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TMI Blog2015 (1) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... ication together for decision in the matter. 2. Briefly stated, the appellants were registered with the department under Service Tax centralized registration No. AABCM4314KSD005 and were engaged in providing services in the categories of Goods Transport Agency, Technical Testing & Analysis, Business Auxiliary Services, Management or Business Consultants Services, Intellectual Property Service, Consulting Engineering Services, Manpower Recruitment or Supply Agency, Business Support Services, Online Information & data Base Access or Retrieval Service and Commercial Training or Coaching Services. 2.1 During the audit of the records of the appellants, it was observed that as per Balance Sheet for the year 2009-10, the appellants had made a payment of Rs. 25,52,53,374/- in foreign currency in respect of Business Management, Online Information & Database access Services and Business Auxiliary Services, whereas they had paid service tax on an amount of Rs. 25,26,67,577/- resulting into short payment of service tax of Rs. 2,66,337/-. On being pointed out by the audit, the appellants deposited Service Tax liability amounting to Rs. 2,66,790/-(inclusive of cesses) along with inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. 181 was not correct as the fact of present case were different from the case relied upon; iii. That reliance is placed on decision in the case of M/s. Paul Merchants Ltd. and Ors. v. CCE reported as 2012-TIOL-1877-CESTAT-Del = 2013 (29) S.T.R. 257 (T), wherein the Hon'ble Tribunal had held that difference arising out of fluctuation in exchange rate is gain but not in any way is a consideration for providing taxable service; that fluctuation in exchange rate may result in profit or loss to the transaction; that if gain is to form part of assessable value, loss is deductible; that but such aspect of transaction is beyond the scope of the Act, which is not a law to tax profits or gains of business; that therefore, the assessable value shall be reduced to that extent of gain in foreign exchange if included in the assessable value; iv. That without prejudice to the submission made herein above and in the alternative, the appellants placed reliance on circular issued by the C.B.E. & C. vide DOF No. 334/1/2008-TRU, dated 29-2-2008 wherein it had been clarified that service tax is leviable on taxable services provided by the person liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contention they relied upon following judgments :- * Travancore Rayons Ltd. v. UOI - 1978 (2) E.L.T. J378 (S.C.); * UOI v. Kamalakshami Finance Corporation - 1991 (55) E.L.T. 433; * Tata Motors Ltd v. UOI - 2009 (244) E.L.T. 337 (Bom); viii. That extended period of limitation was not invokable as the appellants had not suppressed anything from the revenue; that the adjudicating authority had also not brought on record any evidence of suppression on the part of the appellants; that therefore, extended period was not invocable in their case; that the department was aware of the factum regarding discharge of service tax by the appellants, in as much as a show cause Notice C.No. V(ST)15/CE/91/ Commr Adj/CHD-I/10/1672, dated 21-10-2010 was issued for prior period; that in support of their contention they relied upon the following case laws/C.B.E. & C. Circular: * Aban Loyd Chiles Offshore Limited v. CC - 2006 (200) E.L.T. 370 (S.C.); * Pushpam Pharmaceutical Co. v. CCE - 1995 (78) E.L.T. 401 (S.C.); * C.B.E. & C. Circular No. 312/28/97-CX, dated 22-4-1997; * Nizam Sugar Factory v. CCE - 2008 (9) S.T.R. 314 (S.C.) = 2006 (197) E.L.T. 465 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest was payable or not? iv. Whether penalty was imposable or not? 6. In respect of demand of service tax amounting to Rs. 2,66,337/-, I find that show cause notice dated 1-5-2012 was issued because the appellants during Financial Year 2009-10, had made a payment of Rs. 25,52,53,374/- in foreign currency in respect of Business Management, Online Information & Database access Services and Business Auxiliary Services, whereas they had paid service tax on an amount of Rs. 25,26,67,577/- resulting into short payment of service tax of Rs. 2,66,337/-. On being pointed out by the audit, the appellants deposited Service Tax liability amounting to Rs. 2,66,790/- (inclusive of cesses) along with interest amounting to Rs. 56,829/- vide GAR-7 Challan dated 19-9-2011. Further I find that the appellants had contended that on the date of booking of expenses in books of account of the appellants, prevalent exchange rate was adopted which also formed basis for determination of service tax payable, thus leading to difference in the amount booked vis-à-vis amount paid. Further, the appellants while relying on the judgment in case of M/s Paul Merchants Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. Explanation 2 - Usual place of residence, in relation to a body corporate, means the place where it is incorporated or otherwise legally constituted." 6.1 "67. Valuation of taxable services for charging Service tax - (1) Subject to the provisions of this Chapter, service tax chargeable on any taxable service with reference to its value shall,- (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that the amount booked initially was Rs. 25,26,67,577/- on which the appellants paid service tax, whereas the actual amount paid later on by the appellants, to the service provider, was Rs. 25,52,53,374/- in foreign currency, resulting into short payment of service tax of Rs. 2,66,337/-. Thus, I hold that service tax demand of Rs. 2,66,337/- is sustainable against the appellants on account of short payment and the adjudicating authority had rightly upheld the same. Further, I find that the appellants had placed reliance on the judgment in case of M/s. Paul Merchants Ltd. and Ors v. CCE reported as 2012-TIOL-1877-CESTAT-Del. = 2013 (29) S.T.R. 257 (Tri.) I do not agree with the appellants in this regard because as discussed supra, there is no provision of taxing such loss or gain. The ratio of the case cited by the appellants is not applicable in the instant case as the facts and circumstances of the case are entirely different and the logic put forth in the case law cited does not find any place in the case in hand. Rather, the appellants themselves agree that such aspect of transaction is beyond the scope of the Act. Further, Section 67 clearly states about the concept o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid : Provided that the Central Excise Officer may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1- For the removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the amount paid by the person under this subsection and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the Central Excise Officer, but for this sub-section. Explanation-2- For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made there under shall be imposed in respect of payment of service-tax unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... five ingredients/reasons is/are there, the limitation of extended period as provided under proviso to Section 73(1) of the Act is invokable as held in the case cited supra. Therefore, due to suppression on part of the appellants, provisions of Section 73(1) of the Act, are attracted in the present case. Accordingly, I hold that the adjudicating authority has rightly invoked the clause of extended period. Thus I hold that as provided under Section 73(4) of the Act, once the extended period has rightly been invoked, the appellants had been rightly issued with the show cause notice, even if they had deposited the differential service tax alongwith interest before issuance of show cause notice. Thus, the reliance placed by the appellant on various judgments, cited above, is not tenable in the instant case. Further, it is a well settled law that if the words of a statute are in themselves precise and unambiguous, nothing more is necessary to expound those words in their natural and ordinary sense, as the words themselves best declare the intention of the legislature. The intention of the legislature is that if any person breaches the provisions of the Law, then it will attract penalty a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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