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2018 (1) TMI 37 - Commission - Central ExciseGTA services - Section 32E of Central Excise Act, 1944 - power to approach Settlement Commission - Held that - Once it is established that applicant is not eligible to approach Settlement Commission, granting another opportunity to be heard on merits is meaningless - There may be cases where it is possible for the Commission to record a finding that the disclosure made in the application is full and true . There may, however, be situations in which the Commission may not be able to, at the stage of admission of the application, record a finding with any amount of certainty. In any such situation, it will not be legally impermissible for the Commission to keep the question open as it has done in the instant case to be examined at a later stage or at the stage of final disposal of the application. Settlement application rejected.
Issues Involved:
1. Classification of services provided by the applicant. 2. Eligibility of the applicant to approach the Settlement Commission. 3. Full and true disclosure of Service Tax liability by the applicant. 4. Admissibility of Settlement applications based on the conditions of Section 32E of the Central Excise Act, 1944. Issue-wise Detailed Analysis: 1. Classification of Services Provided by the Applicant: The primary issue revolves around whether the services provided by the applicant fall under the category of 'Goods Transport Agency (GTA)' or 'Supply of Tangible Goods (SOTG)'. The applicant contends that the services fall under GTA, where the Service Tax liability has already been discharged by the service recipient, M/s. Shree Cement Ltd., under the reverse charge mechanism. However, the Department alleges that the services should be classified under SOTG, leading to an evasion of Service Tax amounting to ?55.604 crores for the period from 1-4-2009 to 31-1-2014 and ?29.95 crores for the period from February 2014 to March 2015. 2. Eligibility of the Applicant to Approach the Settlement Commission: The applicant filed Settlement applications under Section 32E of the Central Excise Act, 1944, which mandates that the additional amount of duty accepted by the applicant should exceed ?3 lakhs. The applicant admitted a Service Tax liability of ?3 lakhs each for the two show cause notices (SCNs). However, the Settlement Commission found that the admitted liability was not related to the services mentioned in the SCNs but was extraneous to the cases at hand. Therefore, the applicant did not meet the eligibility criteria to approach the Settlement Commission. 3. Full and True Disclosure of Service Tax Liability by the Applicant: The Settlement Commission determined that the applicant did not make a full and true disclosure of their Service Tax liability. The applicant's admitted liability of ?3 lakhs each was not connected to the disputed services in the SCNs. The Commission concluded that the disclosure was not genuine and was an attempt to circumvent the provisions of Section 32E(1) to get the application admitted. 4. Admissibility of Settlement Applications Based on the Conditions of Section 32E: The Settlement Commission noted that the fourth proviso to sub-section (1) of Section 32E prohibits applications for the interpretation of the classification of services. Since the core issue in the SCNs was the classification of services (GTA vs. SOTG), the applications were inadmissible. Additionally, the Commission highlighted that no additional duty liability was accepted by the applicant concerning the cases for which the Settlement applications were filed. The Commission referred to the Delhi High Court's decision in the case of Commissioner of Central Excise, Visakhapatnam v. True Woods Pvt Ltd, which supports the view that full and true disclosure must be examined throughout the proceedings. Conclusion: The Settlement Commission rejected the Settlement Application Nos. 5323/2016, 5325/2016, and 5327/2017, and remanded the matter to the Adjudicating Authority for disposal in accordance with the provisions of the Central Excise Act, 1944, as if no application under Section 32E had been made. The Commission emphasized the importance of genuine disclosure and adherence to statutory conditions for eligibility to approach the Settlement Commission.
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