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2018 (4) TMI 662

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..... wrongly claiming the said payment has in fact defaulted in making true disclosures of facts. The claimed CENVAT credit which is neither shown as availed nor utilized in the statutory records like, ST-3 returns/ CENVAT Register and disputed by Revenue, cannot be considered as valid payment towards their Service Tax liability. The Bench do not find it a fit case for settlement under Section 32F(5) of the Central Excise Act, 1944 as made applicable to Service Tax matters under Section 83 of the Finance Act, 1994 since the applicant has not paid the entire accepted Service Tax liability along with applicable interest. The application filed by the applicant M/S. Rajasthan Crane Services is rejected as under Section 32E (1) of the Central Excise Act, 1944 as made to Service tax matters under Section 83 of the Finance Act, 1994 - application dismissed. - F. No. 44/ST/KNA/2017-SC(MB)SA(ST) 122/2017 - Final Order No. 132/Final Order/ST/KNA/2017, - Dated:- 21-8-2017 - S/Shri D.P. Singh, Vice-Chairman and Brojen Thamar, Member Shri Arjun Radhakrishnan Nair, For The Assessee. This order disposes of the application filed by M/S. Rajasthan Crane Service, situated at C-13 .....

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..... accounts, the service tax liability of M/S. Rajasthan Crane Services was worked out to ₹ 1,88,23,722/- for the period 2008-09 to 2012-13. It is seen that M/S. Rajasthan Crane Services has paid Service Tax for the period 2008-09 amounting to ₹ 18,22,221/- but only paid part of the Service Tax liability amounting to ₹ 25,59,343/- for the period 2009 10 to 2010-11. They had paid total Service Tax of ₹ 43,81,564/- prior to visit of the officers. Further during the course of investigation, after repeated persuasion, recovered Service Tax amounting to ₹ 60,07,257/-. Hence differential Service Tax amounting to ₹ 84,34,901/- for the period from 2009-10 to 2012-13 was still recoverable from the assessee. 2.4 Investigations revealed that RCS were involved in the business of providing Hydraulic Cranes on hire basis which is required in the construction activities, and while rendering their services under taxable category 'Supply of tangible goods' they collected the Service Tax on the full consideration of the value of the services but failed to deposit the tax element to the Government Treasury from time to time. They failed to assess the exact .....

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..... why the Service tax amounting to ₹ 1,03,88,821/paid by the assessee, should not be appropriated towards the Service tax liability as mentioned in this para. (b) Interest on delayed payments of Service Tax for the year from 200809 to 2012-13, should not be demanded and recovered from them under Section 73 of the Finance Act, 1994. Interest amounting to ₹ 15,00,361/- paid by the assessee, should not be appropriated towards the interest as mentioned in this para. (c) Penalty should not be imposed on them under Section 77 of the Finance Act on each of the following contraventions, (i) Failure to furnish information and documents as called for in Accordance with the provisions (ii) failure to appear before proper officer in response to the summons issued, and (iii) failure to furnish the prescribed ST-3 return as required under of the section 70 of the Finance Act, 1994 as amended, read with rules 7 of the Tax Rules, 1994; (d) penalty should not be imposed on them under Section 78 of the finance Act, 1994 for committing causing collusion, giving wilful mis-statement and suppressing the material facts by suppressing value of taxable services with mala fide i .....

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..... entative of the applicant were recorded. During the course the investigations the applicant submitted all the necessary documents relating to the capital goods and the input services for the purpose ascertaining amount of Cenvat credit available to the applicant. The amount of Service Tax actually available was ₹ 83,67,707/-, whereas the applicant as a result of a mistake committed claimed availability of Cenvat credit of ₹ 1,09,99,233/-. There is an error committed with reference to an amount of ₹ 28,56,657. At the same time in relation to the amount of tax paid in cash while the applicant had actually paid an amount of ₹ 1,05,23,636 what was claimed to be paid is ₹ 1,01,71,667/- which is less by ₹ 3,51,969/-. Effectively a total amount of ₹ 1,88,91,343 has been paid through cash as well as Cenvat credit for the period from 2008-09 to 2012-13. The breakup of the same is as under: Amount paid in cash - ₹ 1,05,23,636/- Amount paid through credit ₹ 83,67,707/- Total amount paid ₹ 1,88,91,343 Amount deposited towards interest - ₹ 15,00,361/- Amount of tax demanded in the notice - ₹ 1,88,23,722/- .....

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..... gation. The Id- Advocate replied that they have filed ST-3 returns late and availment of Cenvat credit is duly mentioned in all returns. The bench, however, directed the applicant to submit all the related services tax payment document and other relevant records to the jurisdictional revenue authorities for verification within three days. Revenue shall verify the correctness/ admissibility of the Cenvat credit availed and furnish their verification report clearly specifying whether the said Cervat credit is admissible to them. Revenue will submit their report to the Bench within 10 days of the receipt of records from applicant with a copy to the applicant who shall also file their reply of any, within another 7 days. 6.3 Revenue has neither filed their statutory report nor hearing. The Bench directed the revenue to file their statutory report along with the above-mentioned verification report with a copy to the applicant. 7. Ld. Commissioner of service tax-VII, Mumbai has submitted their interim report dated 19-06-2017 with reference to direction given in personal hearing held on 19-05-2017. In the said report following submission are made: - (a) M/s. rajasthan crane servi .....

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..... in the absence of month/ quarter wise details of taxable service rendered in the SCN, the value of taxable services shown In the ST-3 returns were tallied with the value shown in the Exhibit-C and the following discrepancies were noticed: Service Tax payable as per Exhibit-C Service Tax payable as per ST-3 Due date Period Date of payment 2,24,729 3,96,916 5-7-2009 April to June, 2009 18-2-2010 2,25,725 3,20,099 5-10-2009 July to September, 2009 29-7-2010 Therefore, the payment details shown and interest calculation thereon appears to be incorrect. As per interest calculation sheet the assessee has calculated interest @ 13%. However, the effective rate of interest prevalent at the time of payment in most of the cases is 18% (notification 14/2011-S.T., dated 1-3-2011). Therefore, it appears that they have not paid interest correctly. (e) On receipt of the record of hearing held on 19-5-2017, as directed by the Ho .....

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..... t debit proof for Service Tax payment; (iv) Interest and Service Tax payment proof along with relevant challans. (iii) Out of the above said documents, our clients have already submitted documents mentioned at Sr. Nos. (ii), (iii) (iv). As regards the Cenvat it is contention of our clients that since the Chartered Accountant who was dealing with the matter and was maintaining the said account is not available as he is travelling abroad and, therefore, our clients are not in a position to submit the same. (iv) Subsequently, our clients also received a letter dated 20-6-2017, which a Report dated 19-6-2017 submitted by the Commissioner to the Hon'ble Settlement Commission was enclosed. In the said interim report referring to the show cause notice in respect of which the proceedings before this Hon'ble Commission are in progress, it is mentioned that the show cause notice is with reference to the Service Tax liability of ₹ 1,88,23,722/- for the period from 2008-09 to 2012-13. In the said interim report, it is also categorically mentioned that our clients had stated that our clients paid an amount of ₹ 1,05,23,636/- through cash and ₹ 3,67,707/- by .....

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..... ,717/- is available towards capital goods. In the year 2012-13 while there is no credit available in relation to capital goods, the Cenvat credit available in relation to the inputs is ₹ 17,24,872/-. The total amount of Cenvat credit available in respect of inputs during the years 2009-10 to 2012-13 is ₹ 23,10,275/- whereas the total amount of Cenvat credit available in respect of the capital goods amounts to ₹ 55,75,467/-. Thus, the total credit available these y-ears is ₹ 83,85,741 / -. (vi) As regards the purported discrepancy or difference in the total amount of Service Tax paid through cash, we request you to kindly refer to the chart available at pages 2 to 4 of the application along with the challans enclosed in the said application and available at pages 5 to 96. The total amount paid by our clients as will be seen from the said challan and the chart is ₹ 1,05,23,636/-. (vii) As regards the interest, it is mentioned in the interim report that the interest has not been calculated in accordance with the law and the rate applicable at the particular time. In the said report, it is mentioned that our clients have calculated the interest at 13 .....

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..... 7; 1,88,23,722/- was demanded. Applicant has filed impugned application for settlement of their case pertaining to said SC dated 19-10-2013 8.2 Applicant has contended that they had declared value of service provided by them, in their books of accounts and they were paying Service Tax since 2009 though there was delay on their part in payment of Service Tax. They have filed ST-3 returns for the period 2009 on wards on 20-10-2013 and also pas: Service Tax and interest before issue of SCN. They claimed to have paid service Tax of ₹ 1,05,23,636/- by way of cash deposit and ₹ 83,67,707/- by way of debit in cenvat credit account. They have requested for immunity from penalty and prosecution considering the above said facts and the co-operation extended by them to Revenue. 8.3 Revenue in their report has stated that the applicant has paid ₹ 92,14,700/- after excluding the payments made in 2008-09 and 2013-14 and short paid interest by calculating the same @ 13% only. Revenue pointed out that admissibility of cenvat credit of ₹ 83,67,707/- could not be verified as the applicant did not submit the documents despite directions of the Bench and their letters da .....

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..... o discrepancy pointed out by Revenue and therefore, they are eligible for the said Cenvat credit. In this regard, Bench finds that the applicant did not file statutory ST-3 returns at the relevant time. They collected Service Tax from their client but did not pay the same to the Government. The Bench notes that in this case neither the ST-3 returns were filed at the relevant time nor the applicant produced the Cenvat credit register evidencing availment and debit of Cenvat credit. It is also noticed that no original invoices were produced by the applicant before Revenue authorities. Despite specific directions from this Bench to produce original records for verification before Revenue, they are still claiming that copies of invoices are submitted. There is no evidence that they had complied with the procedure for availment and debit of Cenvat credit as laid down in the Cenvat Credit Rules, 2004. The applicant failed to submit the relevant records before jurisdictional Revenue authorities as directed during the hearing held on 19-5-2017. The contention of the applicant that Cenvat records were verified during investigations and Revenue did not point out any discrepancy with regard t .....

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