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2019 (8) TMI 210

..... rse charge mechanism - whether the availment of exemption by the appellant in terms of the Notification No.46/2011-ST dated 19/09/2011 is appropriate or not? - time limitation - HELD THAT:- It is a well settled position of the law that a person who claims the exemption has to prove that he satisfies all the conditions of the Notification so as to be eligible to the benefit of the same. References can be made to the Hon’ble Supreme Court Constitutional Bench decision in the case of CCE VERSUS M/S HARI CHAND SHRI GOPAL [2010 (11) TMI 13 - SUPREME COURT], MYSORE METAL INDUSTRIES VERSUS COLLECTOR OF CUSTOMS, BOMBAY [1988 (5) TMI 42 - SC ORDER], MOTIRAM TOLARAM VERSUS UNION OF INDIA [1999 (8) TMI 68 - SUPREME COURT], COLLECTOR OF CUSTOMS VERSUS PRESTO INDUSTRIES [2001 (2) TMI 133 - SUPREME COURT] and M/S HOTEL LEELA VENTURE LTD. VERSUS COMMR. OF CUSTOMS (GEN) MUMBAI [2009 (1) TMI 9 - SUPREME COURT] - It stands held in all the above decisions that onus to prove and show the satisfaction of the conditions of the Notification is on the person who claims the benefit of the same and every exemption Notification has to be read in strict sense. In the present case, the appellants have ad .....

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..... ise of the powers conferred by Sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby, exempts the taxable services provided by a consulting engineer to a client on transfer of technology from so much of the service tax leviable thereon under Section 66 of the said Act, as is equivalent to the amount of cess paid on the said transfer of technology under the provisions of the Section 3 of the Research and Development Cess Act, 1986 (32 of 1986) . Amending Notification No.46/2011-ST dated 19/09/2011 In the said notification, for the words, figures and brackets amount of cess paid on the said transfer of technology under the provisions of the Section 3 of the Research and Development Cess Act, 1986 (32 of 1986) , the following words, figures and brackets shall be substituted, namely: Amount of cess payable of the said transfer of technology under the provisions of the Section 3 of the Research and Development Cess Act, 1986 (32 of 1986), subject to the following conditions namely:- (A) The said amount of Research and Development Cess is paid within six months from the dat .....

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..... for the appellant and Shri Shiv Pratap Singh learned A.R. appearing for the Revenue. 7. The short question required to be decided in the present appeal as to whether the availment of exemption by the appellant in terms of the Notification No.46/2011-ST dated 19/09/2011 is appropriate or not. The appellants have not disputed the factual position that Research & Development Cess was not paid at the time of payment of service tax and was deposited by them subsequently. The language of the Notification is unambiguous and clear that the R & D Cess has to be paid first and then the exemption equivalent to the amount of such Cess PAID would be available to the recipient. The Notification language is unambiguous and there is no room for any intendment. As rightly observed by Commissioner, the Hon ble Supreme Court in the case of Commissioner of Sales Tax, U.P. vs. Modi Sugar Mills 12 STC 182 has observed that the Court must look clearly at the words of the statute and interpret them accordingly. While interpreting the taxing statute, the importance has to be given to the clear expression used therein and no intent can be examined in case of any unambiguity in the wordings of the N .....

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..... D Cess is required to be paid before payment of service tax. 9. The appellants have also contended that the payment of R & D Cess is only a procedural and administrative condition, which should be diluted and condoned. However, we do not find ourselves in agreement with the above stands of the appellant. If such conditions have to be taken as procedural conditions, the entire legislative exercise of introduction of the said two conditions becomes otiose and a futile exercise on the part of the Legislative. If the said two conditions are considered to be procedural, nothing remains in the Notification so as to extend the benefit of exemption to the service tax to the tune of R & D Cess paid by the importer. It is well settled law that any interpretation which renders the Notification as futile piece of Legislation has to be avoided. Inasmuch as the condition of payment of R & D Cess is substantive condition of the Notification and is not relatable to any procedural aspect, we are of the view that non-fulfillment of the same rendered the appellant disentitled to the benefit of the Notification. 10. It is again the well settled position of the law that a person who claims .....

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..... ations are very clear and required the recipient to pay R & D Cess before payment of service tax so as to avail exemption. The appellants have not given any justifiable reasons for not paying R & D Cess in time and for availing exemption without such payment of R & D Cess. As such, we agree with the Adjudicating Authority in respect of the invocation of longer period of limitation. 12. In respect of penalty, the Adjudicating Authority referred to the case law as follows:- In Corpus Juris Secundum, vol.85, at p.580, para 1023, it is stated thus:- A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws. R.S. Joshi v. Ajit Mills Ltd. (SCC p. 110, para 19) Even here we may reject the notion that a penalty or a punishment cannot be cast in the form of an absolute or non-fault liability but must be preceded by mens rea. The classical view that no mens rea, no crime‟ has long ago been eroded and several laws in India and abroad, especially regarding economic crimes and departmental penalti .....

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