9911796707
TMI Blog2019 (8) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... are situated in SEZ, while one unit is situated outside SEZ. A team of officers of the Anti-Evasion Unit of Customs, Central Excise & Service Tax, Commissionerate visited the premises of the appellant on 8 December, 2010 and noticed that the appellant was liable to pay service tax on "Selling Commission‟ services provided in relation to export of goods to foreign agents in foreign currency under reverse charge mechanism as provided for in Section 66 of the Finance Act, 1994 (hereinafter referred to as the Act). The appellant, however, informed the team of Officers that it was not liable to pay service tax in view of the exemption granted under Section 26 of the Special Economic Zone Act, 2005 (hereinafter referred to as 2005 Act). The period of dispute is from 3 March, 2009 to 31 March 2011. However, as the Department had raised this issue, the appellant states that it deposited Service Tax to the extent of Rs. 10,26,947/- and interest to the extent of Rs. 1,28,857/-. This fact was informed the Department by letters dated 31 March, 2011. 3. The appellant thereafter claimed refund of the aforesaid amount in terms of the Notification No.9/2009 dated 3 March, 2009 and Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be appropriated against the said liability. (b) Appropriate interest on the amounts of Service Tax, as per para (a) above, should not be charged and recovered from them under Section 75 of the Finance Act, 1994 and the amount of interest of Rs. 1,28,857/- (Rs. One Lac Twenty Eight Thousand Eight Hundred Fifty Seven only) deposited by them during the course of investigation should not be appropriated against the said liability. (c) Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994." 5. The appellant submitted a detailed reply dated 27 February, 2013 to the aforesaid show cause notice dated 18 January, 2013 and denied the allegations contained in the show cause notice. It was stated that though the appellant had deposited the entire amount of service tax as also interest and informed the Department but still it was served with a show cause notice which would be contrary to the provisions of Section 73(3) of the Act. The appellant also pointed out that there was no suppression of facts with an intention to evade payment of service tax since prior to 3 March, 2009, when Notification No.9/2009 was issued, the appellant was entitled to full exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the appellant regarding the provisions of Section 26 of the 2005 Act and the Notification dated 3 March, 2009 but observed that since the appellant was a registered service tax assessee, it was expected to be aware of the service tax laws and ignorance of law cannot be made an excuse. It is only on this basis that the Adjudicating Authority framed an opinion that appellant had not paid service tax under the reverse charge mechanism with an intention to evade payment of service tax. 8. There separate appeals were filed by the appellant to assail the order dated 14 February, 2014. As stated above all the three appeals were dismissed by the Commissioner (Appeals) by three separate identical orders, each dated 24 July, 2014. The pleas of the appellant regarding Section 73(3) of the Act and that there was no suppression of facts with intention to evade service tax, were rejected. 9. In regard to the suppression of facts, the Commissioner (Appeals) observed as follows:- "4.4 I agree with the arguments of the adjudicating authority. If the intentions of the appellant were honourable, they would not have taken a year to deposit the service tax due. The pleas of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt submitted:- (i) That there was no suppression of facts, much less suppression with an intention to evade payment of service tax as not only was the payment reflected in the books of account but even service tax was paid by the appellant when the Department brought to the notice of the appellant that in terms of Notification dated 3 March, 2009 exemption from payment of Service Tax was by way of refund. Elaborating this submission learned counsel pointed out that prior to the issuance of the Notification dated 3 March, 2009, the payment of service tax was exempted under Section 26 of 2005 Act; (ii). That the Commissioner (Appeals) completely failed to appreciate the aforesaid submissions made by the appellant and thereby committed an illegality; and (iii) That even otherwise, as the appellant had deposited the entire amount of service tax with interest prior to the issuance of show cause notice, the Department could not have issued a show cause notice in view of the provisions of Section 73(3) of the Act. 11. Learned Authorized Representative of the Department, however, supported the impugned orders and submitted that they do not call for any interference in this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax and in any case when the Department brought to the notice of the appellant the Notification dated 3 March, 2009, the appellant deposited the entire service tax as also interest. 15. The contention of the appellant has to be examined keeping in mind the provisions of Section 26 of the 2005 Act. This section provides exemption from payment of service tax subject to the conditions laid down in sub section (2). It is in terms of sub section (2) of Section 26 of the Act that the Notification dated 3 March, 2009 and the subsequent Notification dated 1 March, 2011 superseding the earlier Notification were issued. The amount paid by the appellant towards the "Selling Commission‟ were through banks and was reflected in its books of account. It cannot, therefore, be said that this amount was paid in a clandestine manner. The moment the Department brought to the notice of the appellant, the Notification dated 3 March, 2009 under which it was required to pay service tax under a reverse charge mechanism but could claim refund subsequently, the appellant deposited the entire amount as also the interest. It, however, claimed refund as provided for in the said notification and r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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