TMI Blog2024 (4) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... s wrongly calculated - HELD THAT:- The Commissioner committed an illegality in denying the benefit merely because this position had not been pointed out during audit. His second reasoning cannot also be accepted. If the appellant had not fulfilled the conditions of the exemptions and was not entitled to the exemption from service tax for the services which it had rendered to the SEZ units and for that reason they were not exempted, the question of any reversal under Rule 6(3) does not arise. The very basis for the SCN and the Commissioner to say that reversal has to be done as per Rule 6(3) was that the output services were exempted. When the audit was conducted and all the records were available with the department and the invoices of the recipient of the exempted services and the amounts received from them were examined, if the Commissioner doubts that the receivers of service were SEZs, he must have some basis to say so. Nothing to the effect is coming out of the order - it is found proper to remand this part of the demand to the Commissioner with a direction to examine the invoices and record if the exempted services in question were rendered to units in SEZ or not and accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmerce under section 65(104c). Service tax on legal service was introduced only from 1.9.2009. It had paid the amounts for the period August 2008 to September 2008 when it was not taxable. The department has incorrectly considered it as a service rendered during 2009-2010 - Since this issue requires verification of facts, it is found that this also needs to be remanded to the Commissioner for verification of facts and determining the service tax payable, if any. Penalties - HELD THAT:- As it is already found in favour of the appellant with respect to most demands, all penalties under section 80 of the Finance Act set aside. Appeal allowed in part, partly rejected and partly remanded. - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Ms. Priyamvda Sinha Ms. Dristhty Sakhuja, Advocates for the appellant Shri S K Meena, Authorised Representative for the Revenue ORDER M/s. CB Richard Ellis South Asia Pvt. Ltd. [ the appellant ] filed this appeal assailing the order-in-original [ impugned orders ] dated 31.3.2017 passed by the Commissioner in which he decided the proposals made in the Show Cause Notice [SCN ] dated 1.2.2012 and confirmed demand of Rs.1,70,73,652/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Excise Appeal No. 477 of 2012 decided by CESTAT, Mumbai (Larger Bench)] c) PTC Software (India) Ltd. versus Commissioner [2014(35) STR 632 (Tri-Mumbai)] 7. The Commissioner had, in the impugned order, agreed with the submission of the appellant for the period upto 1 April 2011 but held that the appellant was not entitled to credit after this date because Rule 2(l) of the CCR underwent change from 1 April 2011 and certain services were specifically excluded. Of the excluded services were those: such as those provided in relation to outdoor catering, beauty treatment, ..life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee ; 8. The Commissioner, therefore, held that the appellant was entitled to Cenvat credit upto 1.4.2011 but not thereafter. He denied the Cenvat credit of Rs.1,56,33,704/- stating that the appellant was unable to provide the breakup. 9. We find that the proposed denial of Cenvat credit on this count in the SCN was only of Rs. 44,19,319/- as can be seen from paragraph 12(i) that too, for the period 2007-2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions for exemption of such services in the relevant notifications were fulfilled. 14. The Commissioner was bound to consider the submissions made in the reply to the SCN and any submission could not be rejected because it was not made before the audit team at the time of audit. If the demand has to be confirmed only what was discovered during audit leaving no scope to put up defence afterwards, the SCN itself will be irrelevant. The SCN had called upon the appellant to explain why certain actions should not be taken and when the appellant explained, the Commissioner was bound to consider the reply. He agrees that the legal position indicated in the reply was correct. The Commissioner committed an illegality in denying the benefit merely because this position had not been pointed out during audit. His second reasoning cannot also be accepted. If the appellant had not fulfilled the conditions of the exemptions and was not entitled to the exemption from service tax for the services which it had rendered to the SEZ units and for that reason they were not exempted, the question of any reversal under Rule 6(3) does not arise. The very basis for the SCN and the Commissioner to say t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 19. According to the Commissioner, the amendment dated 10.5.2008 was retrospective and would apply to any amounts which were recorded though not paid on 10.5.2008. Therefore, according to the Commissioner the appellant should have paid service tax on 10.5.2008 and since it had delayed and paid service tax only in July 2011, interest should have been paid from 10.5.2008. 20. According to the appellant, the amendment dated 10.5.2008 was only prospective and it was required to pay service tax only in August 2008 when it paid the Associated Enterprise. Since it paid service tax only in July 2011, it paid interest for the period August 2008 to July 2011. 21. The dispute, therefore, is confined to the question if the amendment dated 10.5.2008 was retrospective and consequently, if interest was payable for the period from 10.5.2008 to August 2008. Learned counsel relies on a decision of a bench of this tribunal in Sify Technologies Ltd. versus Commissioner of Central Excise, LTU Chennai [ 2011 (21) STR 252 (Tr-Chennai) ] 22. We find that in the absence of any stipulation to the contrary, all laws are presumed to be only prospective and not retrospective because men are expected to arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of obtaining the insurance directly, it obtained it collectively through its parent company abroad. 27. The view of the Revenue deserves to be accepted. The question is if there is a service provider and service recipient relationship and if there was a taxable service and consideration was paid for it. Indisputably, the appellant was enjoying the service of professional indemnity insurance and it was the service recipient. The insurance was not being provided by its parent company but by the insurance company abroad which is the service provider. For this service, the appellant paid an amount as consideration. However, since the insurance was taken by the parent company covering the appellant also, the premium was also paid by the parent company and the appellant reimbursed to its parent company its share of the premium. Therefore, looking at the total transaction, we find in favour of the Revenue and against the appellant on this count. The appellant is liable to pay service tax on this service. As far as the dispute regarding calculation is concerned, we find it proper to remand the matter to the Commissioner to consider the submissions made by the appellant and determine the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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