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2016 (3) TMI 140 - CESTAT NEW DELHI

2016 (3) TMI 140 - CESTAT NEW DELHI - TMI - Demand of Service tax - Inadmissible Cenvat credit taken - Appellant took Cenvat credit on electricity and water charges during the period 2004-05 and paid service tax along with interest - Held that: the demanded amount relating to Cenvat credit taken on electricity and water charges alongwith interest was paid on 04.05.2007/ 07.08.2007 i.e. before the issuance of the show cause notice. It is seen from the show cause notice and from the impugned order .....

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mand.

Demand of Service tax - Brokerage/ commission paid to commission agent - Appellant pleaded that it paid commission to various agents, foreign as well as Indian, against services received from them for finalising deals with reinsurers but Such agents would not come in the category of insurance agents defined in Section 65(54) of the Finance Act, 1994 - Held that: the agents in question were not soliciting or procuring insurance business including business relating to the continua .....

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sm was not applicable and therefore, the appellant being service recipient was not liable to pay service tax. In addition the liability to service tax in respect of commission paid to persons based abroad would not fall on the appellant also because reverse charge mechanism in such cases became applicable from 18.04.2006 referred to Supreme Court Judgment in the case of Indian National Shipowners Associations 2009 (12) TMI 850 - SUPREME COURT OF INDIA while period involved here is prior thereto. .....

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2004-05 - Held that: the payment of excess amount in 2004-05 shows the bonafies of the appellant and there is no evidence which supports the allegation of wilful mis-statement or suppression of facts on the part of the appellant with regard to the short payment of the said amount of duty.Therefore, the extended period of five years is not invocable making atleast this component of demand time barred by stating the case of BSNL vs. CCE, Ahmedabad 2008 (12) TMI 87 - CESTAT, AHMEDABAD, where it ha .....

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terms of which service tax demand of ₹ 52,01,062/- alongwith interest and penalties was confirmed. The impugned demand comprises the following components: (i) ₹ 3,49,642/- on account of reverse charge mechanism on the ground that the appellant paid brokerage / commission to foreign broker / commission agent from 2002 to 2005-06 and Indian agents/ brokers during the period 17.01.2001 to 31.03.2005 but did not paid service tax thereon. (ii) ₹ 48,20,574/- on the ground that this w .....

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ty and water charges during the period 2004-05 which was not admissible. However, this amount has been deposited vide TR-6 challan dated 04.05.2006 alongwith interest of ₹ 12,679/-. (paid vide TR-6 challan dated 07.08.2007). 2. The appellant has contended as under: (i) The demand of ₹ 3,49,642/- was confirmed in respect of services which were received from insurance intermediaries and not from insurance agents. The services of various brokers (foreign and Indian) was received by the .....

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ce for the period 2002-03. For the said period the provisional assessment of the appellant was already finalised vide order dated 11.05.2005. Further there was excess payment of service tax of ₹ 1.25 crores during 2004-05 on account of similar reconciliation problems which is not disputed. It was the appellant itself which apprised the audit team of said short payment due to reconciliation problem and thus there was no malafide intention to evade payment of service tax. It is a public sect .....

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t be attributed to public sector undertaking owned by Government of India. (iv) The period involved in this case is prior to 18.04.2006 when reverse charge mechanism was not applicable. 4. Ld. DR on the other hand supported the impugned order and contended that the adjustment of short payment cannot be made from the excess payment made subsequently as in respect of excess payment, the provisions relating to refund and unjust enrichment would apply. 5. We have considered the submissions of both s .....

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impugned demand and therefore in terms of sub-section 3 of Section 73, this amount need not have been made part of the show cause notice; in other words, no show cause notice was required to be served to the appellant in respect of this amount in which case the question of imposing any penalty in respect of this component of demand would not arise. 6. As regards the demand pertaining to service tax on brokerage/ commission paid to commission agent , the appellant has pleaded that it paid commiss .....

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licensed under section 42 who receives or agrees to receive payment by way of commission or other remuneration in consideration of his soliciting or procuring insurance business including business relating to the continuance, renewal or retrieval of policies of insurance . It is evident that the agents in question were not soliciting or procuring insurance business including business relating to the continuance, renewal or retrieval of policies of insurance; they were engaged to help out is fina .....

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eneral insurance business or the life insurance business, as the case may be, in India. It is evident from the said rule that the liability of the appellant under reverse charge mechanism would arise only in relation to service rendered to it by insurance agent. As the commission was paid by the appellant to persons who did not qualify to be called insurance agents the reverse charge mechanism was not applicable and therefore, the appellant being service recipient was not liable to pay service t .....

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77; 48,20,574/- arising on account of the reconciliation of figures for the year 2002-03 it is seen that the said demand for the period 2002-03 for which provisional assessment was finalised vide order dated 11.05.2005. It was only later when the appellant further reconciled the figures, that it noticed the discrepancy as contained in the table reproduced earlier and it was the appellant only who informed Revenue about it. In para 5.2 of the impugned order the adjudicating authority has noted th .....

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ts (para 3 and 4) are reproduced below: 3. As per Section 68(1) of the Finance Act, 1994, every person providing a taxable service is required to pay service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed. Further as per Section 70 of the Finance Act, 1994, every person liable to pay service tax shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and as such frequency as may be prescribed. Since M/s O .....

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uppression of facts, or contravention of any of the provisions of this Chapter or of the rules made there-under with intent to evade payment of service tax, the Central Excise Officer may, within a period of 5 years from the relevant date serve notice on the person chargeable with the service tax, which has not been levied or paid. As the fact regarding payment of brokerage/ commission paid to foreign brokers/ commission agents and Indian agents/ brokers and the correct value of taxable service .....

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of facts on the part of the appellant. The appellant has contended that the said short payment can be adjusted out of the excess amount of ₹ 1.25 crores made during the period 2004-05 citing CESTAT order in the appellant s own case reported at 2006 (3) STR 587 (Tri. Del.). We have perused the said judgment which in its para 5 observed as under: 5. In this case admitted facts are that the appellant asked for provisional assessment and assessments were finalised for the period April, 1997 t .....

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cess payment of service tax is to be adjusted while computing the demand for short payment of service tax . Although, we do not find any legal basis cited in the said judgment to allow adjustment of duty short paid out of the duty paid in excess, the fact remains that this judgment has been passed in the appellant s own case and based on that judgment the appellant has pleaded that it should be allowed to adjust the said short payment of ₹ 48,20,754/- out of the excess service tax paid dur .....

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