2023 (12) TMI 606 - AT - Service Tax

Irregular availment of CENVAT Credit - invoices were issued more than one year prior to the date of taking such credit - Short payment of service tax on OLIDAR service - suppression of facts - irregularly availing exemption in terms of Notification No.01/2006-ST - Demand towards security service and consultancy service under RCM - Extended period of limitation - Penalties. Irregular availment of CENVAT Credit - invoices were issued more than one year prior to the date of taking such credit - HELD THAT - It is found that the Appellants have regularly taken Cenvat credit and no case is made out of having taken credit after more than one year from the date of invoice. In this view of the matter, this ground is allowed in favour of the Appellant. Short payment of service tax on OLIDAR service - suppression of facts - HELD THAT - Evidently Appellants have not disputed the amount of turnover as calculated by the Revenue and the same is matching with their financial records for the period April 2011 to March 2016 - It is already held herein above that the Cenvat credit availed by the Appellant is legal and proper and the same is not irregular. Thus, Appellants have rightly discharged the service tax and there is no case of escaped service tax. Accordingly, this ground is allowed in favour of the Appellant and the demand is set aside. Short payment of service tax - suppression of facts - HELD THAT - It is found that the Appellants have got matching turnover for sales of goods, which is not exigible to service tax during the period of dispute. Accordingly, this ground is allowed in favour of the Appellant and set aside the demand. Irregularly availing exemption in terms of Notification No.01/2006-ST - HELD THAT - The Appellants have simply provided multimedia presentation, website hosting and domain registration services which are not taxable under the category of OLIDAR service. Accordingly, this ground is allowed in favour of the Appellant and set aside the demand. Demand towards security service and consultancy service under RCM - HELD THAT - The expenses in question, incurred by the Appellant, have not been received from Advocate or a firm of Advocates towards legal services. Accordingly, it is held that no service tax demand is attracted under RCM. Accordingly, this ground is allowed and the demand is set aside. Extended period of Limitation - HELD THAT - As the returns of the Appellant were in arrears almost for a period of two and half years, the returns were filed during the course of investigation. Accordingly, extended period of limitation is rightly invokable. It is the statutory duty of the Appellant to file their returns in time. Penalties - HELD THAT - It is found that no case of suppression of any facts is made out, save and except the delay in filing the returns. Further, all the grounds are allowed on merits and no demand survives. In this view of the matter, all penalties imposed on the Appellants also set aside. The impugned order set aside - appeal allowed.

Issues Involved:

1. Non-deposit of service tax on a portion of income.
2. Irregular availment of Cenvat credit.
3. Short payment of service tax.
4. Non-payment under Reverse Charge Mechanism (RCM).
5. Irregular availment of Cenvat credit for a specific period.
6. Incorrect exemption claim for hosting services.
7. Extended period of limitation.

Summary:

1. Non-deposit of Service Tax (Rs.58,02,022/-):
The Revenue alleged that the Appellant did not deposit service tax on a portion of income shown in the Profit & Loss account for the financial years 2011-12 and 2012-13. The Tribunal found that the Appellant had matching turnover for sales of goods, which was not subject to service tax during the disputed period. Hence, the demand was set aside.

2. Irregular Availment of Cenvat Credit (Rs.3,25,04,101/-):
Revenue claimed that the Appellant availed Cenvat credit after more than one year from the date of invoice, violating Rule 4(1) of CCR. The Tribunal found that the Appellant regularly took Cenvat credit within the prescribed time and maintained proper records. Thus, this ground was allowed in favor of the Appellant.

3. Short Payment of Service Tax (Rs.3,83,94,795/-):
The Revenue alleged suppression of taxable turnover due to late filing of returns. The Tribunal held that the Appellant had disclosed the turnover and paid the applicable tax, including interest. The Cenvat credit availed was found to be legal and proper. Therefore, the demand was set aside.

4. Non-payment under Reverse Charge Mechanism (RCM) (Rs.3,09,270/-):
The Revenue demanded service tax under RCM for security and consultancy services. The Tribunal found that the service provider had already discharged the full amount of service tax, and the consultancy services did not fall under RCM as per Notification No.30/2012-ST. Thus, the demand was set aside.

5. Irregular Availment of Cenvat Credit for April 2013 to September 2013 (Rs.17,67,729/-):
The Tribunal did not find specific details in the provided text regarding this issue. However, it can be inferred that similar reasoning as in other Cenvat credit issues might have been applied.

6. Incorrect Exemption Claim for Hosting Services (Rs.12,41,170/-):
The Revenue alleged that the Appellant irregularly availed exemption for services rendered under OLIDAR. The Tribunal found that the services provided (multimedia presentation, website hosting, and domain registration) did not fall under OLIDAR. Hence, the demand was set aside.

7. Extended Period of Limitation:
The Tribunal held that the extended period of limitation was rightly invoked due to the Appellant's delay in filing returns. However, no case of suppression of facts was made out, and all penalties were set aside as no demand survived on merits.

Conclusion:
The Tribunal set aside the Impugned Order and allowed the Appeal, except for the ground of limitation. The Appellants were entitled to consequential benefits in accordance with the law.

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