TMI Blog2023 (6) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... ul suppression established in the findings by the adjudicating authority. Since the entire amount of taxalong with interest has been deposited well before the issuance of the Show Cause Notice, the Notice need not have been issued as per Section 73(3) of the Finance Act, 1994. Therefore, the penalties of Rs.34,443/- and 1390/- imposed in the impugned order is liable to be set aside - the same is set aside. Demand of Service Tax of Rs.20,14,912/- along with interest and penalty under Rule 6 of Credit Rules - Appellant has engaged himself in trading of scrips on their own account, which is an exempted service - HELD THAT:- The reversal of proportional credit under Rule 6 has been settled by the Hon‟ble Telangana High Court in the case of M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT ] wherein it has been held that the Department cannot raise the demand of the amount exceeding the proportionate reversal pertaining to the common input services. Rule 6(3) of the Credit Rules merely offers options to an output service provider who does not maintain separate accounts in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned orders are not sustainable. Appeal allowed in part. - Service Tax Appeal No. 78525 of 2018 - FINAL ORDER No. 75721/2023 - Dated:- 16-6-2023 - HON BLE MR. ASHOK JINDAL MEMBER ( JUDICIAL ) And HON BLE MR. K. ANPAZHAKAN MEMBER ( TECHNICAL ) Mr. Rajeev Agarwal Mr. Amit Jain , CA Advocate for the Appellant Mr. Joydip Chattopadhyay , Authorized Representative for the Respondent ORDER PER K. ANPAZHAKAN : Brief facts of the case are that the Appellant is a provider of stock broking Service, Banking and Financial Service etc. On the basis of audit conducted by the Service Tax Commissionerate, a show-cause notice dated 13/11/2017 was issued to the Appellant demanding Service Tax as below: (i) Rs.5,09,45,857/- on account of Late Payment Charges collected. (ii) Rs. 2,29,621/- and Rs 9264/- on account of non-reversal of Cenvat credit under Rule 6 of Cenvat Credit Rules.. (iii) Rs 20,14,912/- on account of Trading of Scrips on own account. (iv) 17,72,562/- on account of reimbursement expenses. 2. The Notice was adjudicated by the Commissioner videOrder-in-Original dated 25.04.2018, confirming the above said demands along with inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f contract - Taxability of - Compensation/Penalty received from buyers by coal mining/supplier company on short lifted/unlifted quantity of coal, security deposit/earnest money deposit forfeited for non-compliance of contract by contractors for providing various services and liquidated damages from raw material supplier, not to be considered as consideration for tolerating an act and hence, not leviable to Service Tax under Section 66E(e) of Finance Act, 1994 as declared services particularly when contract nowhere provided obligation on assessee to refrain from an act or tolerate an act or a situation and flow of consideration therefor - Liquidated damages/penalty cannot be considered towards any service per se, since neither assessee carrying on any activity to receive compensation nor there can be any intention of other party to breach or violate contract and suffer a loss - Penalty provision stipulated in contract for breach thereof cannot be considered as a consideration for a contract - Revenue s contention that such compensation synonymous with tolerating an act or situation for breach of contract in view of Supreme Court decision in Fateh Chand v. Balkishan Das [AIR 1963 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is an exempted service. Since the Appellant has taken credit on common input services such as Telecommunication, Renting of immovable property etc, the Appellant was asked to pay an amount equal to 6% or 7% of the value of exempted service under Rule 6(3)(i) of the Cenvat Credit Rules. 5.2 The Appellant stated that even if trading of scrip on own account is considered as exempted service, they are liable to reverse only the proportional credit attributable to common input services. Accordingly, they have calculated the proportional credit liable to be reversed and deposited an amount of Rs.4,54,869/- along with interest of Rs.3,30,897/-. In the impugned order the adjudicating authority has not given any finding for rejection of this payment by the Appellant. The adjudicating authority only said that the Appellant‟s own calculation not acceptable. 5.3 We find that the reversal of proportional credit under Rule 6 has been settled by the Hon‟ble Telangana High Court in the case of Tiara Advertising Vs UOI 2019 (30) GSTL 474 (Telangana) wherein it has been held that the Department cannot raise the demand of the amount exceeding the proportionate reversal pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of various decisions of the Tribunal in the impugned order. 6.2 In view of the above discussion we hold that the demand on this issue is not sustainable. 7. Regarding penalty imposed on the above said demands confirmed in the impugned order, the Appellant stated that the demand in the impugned order pertains to the period from April 2012 to June 2017. The Notice was issued on 13.11.2017, by invoking extended period. There is no fraud or collusion or suppression of fact involved in this case. Hence, the penalty is not imposable in this case. They place reliance on the decision of the Tribunal, New Delhi, in the case of Vandana Global Vs. Commissioner (Appeals), CGST, Raipur, in Final Order No 51135/2022. We observe that there is no suppression of fact findings by the adjudicating authority in the impugned order. In view of the above decisions cited, we hold that the penalties imposed in the impugned orders are not sustainable. 8. In view of the above discussion, we hold that the impugned order is not sustainable on the demands made in (i), (iii) and (iv) in para 1above. In respect of the demand made at (ii) in Para 1, where duty and interest has been already paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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