2014 to June, 2017 Appellant has short paid service tax amounting to Rs. 10,32,091/- on the services provided by them. They had also not taken service tax registration in due time and also did not file any ST-3 returns during the said period. 2.3 A show cause notice dated 16.10.2019 was issued to the Appellant asking them as to why:- (a) The amount of Rs. 82,22,230/- charged & received by them should not be treated as gross value receipts of taxable service. Accordingly, total service tax amounting to Rs.10,32,091/- (Rupees Ten Lakhs Thirty Two Thousand and Ninety One only) (including Swach Bharat Cess and Krishi Kalyan Cess) as discussed above should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994 read with Section 174(2) of the CGST Act, 2017 invoking extended period of limitation to recover the amount of service tax for the period from 2013-14 to 2017-18 (up to June, 2017). (b) Interest should not be demanded/recovered from them under the provisions of Section 75 of the F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ithin 30 days; (iv) I impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) upon M/s J.S. Communication, 13/56, Govind Nagar, Kanpur under Section 77(1)(a) of the Finance Act, 1994 for their failure to not registered with the service tax department; (v) I impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) upon M/s J.S. Communication, 13/56, Govind Nagar, Kanpur under Section 77(1)(b) of the Finance Act, 1994 for their failure to maintain books of accounts and other documents as required in accordance with the provision of Chapter V of the Finance Act and for not submit information/documents/records called by the officer of the department; (vi) I impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) upon M/s J.S. Communication, 13/56, Govind Nagar, Kanpur under Section 77(1)(c) of the Finance Act, 1994 for their failure to submit information/documents/records called by the officer of the department; (vii) I impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) upon M/s J.S. Communication, 13/56, Govind Nagar, Kanpur under Section 77 of the Finance Act, 1994 for contravention of the various provisions of Finance Act, 1994 rea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase, Service Tax liability of the appellant has been determined on the basis of Entertainment Tax, I thus, find that the amount of such Entertainment Tax paid by the appellant, is not includible in the taxable value, as clarified by the Central Board of Excise & Customs under Para 5 of the Annexure-IX of the letter F. No.B.11/1/2002-TRU dated 01.08.2002, as under:- "5. In some States, cable operators are also liable to pay entertainment tax. In such cases, a cable operator charges from his customer an amount inclusive of entertainment tax. A point has been raised as to whether the amount paid as entertainment tax is liable to be included in the value of taxable service. It is clarified that the entertainment tax collected and paid to the Government will not be includible in the value of taxable service, provided the cable operator clearly indicates the entertainment tax element in his bill to the customer." 4.2.1 I also find that Hon'ble CESTAT in the case of Universal Communication vs. Commr. of C. Ex. & S.T., Nagpur 206 (45) S.T.R. 80 (Tri.-Mumbai), inter alia, held, as under:- Valuation (Service Tax) - Cable Operator Service - Deduction of Entertainmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itimate credit available within the prescribed time limit & would be available for infinite period of time. The appellant has also failed to maintained/produced any CENVAT record for availment of CENVAT credit within prescribed time limit, therefore, contravened the provisions of Rule 9(6) & Rule 9(9) of the CENVAT Credit Rules, 2004. Therefore, I am of the considered opinion that the appellant is not eligible for CENVAT credit due to nonfulfillment of condition mentioned in the Rule 4(7), 9(6) & 9(9) of the CENVAT Credit Rules, 2004. 4.4 Now, I take the issue whether the appellant is providing branded service or not. I observe that in this case, the appellant is cable operator and providing cable services to the subscribers on the basis of signals received from the MSO i.e. M/s DEN. The subscriber has not asked for any brand for providing the said services. In fact, the appellant is also not providing any branded service as M/s DEN is supplying signal to the appellant which has been transmitted to the subscribers, in that circumstances, there is no relation of brand name to the ultimate customers. Therefore, I hold that the appellant is not providing any branded service t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t procedure specified in the statute, the appellant was required to assess & pay their Service Tax liability correctly, on their own. The non- payment of Service Tax could be detected only during the course of enquiry conducted by the Department. Thus, it is a clear case of suppression of facts and contravention of the statutory provisions, with intent to evade payment of Service Tax. Thus, I find that extended period of limitation has been rightly invoked in this case for confirming the demand of Service Tax and imposing penalty under Section 78 of the Act. 4.8 As regards to penalties imposed under section 77(1)(a) of the Finance Act 1994, I observe that Section 77(1)(a) of the Act provides that "any person who is liable to pay service tax or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to a penalty which may extend to ten thousand rupees. Since the appellant failed to take service tax registration during the relevant period, therefore, penalty amounting to Rs.10,000/- imposed by the adjudicating authority under Section 77(1)(a) of the Act is justified. I further ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed under the small service provider exemption Notifications No.06/2005-ST dated 01.03.2005 & 33/2012-ST dated 20.06.2012. It is observed that the Hon'ble CESTAT, Chandigarh in the case of M/s Blue Star Communication vs. Commissioner of C.Ex. & S. Tax, Ludhiana, vide the Final Order No.A/60167-60171/2019 dated 22.02.2019, has, inter alia, held that the local cable operators providing cable service to the subscribers, on the basis of transmission signal received from the MSO, are not providing any branded service and thus, they are eligible for the benefit of the aforesaid notifications. 4.4.1 Thus, applying the aforesaid Final Order dated 22.02.2019 of the Hon'ble CESTAT. Chandigarh, to these appeals, I find that the appellants did not provide any branded service and as such, they are entitled for the benefit of the aforesaid notifications. 4.5 Regarding the submission of the appellants that the demands of Service Tax have been wrongly computed by applying the rate of Service Tax (including Cesses) as 14.5% for the whole year 2015-16 & as 15% for the whole 2016-17, it is observed that the rate of Service Tax was 12.36% till 31.05.2015, 14% from 01.06.2015 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of assignment of right to use any natural resource: 4.6 This proviso to Rule 4 (7) is parimateria to the proviso to Rule 57 G (2) of the Central Excise Rules, 1944 which was inserted by Notification No. 28/95-CE (NT) dated 28.06.1995. The said proviso is reproduced below: "Provided further that the manufacturer shall not take credit after six months from the date of issue of any of the documents specified in the First proviso to this Sub-Rule." This proviso was considered by the larger bench of CESTAT in the case of Kusum Ingots & Alloys Ltd. [2000 (120) E.L.T. 214 (Tri.-LB.)]. Larger Bench held as follows:- "11. The contention of the appellant is that some reasonable period should have been given to the manufacturer who were having duty paying documents which were more than six months old on the date of amendment and no credit was taken on them, to take credit on such documents, the appellant replied upon the Hon'ble Supreme Court case Union of India v. Harnam Singh (Supra). We find that Hon'ble Supreme Court in the case of Miles India Limited v. Assistant Collector of Customs, reported in 1987 (30) E.L.T. 641 (S.C.) and in the case of Collecto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the manufacture of final product for payment of duty on such final product; but he has to take credit on such inputs within six months from the date of issue of the duty paying documents. After the amendment credit cannot be taken on duty paying documents which are more than 6 months old." 4.7 The decision in case of Osram Surya (P) Ltd. which was approved by the Larger Bench has been affirmed by the Hon'ble Supreme Court reported as 2002 (142) E.L.T. 5 (S.C.) observed as follows:- "7. Having heard the arguments of the parties and after considering the rule in question, we think that by introducing the limitation in the said proviso to the rule, the statute has not taken away any of the vested rights which had accrued to the manufacturers under the Scheme of Modvat. That vested right continues to be in existence and what is restricted is the time within which the manufacturer has to enforce that right. The appellants, however, contended that imposition of a limitation is as good as taking away the vested right. In support of their argument, they have placed reliance on a judgment of this Court in Eicher Motors Ltd. v. Union of India [1999 (106) E.L.T. 3 (S.C.)] wherei....