TaxTMI 
TaxTMI 
2026 (8) TMI 793
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner has confirmed the demand, of Rs.15,53,14,279/- along with interest and penalty for the period April 2006 to March 2014, vide impugned order dated 10.05.2016. Hence, this appeal. 2. Shri Harish Bindu Madhavan, learned counsel for the appellant, submits that a bare perusal of the SCNs makes it clear that the SCNs have been issued against the foreign expenditure; the impugned order classifies the said payment under various services even though there is no clear classification of the services alleged to have been rendered by the appellants; there are no clear and coherent allegations against the appellants. He submits that learned adjudicating authority failed to analyze the transactions and failed to provide any category of taxable services with reasons to confirm the demand; merely stating that the appellants have received certain services is not a valid reason for confirmation of demand. He submits that the impugned SCNs are fatally vague, as they merely reproduce statutory text without identifying any taxable service, factual basis, legal provision, or evidence, thereby denying the Appellant a meaningful opportunity to respond. The notices pre-judge the issues, fail to disc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x 5 (Tri. Chan.) * Joshi Auto Zone Pvt. Ltd. - (2024) 19 Centax 441 (Tr. Chan.) * Shubham Electricals - 2015 (40) STR 1034 (T) and 2016 (45) STR J314 (Del.) * United Telecom Ltd. - 2011 (22) STR 571 (Tri. Bang.) * Bansal Electric Works - 2017 (3) GSTL 65 (Tri. All.) 3. Learned counsel further submits that the impugned order suffers from factual mis-appreciation and mechanical adoption of financial-statement figures, including domestic vendor payments wrongly treated as foreign services, services performed entirely outside India; pre-2009 legal consultancy was misclassified as management consultancy; there are multiple computational errors such as double-counting and misclassification; appellant's submissions on each of disputed expenditure, supported by invoices, CA certificates, and statutory records demonstrating either non-taxability or incorrect classification, were not considered and not even rebutted or even considered in the impugned order. He submits that consequently, the demands are unsustainable as they lack factual foundation, legal classification, and evidentiary support; the impugned order is nonspeaking and has been passed with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ltd. - 1983 (13) ELT 1566 (SC). 4.5 Learned counsel submits that no service tax is payable on Commercial Training or Coaching Services as is evident from the invoices, the service was rendered totally outside India; therefore, demand of Rs.58,67,274/- cannot be sustained. He also submits that speaker fee paid by them was not for the services which are in the nature of Commercial Training or Coaching Services; the payments were made to the speakers who came to India and provided lectures to the employees; therefore demand of Rs.4,84,640/- cannot be sustained. 4.6 Learned counsel submits that service tax of Rs.26,83,973/- was demanded erroneously as the expenses incurred in relation to Telecommunication and Sub-Contract charges have been inadvertently added to the total expenditure during 2011-12. 4.7 Learned counsel submits that the impugned order wrongly denies CENVAT credit on the Health & Fitness Services based on the decision in the case of Pfizer Ltd; the order was only a Stay Order and therefore, cannot be relied upon. 5. Learned counsel submits, without prejudice to the above, that the extended period has been wrongly invoked; all facts, records, and returns were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing out the allegations under various heads; the adjudicating authority has considered all the submissions made by the appellant and has given categorical and clear findings on each of the allegations; therefore, it can be said that the impugned order was a non-speaking order and that it was passed by travelling beyond the scope of the Show Cause Notice; the case laws relied upon by the appellant are totally distinguishable and cannot be applied to the case on the basis of facts and circumstances of the case. 8. Learned AR submits that Para 47 of the impugned order clearly brings out that the adjudicating authority has clearly brought out the appellant's submissions in respect of about 31 services. Sl. No. Description of services 1 Travelling and conveyance - Payments made to employees towards travelling and conveyance. 2 Employee Cost - Reimbursement of Salary Cost. 3 Legal services received from law firms - Service tax is not payable prior to September, 2009. 4 Communication cost - Telecommunication services provided by non-resident service providers not subjected to service tax before 1st, Jul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elies on Hon'ble Supreme Court's decision in the case of Northern Operating System - 2022 (61) GSTL 129 (SC) and the distinguishing of the impugned case attempted by the learned counsel is not acceptable. The case has been followed in DEL International Services India Pvt. Ltd. - 2023 (73) GSTL 369 (Tri. Bang.). (ii) Legal and Professional Charges - The appellants are liable to pay service tax on foreign currency payments in respect of Management or Business Consultant Service during the demanded period and from 01.09.2009 onwards on legal consultancy charges. (iii) Commercial Training and Coaching Services - In this regard, the invoices relied upon by the appellant do not cover the entire demand of Rs.58,67,278/- and the invoices indicate education expenses and does not indicate as to where the same was received; therefore, there is no infirmity in the finding of the Adjudicating Authority. (iv) Payment to domestic vendors in foreign currency - Regarding claim of payment to domestic vendors in foreign currency, it is not the case of an inadvertent entry in one or the other years; this has been the feature over the years from 2009-10 to 2013-14; therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....axable services, service tax payable and the gross amount charged in different columns; however, the appellants failed to disclose correct and full declaration under column - c (ii) under 3 (F) under the Head "Amount Received/ Paid Towards Exempted Service"; in Days Inn Deccan Plaza - 2016 (45) STR 202 (Mad.), it was held that extended period can be invoked for failure to make correct and full declaration in ST-3 returns. He further relies on the following cases: * STAR INDIA PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-I -2015 (38) S.T.R. 884 (Tri. - Mumbai) * TECH MAHINDRA LTD. Versus COMMISSIONER OF C. EX., PUNE-III - 2015 (38) S.T.R. 1200 (Tri. - Mumbai) * IDEAL SECURITY - 2011 (23) STR 66 (Tri. Del.) * MARTIN & HARRIS LABORATORIES LTD. - 2010 (260) ELT 31 (P & H) 10. Heard both sides and perused the records of the case. The basic argument of the appellants is that the Show Cause Notices are faulty having been issued mechanically treating all foreign currency expenditure as taxable import of services without identifying the underlying service, its classification, or its taxability under the Import Rules and as such the impugned o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gibility as to deny a fair and adequate chance to the recipient/assessee to get himself fully exonerated and avoid incidence of tax. What transpired after the notice was served, conduct of the parties thereafter, hearing given, are all factors that have to be examined to ascertain as to any prejudice was caused resulting in an arbitrary and unjust decision. Principle of prejudice resulting from vagueness and uncertainty has to be examined in pragmatic and a reasonable manner. 12. In view of the basic defense of the appellants that the impugned SCN is vague, non-specific and has been issued without identifying the service received and the amount paid by the appellants for such service, we find that it is necessary to glance through the SCNs to get a clear picture. We find that SCN dated 20.10.2011, which is the initial SCN and all others being periodical and issued on same lines, follows the scheme in concise as under: Para 1.... Preliminary Introduction Para 2 & 3 .... Conclusions of the audit and the fact that correspondence was made with the appellants on unbilled revenues Para 4...... short/non-payment of service tax on foreign currency expenditure ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not specify which is the amount of foreign currency expenditure incurred on each of such services. On going through the submissions of the appellant before the Adjudicating Authority and in this appeal, it appears that the appellants could identify the expenditure incurred on each of the services and could give their submissions in defence. We also observe that the Adjudicating Authority has gone through the submissions of the appellants themselves and discussed the taxability or otherwise of each of the services included in the SCN. The very fact that the appellant could give elaborate submissions, service-wise and amount-wise, indicates that the SCN was not unintelligible as is being made out by the learned counsel for the appellants. If the SCN was unintelligible and nothing could be made out of it, there was no way that the appellant could have given elaborate submissions on the issues raised therein in the SCN. The appellants, having been able to identify different services and the payments alleged to have been made for the same and having given submissions accordingly cannot claim that the SCN was vague and mechanical. We find that as long as the SCN makes the allegations c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inance Act, 1994 as amended, the provisions of Service Tax the Rules, 1994 as amended and the Cenvat Credit Rules, 2004 as amended. ...... 16. We find that the above findings of the learned Commissioner is not factual. As stated above, the SCN does not bring out any act on the part of the appellant which could have rendered the invocation of extended period legally tenable. Moreover, we find that another SCN dated 13.10.2011 has been already issued, pursuant to an audit conducted, to the appellants invoking extended period of limitation. Therefore, it is not open for the Department to issue the subsequent SCN dated 20.10.2011, again based on an audit report, invoking extended period as held by the Hon'ble Apex Court in the case of Nizam Sugar Factory vs. Collector of Central Excise, A.P. 2006 (197) E.L.T. 465 (S.C.). Moreover, it has been continuously held by the Tribunal that extended period cannot be invoked when the allegations are based on an audit. Also, as the ingredients required for invoking the extended period have not been brought out with evidence in the SCN, extended period cannot be invoked. Therefore, we are of the considered opinion that the demands confi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant and has not given valid reasons for not accepting the said certificate issued by a Chartered Accountant. Moreover, there are some demands on the basis of difference in the accounts and accounting practices. Learned Adjudicating Authority has not properly appreciated the same and has not given findings as to why the submissions of the appellant cannot be appreciated. As an example, we take up the issue of demand of service tax on the commission paid to domestic vendors; the appellants submit that it was an inadvertent error that the appellants have shown the expenditure in foreign currency in a couple of years; the Authorized Representative, however, submits that the mistake occurred not in a couple of years but in most of the years and therefore, the plea cannot be accepted. We find that mistake does not cease to be a mistake only for the reason that it has been committed a number of times. However, we find that learned Authorized Representative submits that no entry to counter balance the mistake has been shown. We find that learned Commissioner has not given satisfactory findings on this issue and other issues. Further, we find that the Revenue relies on the figures and Cha....