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2023 (12) TMI 76 - AT - Service TaxLevy of penalties - Failure to Pay Service Tax on receipt of Advance during the FY 2008-09 - Failure to on receipt of Advance on 15.11.2008 and on 15.03.2009 - Short payment of service tax in terms of Rule 6 of the Service Tax Rules, 1994 - Short payment of service tax during the period from 23.08.2006 to 27.03.2008 - HELD THAT:- The entire service tax along with interest has been paid before issue of the Show cause Notice. Thus, as per Section 73(3) of the Finance Act, 1994, no need to issue show cause notice for this demand. Also, the department has not brought in any evidence on record to substantiate the allegation of fraud, collusion, suppression or misrepresentation of fact. Thus, extended period cannot be invoked in respect of these demands and hence no penalty imposable on this demand. Accordingly, the penalty imposed on these demands set aside. Short payment of Service tax during the period of FY 2006-07 and 2007-08 - demand occurred due to change in rate of duty - HELD THAT:- The service was provided by the Appellant prior to change in rate of duty and Invoices have also been raised prior to change in rate of duty. The recovery of the amount after the change in the rate of duty does not mean that the revised rate would be applicable for the services rendered prior to the rate change. This view has been held in the case of Commissioner of Service Tax Vs. Consulting Engineering Services (I) Pvt. Ltd [2013 (1) TMI 434 - DELHI HIGH COURT] - the demand confirmed by adopting the revised rate of duty is not sustainable. Non-payment of service tax during the period of FY 2007-08 for providing service as Subcontractor - HELD THAT:- The adjudicating authority has relied on the Board circular 96/7/2007-ST dated 23.08.2007 wherein it has been clarified that sub-contractor is also liable to pay service tax even if the main contractor pays service tax. It is observed that this clarification was issued on 23.08.2007. Thus, on merit the submission of the Appellant, cannot be agreed upon. However, it is observed that prior to this clarification, there were confusion about the liability of sub-contractor to pay service tax when the main contractor pays service tax on the full value. Also, the service tax paid by the sub contractor would be available as credit to the main contractor. In this case the main contractors Simplex Project Limited and Tata Projects Limited have paid service tax on the full value - Further, the demand is hit by limitation. The demand in this case pertains to the period 2007-08 and the show cause notice was issued on 19.04.2011, beyond the normal period of limitation. The department has not brought in any evidence to substantiate the allegation of suppression. Thus, the demand is hit by limitation. Short payment of service tax during the period of FY 2007-08 - demand has arisen due to payment of service tax by the Appellant under composition scheme for the period of July 2007 to March 2008 and non-complying the Notification No. 32/2007 dated 22.05.2007 - HELD THAT:- It is observed that no procedure has been laid down under the Rule and there is no statutory form for exercising the option for availing the composition scheme. In the absence of statutory format, the option can be exercised by paying the service tax equivalent to 2% of the gross amount charged for the works contract. Accordingly, the payment of an amount equivalent to 2% of the gross amount charged for the works contract implies that they have opted for the composition scheme. This view has been held by the Tribunal Mumbai in the case of ABL Infrastructure Private Limited v. Commissioner of Central Excise, Nashik [2015 (2) TMI 801 - CESTAT MUMBAI] - the Appellant has exercised the option to avail the Composition Scheme for the period 2007-08. Accordingly, the demand confirmed in the impugned order along with interest and penalty is not sustainable. Appeal disposed off.
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