9911796707
TMI Blog2024 (11) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 75 of the Finance act, 1994 as amended from time to time. This amount is held to be recoverable from the party. 2. I impose penalty of Rs.5,000/- u/s 77 of the Act for violation of Section 70 read with Rule 7 of the Rules. 3. I impose penalty Rs. 4,80,077/- under Section 78 of the Finance Act, 1994. However, penalty imposed under this Section shall stand reduced to 25% of the Service Tax amount if the entire dues including Service Tax, Interest and penalties imposed as above are paid within 30 days from receipt of this order." 2.1 Appellant is registered as service provider mainly providing services to M/s Hindalco Industries Ltd., Renukoot, Sonbhadra. 2.2 On scrutiny of records of M/s Hindalco Industries Ltd. as service recipient, it was observed that appellant was providing taxable services under the category of Maintenance & Repair Service, Man Power Recruitment Agency Service & Construction (Commercial & Industrial) Services to the service recipient. However, they have not discharged the service tax due in respect of these services. 2.3 After completion of investigation and inquiry, a show cause notice dated 11.10.2010 was issued to the appellant asking them to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of M/s Anil Construction Co., Main Road, Murdhawa, Renukoot, Sonebhadra Details Amount Amount Gross Turnover as per SCN 1,12,18,319.00 Less PF included in gross turnover 3,47,481.00 Less service prior to 16.05.2008 77,33,457.11 Less Service upto 16.06.2005 0.00 Less service tax paid by M/s Hindalco 0.00 79,80,938.11 Net taxable turnover 32,37,380.89 Service Tax 4,11,026.90 Less service tax already paid as per SCN 0.00 Net tax payable 4,11,026.09 That the party submitted that he is a petty contractor who is not having enough knowledge about the complex provisions of service tax and at the same time there is no help available in the form of outside consultants/experts in the subject from whom proper guidelines could have been obtained. That the party has taken registration on its own and has been depositing tax and return thereafter on regular basis. That the party is ready to deposit the service tax, due as per the chart for calculation of tax submitted with the reply, along with interest. In view of the submissions party prays for waiver of penalty. At the time of personal hearing Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 On limitation and penalty, Original Authority has observed as follows:- "Now, I take the issue of invoking the proviso of Section 73 (1) for demand and recovery under the extended period. It is evident from the fact of the case and documents on record that during the relevant period party has not disclosed anything to the department inspite of the fact that they have rendered taxable services and received payment thereof and also the amount of Service Tax and later also obtained service tax registration and charged service tax from the clients. The gross amount received by the party against providing taxable services was not disclosed to the department with clear intent to evade the payment of service tax. If the department would not have initiated enquiry the party might have escaped from paying due tax to the government. I also take note of the charges of non-payment/short payment which have not been rebutted by the party. It is also a fact that the party failed to discharge the statutory burden of declaring the value of taxable service to the department which amounts to suppression of facts, and provision of extended period is invokable in this case. Accordingly, I hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case the proposal for imposition under Section 78 of the Finance Act, 1994 is justified and therefore, I hold the penalty. I also observe that the party has not deposited the total amount of service tax received from the service recipient which clearly shows the bad intention of the party." 4.7 In the impugned order, First Appellate Authority has observed as follows:- 5. I have gone through the case records. The department has alleged that the appellant suppressed the fact of receiving huge amount as gross value of taxable services provided to M/s Hindalco Ind. Ltd without payment of service tax amounting to Rs. 12,58,690/- The thrust of the appeal is that (i) While allowing deduction relating to value Rs.76,33,451/- of Supply of Tangible Goods- prior to 16.05.2003 the service tax had been calculated at flat rate of 10.2% whereas, the amounts were received in different years having different rates of service tax. (ii) entire exercise is revenue neutral as the said tax paid by the appellants, was admissible to Hindalco as credit of such tax and (iii) the demand for interest and imposition of penalty was not sustainable as the services were not taxable (iv) Extended per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to non-payment of taxes in such a manner as to reduce the entire Cenvat credit system to nullity. If the plea of revenue neutrality is taken tax liability on any input service or input, This plea is thus to its logical conclusion, there should be no devoid of substance as it is completely inconsistent with statutory provisions. 9. Another plea put forth by the appellants is that charging of interest as well as imposition of penalty was not sustainable. I find that for charging of interest, Section 75 of the Finance Act, provides as under "Every person, liable to pay the tax in accordance with the provisions of section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest [at such rate not below ten per cent. and not exceeding thirty-six per cent. per annum, as is for the time being fixed by the Central Government; by notification in the Official Gazette] for the period] by which o such crediting of the tax or any part thereof is delayed" On examining the facts of the instant case in terms of above provision, I find that where any amount is payable as tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxability on the services provided by them. But for the intervention of department, the evasion of service tax would have gone on undetected and unchecked. Contravention of statutory provisions of law as also wilful intent to evade payment of tax are too evident to allow any scope for acceding to the request of waiving penalty. In view of above, there is just no merit in the appellant's prayer for waving interest and penalty. 11. On the issue of show cause notice being time barred, I find that the issue of non-payment of service tax was detected by the officers of the department and was not declared by the appellants on their own. It is also admitted fact that in this regard, the department called information from the service recipient who provided the details of amounts paid for taxable services to the appellants. Therefore, the appellant's contention that the show cause notice dated 22.10.2010, was time barred as it was not issued within the normal period, is not based on correct understanding and appreciation of he concept of relevant date' forming part of statutory arrangement relating to enforcement of process of intervention by the department through Service T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non submission of ST-3 returns in respect of M/s Neelav jaiswal and Brothers, Transport nagar, Renukoot, Sonebhadra. Period of ST-3 Return Due date of submission of ST-3 return Actual date of submission of ST-3 return by the party 1.04.05 to 30.09.05 25.10.2005 Not submitted 1.10.05 to 31.03.06 25.04.2006 Not submitted 1.04.06 to 30.09.06 25.10.2006 Not submitted 1.10.06 to 31.03.07 25.04.2007 Not submitted 1.04.07 to 30.09.07 25.10.2007 Not submitted 1.10.07 to 31.03.08 25.04.2008 Not submitted 1.04.08 to 30.09.08 25.10.2008 Not submitted 1.10.08 to 31.03.09 25.04.2009 Not submitted 1.04.09 to 30.09.09 25.10.2009 Not submitted 1.10.09 to 31.03.2010 25.04.2010 Not submitted Thus it is evident that appellant has during the entire period not filed any ST-3 return. Appellant do not dispute the factum of not filing the ST-3 return during the entire period of dispute. 4.10 They have suppressed the information with intend to evade payment of taxes. Accordingly, the demand by invoking the extended period of limitation and penalty imposed cannot be disputed with. In case of Afsar Tour and Travels [2019 (28) G.S.T.L. 153 (Tri. - Hyd.)] Hyderabad bench h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lties imposed under Section 70 and 77 of the Act. In case of Air India Limited [2017 (3) G.S.T.L. 374 (Tri. - Del.)] Delhi bench observed: "12. Next, we consider the ground of limitation raised by AIL. The contention of AIL is that no allegation of suppression can be fastened against them since the activities of AIL were within the knowledge of the department during the relevant period. Specifically the appellant had cited a letter dated 7-3-2006 written to the Joint Director of Service Tax to inform the various heads under which it was raising bills on AASL. Further, it has been contended that AIL had not paid service tax under the bona fide belief that it is not payable since AIL had not received payment from AASL. In the annual report 2003-04, it is mentioned "Non-charging of service tax on certain services". This implies that even where service tax has been collected the same was not deposited pending registration. It has also been recorded by the statutory auditors that service tax was payable on the services rendered by AIL to AASL. However, on the pretext that consideration has not been received (despite realization of the same from sale of tickets conducted on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty liability exists at the time of issuing the SCN, we are of the view that a careful reading of Section 11A(1) does not allow such a construction to be put on the said provision. Inasmuch as Section 11A(1) gives power to the Central Excise Officer to serve a notice within a period of six months from the 'relevant date' from the date when non-levy/non-payment or short levy/short payment has occurred, we are of the view that so long as it is not in doubt that there has been an occurrance of non-levy/short levy/ or non-payment/short payment on the relevant date the pre-conditions for issuance of SCN under Section 11A(1) are fully met and notice validly issued. In the instant case there is no dispute that clearance of excisable goods on short payment of duty had taken place. The fact that the differential duty was subsequently debited (albeit voluntarily) by the assessee before the issue of SCN will not debar the issuance of SCN in relation to the short payment occurring on the relevant date. Further, to the extent the appellants had stated in their price list declaration that no extra consideration had been received from the suppliers of the components despite the known fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
