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TMI Blog2024 (4) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... is amount is held to be recoverable from the party. 2. I do not impose any penalty by invoking Section 80 of the Finance Act, 1994." 2.1 Appellant is registered with the department and is engaged in providing taxable services under the category of Manpower Recruitment Agency, Cargo Handling Services, Maintenance & Repair Service, Construction Services in respect of Commercial or Industrial Buildings and Civil structures, Site Preparation and Clearance, Cleaning Services. 2.2 It was gathered from M/s Hindalco Industries Ltd. Renukoot, Sonebhadra, that in respect of various services received by them from various service providers including appellant, they have made the payments to the service providers during the period 2005-06 to 2009-10. 2.3 On the basis of the information received revenue was of the view that appellant had not paid the service tax, amounting to Rs 7,87,427/- (including cess) during the said period, by suppressing the value of taxable service provided by them. 2.4 A Show Cause Notice dated 22.10.2010 was issued to the appellant asking them to show as to why:- 1. The service tax amounting to Rs. 7,87,427/- (Service Tax Rs. 7,68,543/- + Education Cess Rs. 15,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is that (i) PF amounts included in gross turnover to be excluded for the purpose of arriving at correct liability in view of fact that a separate SCN was issued by the department for the amounts received towards PF/Bonus and (ii) Service tax amount of Rs. 10,45,027/- paid by Hindalco to the appellants, was included in the gross turnover which was not includible. 7. I have gone through the case records and contents of the appeal. On the plea advanced by the appellants with reference to amounts of Provident Fund / Bonus, I find that the issue was taken up by the department in the impugned show cause notice itself. The Para 4 of the show cause notice contains as under - "A demand cum show cause notice for recovery of service tax involved on the amount of Provident Fund and Bonus received by them, if any which is included in above gross value, has been issued separately. Thus, service tax on the remaining amount suppressed gross value of Rs. 64,41,735/- remains recoverable from the party." The above observations manifest that the amount received on account of PF/Bonus was not taken up in the impugned show cause notice itself. This is also evident from the facts that as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He in this regard observed and held as under- "To enquire the correctness of the chart submitted by the party the matter was referred to the concerned Division. However, the concerned party has not provided the relevant record to the division or Range staff for verification. Since the supporting documents were neither submitted to the adjudicating authority nor provided to the division/Range staff, the chart submitted by the party can't be accepted. Further, the chart submitted by the party is also not proper as per valuation aspect" I find that the appellants have neither contested nor controverted the aforesaid findings. I also find that the appellants have not adduced any evidence documentary or otherwise in support of their contention. It is not denied by the appellants that Rs. 10,45,027/- claimed to have been paid by Hindalco towards service tax was not deposited by them with the Exchequer towards discharge of their tax liability. No document whatsoever has been furnished by them to indicate and prove that the gross amount charged by them, was inclusive of service tax payable. There is nothing on record to suggest if M/s Hindalco has ever confirmed the payment of above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, I am not inclined to impose any penalty as proposed in he Show Cause Notice by invoking Section 80 of the Finance Act, 1994. There is plethora of cases where the penalty has been waived on the basis of ignorance of the party. In case of Magnum International ys. Commissioner of Customs & Central Excise Bhopal (Final order No ST/57-58/2008-PB, dated 03-04-2008) on the one hand invocation of extended period was justified covering the extended period demand , and on the other hand penalty was waived on the basis of reasonable cause for failure to discharge the Tax liability. It has been observed by the Hon'ble CESTAT in the case of CCE vs. Busy Bee (2009) 18 STT 18 392 (CESTAT) that if nonpayment was due to ignorance of law, penalty is not imposable." 4.5 At the time of personal hearing before the original authority while admitting his liability to pay the service tax, appellant had submitted the calculation chart as follow, seeking re-quantification of demand. Appellant submitted that the they are ready to pay the service tax due on the basis of quantification given by them. Summary of calculation for tax liability of M/s Yamuna Prasad & Brothers, Shiva Park, Renukoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Education Cess Rs. 15,371/-+ Secondary & Higher Education Cess Rs. 3,513/-) for the period as detailed in Annexure A to this notice..." 4.8 We also find that the demand has been made in the present case, on a taxable value of Rs 64,41,735/- after allowing the deduction of the gross taxable value already declared by the appellant on the ST-3 returns for which the tax has already been paid. In the calculation chart prepared by the appellant value on which tax is being demanded, is computed by reducing the net taxable value shown by this amount then the value on which tax is to be demanded is will be Rs 58,98,143.77/- (Rs 1,47,33,668.77 - Rs 88,35,525/-). The difference in the taxable value determined by the revenue and the appellant which is Rs 5,43,591.23/- (Rs 64,41,735/-- Rs 58,98,143.77/-) cannot be on the account of deductions being claimed by the appellant on account of PF, Bonus and Tax paid by the Hindalco. The same is on account of addition of the clearance made by the appellant which they claim to be prior to 16.06.2005 i.e., Rs 4,92,411.00/-. Alongwith the appeal filed appellant have given a chart, giving the details of the details of invoices which have been raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,554.77/- (Rs 1,77,87,709.00 - Rs 15,16,602.00 - Rs 10,45,027.23 - Rs 88,35,525). The demand has been made by taking table value of Rs 64,41,735/-. We do not find much difference in the taxable value determined by the department for making the demand and the taxable value that can be determined on the basis of the chart submitted by the appellant. 4.11 Apart from raising the issue of determination of the taxable value for making the demand, appellant has before the adjudicating authority accepted his liability towards the payment of service tax. Appellant had pleaded ignorance of law, and had claimed waiver from party. Acting on the submissions made by the appellant, adjudicating authority has noting the fact that appellant is un-educated and out of ignorance failed to pay the service tax, extended the benefit of Section 80 of the Finance Act, 1994 and did not imposed any penalty on the appellant under Section 76, 77 & 78 as were proposed in the show cause notice. Even before the first Appellate Authority, appellant has stated in para 2.2 & 2.3 of the appeal as follows: "2.2 We filed defence reply dated 02.05.2011 duly acknowledged in Service Tax dept. on 02.05.2011, challenging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the contrary had been put forward by the respondent. We will not permit the plea to be raised now. ...." 4.14 The arguments being advanced by the appellant in the present appeal were foreclosed in terms of the submissions made by the appellant before the Adjudicating authority. Acting on the submissions made by the appellant adjudicating authority has not imposed any penalty. Raising these arguments for the first time in subsequent proceedings will be hit by the principles of Res-judicata. In case of M. Nagabhushana [2011 (271) E.L.T. 481 (S.C.)] Hon'ble Apex Court observed a s follows: "13. It is obvious that such a litigative adventure by the present appellant is clearly against the principles of Res Judicata as well as principles of Constructive Res Judicata and principles analogous thereto. 14. The principles of Res Judicata are of universal application as it is based on two age old principles, namely, „interest reipublicae ut sit finis litium' which means that it is in the interest of the State that there should be an end to litigation and the other principle is „nemo debet his ve ari, si constet curiae quod sit pro un aet eademn cause' meaning thereby tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "The plaintiff should be non-suited if the defendant avers : „in this very affair, there was litigation between him and myself previously,' and it is found that the plaintiff had lost his case". There are texts of Prasara (Bengal Asiatic Society Edition, page 56) and of the Mayukha (Kane's Edition, page 15) to the same effect. Among Muhammadan law-givers similar effect was given to the plea of "Niza-i-munfasla" or "Amar Mania taqrir mukhalif." Under Roman Law, as administered by the Proetors' Courts, a defendant could repel the plaintiff's claim by means of „exceptio rei judicatoe" or plea of former judgment. The subject received considerable attention at the hands of Roman jurists and as stated in Roby's Roman Private Law (Vol. II, page 338) the general principle recognised was that "one suit and one decision was enough for any single dispute" and that "a matter once brought to trial should not be tried except, of course, by way of appeal". (Page 391-392 of the report) 17. The learned Judge also noted that in British India the rule of Res Judicata was first introduced by Section 16 of the Bengal Regulation, III of 1973 which prohibited the Zilla and City Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, any proceeding which has been initiated in breach of the principle of Res Judicata is prima-facie a proceeding which has been initiated in abuse of the process of Court. 22. A Constitution Bench of this Court in Devilal Modi v. Sales Tax Officer, Ratlam & Ors. - AIR 1965 SC 1150, has explained this principle in very clear terms : "But the question as to whether a citizen should be allowed to challenge the validity of the same order by successive petitions under Art. 226 cannot be answered merely in the light of the significance and importance of the citizens' fundamental rights. The general principle underlying the doctrine of res judicata is ultimately based on considerations of public policy. One important consideration of public policy is that the decisions pronounced by courts of competent jurisdiction should be final, unless they are modified or reversed by appellate authorities; and the other principle is that no one should be made to face the same kind of litigation twice over, because such a process would be contrary to considerations of fair play and justice, vide : Daryao v. State of U.P., 1962-1 SCR 575; (AIR 1961 SC 1457)." 23. This Court in All India M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1278 of 2004. His submission was that in the earlier round of litigation before the High Court when the demand of interest was questioned, it was given up inasmuch as after arguments on this issue, the counsel for the appellant had withdrawn the writ petition. At that time, while allowing the appellant to withdraw the writ petition, the dispute was confined only to the calculation of interest as is clear form the order dated 2-8-2004 itself which specifically referred to the averments made in Paragraphs 6 and 7. These paragraphs have already been extracted above. In Paragraph 6 particularly, Respondent No. 1 made some remarks about the calculation of the interest and had stated that it needed re-calculation. Therefore, after the dismissal of the said writ petition as withdrawn, the only issue that remains for consideration was how much interest is payable and the correct calculations thereof. It is a matter of record which flows from the correspondence exchanged thereafter between the parties that insofar as Department is concerned, it only re-worked the amount of interest and demanded interest in the sum of Rs. 4,67,02,251/- after reducing the figure from 8,43,62,504/- because ..... X X X X Extracts X X X X X X X X Extracts X X X X
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