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2019 (2) TMI 1299 - AT - Central ExciseReverse charge mechanism - non-payment of service tax - royalty payment to NML for the period from July 2010 and March 2011 - demand of interest - CENVAT Credit - Rule 9 of Cenvat Credit Rules, 2004 - Held that:- Appellant has submitted that the tax liability demanded in the impugned order dt. 28.02.2013 of ₹ 6,21,24,362/- is not contested by the appellant and is contesting the interest and penalty liability - the impugned order demanding the said tax liability upheld - penalty u/s 78 set aside - penalty u/s 77 upheld. Service tax on technical assistance fees which the appellants paid up although no tax was payable - remaining liability of ₹ 62,12,436/- relates to service tax on trade mark fees which also was deposited before issue of the SCN - Held that:- Appellant submits that though appellants are not contesting liability on merits, however, they are required to have discharged only ₹ 5,79,21,902/- against the demand of ₹ 6,21,24,362/- and excess amount of ₹ 42,02,460/- has been paid. The Ld. Consultant has made a prayer for remand of the matter for the limited purpose of enabling reworking of the tax liability - this is a fair request and is therefore acceded to. Demand of Interest - Held that:- Section 73 (3) of the Finance Act, 1994 provides for very similar situation where the assessee can pay up the tax liability short paid on the basis of his own assessment or being pointed by the proper officer before issue of notice on him. However Explanation (1) to sub-section clearly indicates that interest under Section 75 ibid shall also be payable on the amount so paid by the person under Section 73 (3). This being so, there is no escape from interest even when the appellants had paid up the entire tax liability before issue of SCN - demand of interest upheld. CENVAT Credit - invocation of Rule (9) (1) (bb) of CCR - Held that:- Since the tax amount of ₹ 6,21,24,362/- has been paid by them under reverse charge mechanism which specifically fits under Section 9 (e) ibid, the credit has therefore been availed by the appellants not under Rule 9 (bb) but under Rule 9 (e) of the CCR 2004 - this contention is found to be correct - There is no doubt that the demand of ₹ 6,21,24,362/- was made under the premise that the same was required to be paid under reverse charge basis. This being so, such payment will only within the ambit of Rule 9(e) ibid and not Rule 9 (bb) of the CCR 2004 - no suppression can be foisted on the appellant in respect of tax liability of ₹ 6,21,24,362/- which has been paid after being pointed out to them, before issue of SCN - the impugned order cannot be sustained and will require to be set aside. Appeal disposed off.
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