TaxTMI 
TaxTMI 
2026 (7) TMI 1536
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....) I order to recover interest amounting to Rs.25,502/- on the amount of their Central Excise Duty liability of Rs.157468/- under provisions of Section 11 AB of Central Excise Act, 1944. As they have paid the interest of Rs 25,502/- the same is appropriated against their total interest liability. (iii) I impose penalty of Rs.1,57,468/- on M/s. BJD Print Systems, 60-B Dada Nagar Kanpur under provisions of Section 11 AC of Central Excise Act, 1944, for suppressing the taxable sales provided by them with an intent to evade payment of Central Excise duty. (iv) I confirm the demand of Service Tax (including education cess and SHE cess), amounting to Rs.14,768/- on M/s BJD Print Systems, 60-B Dada Nagar Kanpur under reverse charge mechanism during the period 2016-17 for receiving Legal Consultancy Service under proviso of Section 73(1) of the Finance Act, 1994. As they have already paid the amount of Rs 14,768/- the same is appropriated against the above demand. (v) I order to recover interest amounting to Rs.3,442/- on the amount of their service tax liability of Rs. 14,768/- under Section 75 of the Finance Act, 1994. As they have paid the interest of Rs 3,442/....
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....heet, sale ledger for the period 2016-17 on comparison with ER-1 returns it was noticed that the appellant failed to disclose the actual sale figures in their ER-1 returns for the month of January 2017 and March 2017 and short paid central excise duty as detailed in table below:- Period Sale as per Ledger Sale shown in ER-1 Difference Duty Short Paid Jan 2017 20294461 20221377 73084 9136 Mar 2017 9755119 8568461 1186658 148332 Total 30049580 28789838 1259742 157468 2.3 On being pointed out, appellant admitted their mistake and deposited the duty alongwith interest vide challan dated 26.04.2018. 2.4 Further, examination of their ledger revelled that appellant had paid Rs.98,452/- to the advocate on which they did not charge service tax under reverse charge as per Notification No.30/2012-ST dated 20 June, 2012. Appellant admitted ad deposited the service tax along with interest. 2.5 On scrutiny of the ledger for the period 2015-16 and 201617 vis-à-vis ST-3 return for the relevant period, it was found that appellant had short paid service tax amounting to Rs.1,00,118/- required to be paid by them on reverse ch....
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....the party has already deposited interest amounting to Rs. 3442/-(vide Challan No. 00143 dated 22.02.2019 amounting to Rs. 29,345/-), why the same should not be appropriated and adjusted against the Government dues. (vi) Penalty should not be imposed upon them in respect of point No. (iv) under provisions of Section 78 of the Finance Act, 1994. (vii) Service tax amounting to Rs. 1,00,118/- (One Lac One Hundred and Eighteen only) short paid by them should not be demanded and recovered from them against receiving GTA Service for the period 2015-16 & 2016-17 under provisions of Section 73(1) of the Finance Act, 1994 (as amended) for the reasons as discussed. (viii) Interest should not be demanded & recovered from them on the amount as mentioned at point no. (vii) under the provisions of Section 75 of the Finance Act, 1994. (ix) Penalty should not be imposed upon them on the amount as mentioned at point no. (vii) under Section 78 of the Finance Act, 1994. (x) Penalty of Rs.20,000/- should not be imposed upon them under Section-70(1) of Finance Act for late submission of ST-3 return for the period April 2016 to September 2016 on 30.08.2017 i.e....
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....al in the case of M/s Jet Airways (I) Ltd. Vs Commissioner of Service Tax Mumbai 2016 (8) TMI 989CESTAT-Mumbai. ⮚ In addition, he wants to rely upon the following decisions:- o Reliance Industries Ltd. 2016(44) S.T.R. 82 (Trib-Mumbai) ○ M/s. Luit Developers Pvt. Ltd. Vs. Commr. of CGST & C.Ex. Dibrugarh reported at 2022-TIOL-180-CESTAT-Kolkata ○ Universal Dredging & Reclamation Corporation Ltd. Vs. Commissioner of CGST & Central Excise, Madurai reported in 2021(44) GSTL-401 (Trib Chennai)=2020-TIOL-1157-CESTAT-Mad ○ Jet Airways (I) Ltd. Vs. Commissioner of Service Tax, Mumbai and reported in 2016 (44) S.T.R. 465 (Trib Mumbai); ○ Commissioner, Central Tax(CGST) Vs. M/s.Viami Business Solution Pvt. Ltd. reported at 2019 ACR 699(CESTAT), Allahabad; 3.3 Learned Authorized Representative reiterates the findings recorded in the orders of the lower authorities. 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 Impugned order records the findings as follows:- "5.2 With regard to the merits of the case, I have gone through the....
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....arge of tax dues? 5.5 I find that the appellants have accepted that they had short/not paid Central Excise Duty and were also liable to pay service tax under reverse charge mechanism on the payment made to the Advocate, did not pay the same unless it was pointed out. It is noteworthy that the duty/tax discharged by them was voluntary and was not contended. Thus, it is evident that had the department not pointed out the suppressed value in their ER-1 Return and the nondisclosure of amount paid to the Advocate, the appellants would not have discharged the duty/tax liability. As such, it is also evident that there was malafide on the part of the appellants to suppress the taxable value with intention to evade the payment of duty/tax. Accordingly, it is manifest that the appellants have contravened the provisions of Rule 4 and 6 of the Central Excise Rules 2002 and hence rendered themselves liable for penalty under the provisions of section 11 A of the Central Excise Act, 1944. 5.6 Now coming to the issue of revenue neutrality regarding the service tax being discharged on one hand and taking the credit on the other. I am of the view that the plea of 'revenue neutr....
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....e; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii) the duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under section 11AA. (2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder. (3) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that subsection and the period of [two years] shall be computed from the date of receipt of information under sub-section (2). SECTION [11AC. Penal....
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.... within that period under Sub-Section 2 of the said Section of the Act. 4.6 The same observations made above are true in respect of the demand made in respect of Legal Services amount of Rs.98,452/- paid to the advocate. Appellant had deposited the service tax due along with the interest much before the issue of show cause notice. Thus, I do not find any merits in the penalty imposed under Section 78 of the Act in respect of service Tax short paid on reverse charge basis. 4.7 Now coming to the issue of demand of service tax on reverse charge basis in respect of GTA Services amounting to Rs.1,00,118/-. This amount also has been confirmed along with interest under Section 75 and penalty under Section 78 of the Act. Appellant has claimed that this is a case of revenue neutral and has placed reliance on the decisions referred in the case of M/s Jet Airbase, however on going through the said judgment, I find as follows:- "11. In view of the forgoing, we hold against the appellant on the revenue neutrality situation. With regards to service tax liability, interest thereof and penalty, we hold in favour off the appellant and set aside the demands, interest and penalties and....
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.... the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,...". In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assessees it was also submitted that Sections 11A and 11AC not only operate in different fields but the two provisions are also separated by time. The penalty provision of Section 11AC would come into play only after an order is passed under Section 11A(2) with the finding that the escaped dut....
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....man, 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 Chairman, SEBI's case (supra) h....