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2015 (11) TMI 102 - CESTAT MUMBAI

2015 (11) TMI 102 - CESTAT MUMBAI - 2016 (42) S.T.R. 411 (Tri. - Mumbai) - Waiver of penalty u/s 80 - service tax was paid at the instance of Audit team - Reverse charge mechanism - Business Auxiliary Services and Management Consultant Services - Held that:- there is no case of contumacious conduct and/or suppression of facts, or any case of mis-statement with intention to evade the payment of duty/tax is made out against the appellant. The explanation given by the appellant, at the very first i .....

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without waiting for any instruction from the Revenue, they have deposited the service tax, short paid along with interest. - appellant have been paying about ₹ 15 crores of Central Excise & Service Tax P.A. during the period in question. Further the appellant being entitled to CENVAT credit on the service tax paid on the input services, there is no incentive to evade the service tax liability. Thus I hold that the appellant is entitled to the benefit under the provisions of Section 80 of t .....

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Choudhary: The appellant M/s Solar Industries India Ltd. manufacturer of excisable goods, is in appeal against Order-in-Appeal dated 19/11/2013, by which the penalty imposed on the appellant have been confirmed under Section various Sections. 2. The brief facts are that the appellant is a manufacturer, and used input services under the category Business Auxiliary Services and Management Consultant Services, among others, and is registered with the Department under the provisions of the Central E .....

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ry Services and Management Consultant Services received from abroad. In the statement recorded of the Authority signatory, Shri DB Padgaonkar, it is explained that the amount shown in the Ledger, duly signed by him, pertains to solar industries India (Pvt.) Ltd. He also stated that they were paying the service tax regulary, however some amount of service tax appears to be short paid, due to lack of communication between the accounts Department and the person looking after the Central Excise matt .....

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as commission agent and for selling of the goods abroad and service tax is short paid during the said period. A letter was issued dated 19.08.2010 by the Superintendent directing the appellant to deposit the service tax short paid with the appropriate interest. On verification of records during audit it was noticed by the Revenue that the appellant have neither paid the amount of service tax on the taxable amount on account of commission/consideration to the foreign commission agent, nor declare .....

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ly recorded in the books of accounts, maintained in the ordinary course of business. It was further pointed out that the records of the appellant have been under continuous audit by the Revenue since November, 2007 and periodical audits doing the years 2009, 2010, 2008, etc. Further explained that in its audited financial statement, and accounts discloses the value of transactions in foreign currency, under various heads. In the present case when audit asked the appellant to reconcile the figure .....

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y deposited the service tax short paid on 17.08.2010 along with interest. It was further explained that due to lack of coordination and clerical error in the office of the appellant dealing with the banking matters and the officer dealing with the Central Excise and Service Tax matters, resulted in short payment of service tax. As the payment for the services received from abroad is paid in foreign currency, the officer dealing with the Excise matters prepares returns and deposit the tax on the .....

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ith Rule 7C of the Service Tax Rules for delayed filing, of each returns, further penalty was imposed being 2% of such tax per month or ₹ 200/- per day whichever is higher for non-payment of service tax on the due dates and further penalty of ₹ 2000/- was imposed under Section 77 and penalty equal to the amount of tax was imposed under Section 78. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals) who was pleased to reject the appeal, holding that the a .....

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ssue of show-cause notice, the learned Commissioner found that the tax was paid only on being pointed out by the audit. Had it not been detected by the audit it would have remained unnoticed and the appellant would not have paid the appropriate tax. So far the ground of Revenue neutrality is concerned, the learned Commissioner held that the appellant being assessable of Central Excise and Service Tax assessee, was aware of obligations and further failed to deposit the tax in time as required und .....

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he appellant, that the transaction being duly recorded in the books of accounts maintained in the ordinary course of business, the tax short paid is due to lack of coordination between the two departments of the appellant. The said explanation has not been found to be untrue and accordingly the learned Commissioner is in error in rejecting the same. It is further urged that the appellant had deposited the amount of tax along with interest, found short paid even before the first communication/not .....

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year for 2008-09 and 2009-10 is about ₹ 26 lakhs per annum, which is fully adjustable with the Central Excise liability. In view of the Revenue neutrality there is no incentive to evade the tax leviable towards service tax, on the reverse charge basis. The learned Counsel further relies on the ruling of the Apex Court in the case of CCE V/s. Pals Microsystems Ltd wherein it has been held that there has was some finding to the effect that there was a fraud or of wilful misstatement or supp .....

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110% /115% of cost of production, the question was whether duty payment should conform to requirement of Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000. The demand of duty was confirmed along with interest and equal penalty under section 11AC by the adjudicating authority. It was held by the Tribunal that the demand was time barred. The Tribunal also found that the entire duty paid by the assessee in respect of clearances of MS tanks and radiators to th .....

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ty paid by him and not by the way of availability of the credit to the buyer of the assessees manufactured goods, the assessee cannot be accused of having contravened the rules with intent to evade the payment of duty and extended period under proviso to section 11A(1) would not be invocable. Accordingly; the Tribunal applied the ratio of the larger bench judgment and held that the larger period of limitation for short payment of duty would not be available to the revenue. It therefore held tha .....

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serving that there no reason to interfere with the finding of fact that if a scrutiny had been made by the Range officer of the ER-1 returns, that would have revealed that the assessee had cleared its MS Tanks and radiators to the owning company for the manufacture of transformers. This indicated that there was no fraud, collusion, misstatement or suppression of facts. Besides since the situation was revenue neutral, no intent to evade the payment of duty could be ascribed to the assessee. Once .....

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Act, 1994. 6. The learned A.R appearing for the Revenue supports the impugned order. He further points out that it had been rightly held in the impugned order that the appellant have deliberately defaulted in payment of the current service tax liability. For that the discrepancy came to light only when the Revenue Audit directed the appellant to prepare the reconciliation with respect to the payments made in foreign currency as appearing in the financial statements along with the tax liability. .....

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that weighment of the stock material was done on eye estimate basis as for such a huge quantity of 7.601 MT a number of days would be required to load the trucks and then take them to weighment bridge and for loading and unloading the same to weigh the material a number of times. Under such facts and circumstances the Honourable High Court noted that the finding recorded by the assessing authority nowhere stated that there was any suppression of facts or mis-statement or fraud with the intention .....

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ings (I) Pvt. Ltd. Vs. CCE- 2010 (262) ELT 720 wherein the issue was the inclusion of the value of the moulds/dies which were supplied free of cost by buyer for the manufacture of final products by the aforesaid assessee. Therein, the defence was taken that there was conflict of decisions of the Tribunal and the issue finally settled in favour of revenue by the Larger Bench in Mutual Industries Ltd. The Tribunal held that the appellant had continue to exclude the amortized cost of moulds from th .....

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case. It was thus held that the appellant had deliberately excluded the amortized cost of moulds from the assessable value. It was held that the demand of duty for the extended period was not time barred. The issue of Revenue neutrality pleaded by the assessee appellant was also not accepted and it was held that the demand of duty for the extended period cannot be resisted by the appellants on the premise that whatever duty paid by them would ultimately be available as Modvat/ Cenvat credit to t .....

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