Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2024 (8) TMI AT This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2024 (8) TMI 1149 - AT - Service Tax


Issues Involved:
1. Confirmation of demand of Rs.4,97,545/- for service tax short/not-paid.
2. Non-payment of service tax of Rs.98,33,759/- on Finance Leasing/Hire Purchase income.
3. Irregular availment of CENVAT Credit of Rs.48,18,851/-.
4. Imposition of penalty of Rs.1,51,50,155/-.
5. Invocation of extended period of limitation.

Issue-wise Detailed Analysis:

1. Confirmation of demand of Rs.4,97,545/- for service tax short/not-paid:
The appellant contended that there was no short payment of service tax, claiming that the adjudicating authority's findings were based on incorrect calculations by auditing officials. They provided a comparative chart showing the figures from the auditing officials and their audited statement of accounts, indicating an excess payment of service tax. The Tribunal observed that the adjudicating authority did not address the appellant's submissions and remanded the issue back to the adjudicating authority to examine the claim of excess payment made by the appellant.

2. Non-payment of service tax of Rs.98,33,759/- on Finance Leasing/Hire Purchase income:
The appellant argued that the income in question pertains to 'Interest on Loan', exempt from service tax, and not 'Finance Leasing/Hire Purchase'. The Tribunal noted that the contract was for lending money to acquire assets, not for leasing specific assets. The borrower becomes the owner of the asset immediately upon purchase with borrowed money. The Tribunal concluded that the transaction was for lending money, not leasing or hire purchase, and set aside the demand for service tax on this count.

3. Irregular availment of CENVAT Credit of Rs.48,18,851/-:
The appellant claimed they never availed or utilized the CENVAT Credit amounts alleged. The Tribunal observed that the adjudicating authority did not verify the appellant's submissions and remanded the issue back to the adjudicating authority to ascertain the factual position. Additionally, the Tribunal noted that the appellant utilized Rs.85,263/- from the CENVAT Credit of Rs.8,21,910/- for payment of service tax, which needs to be verified. The Tribunal held the appellant liable to pay back the credit of Rs.85,263/- along with interest.

4. Imposition of penalty of Rs.1,51,50,155/-:
The appellant argued that they regularly paid their service tax liability as per the books of accounts and the provisions of the Finance Act, 1994. The Tribunal observed that none of the conditions for imposing a penalty under section 78 of the Finance Act, 1994 read with Rule 15 of CENVAT Credit Rules, 2004 were applicable. Accordingly, the Tribunal set aside the penalty imposed on the appellant.

5. Invocation of extended period of limitation:
The appellant contended that the demand was barred by limitation, as they had not suppressed any material fact or willfully defaulted on paying service tax. The Tribunal did not specifically address this issue in the detailed analysis but focused on the substantive issues and remanded certain matters back to the adjudicating authority for further examination.

Conclusion:
(i) The issue of the demand of Rs.4,97,545/- is remanded back to the adjudicating authority for a clear finding on the appellant's claim of excess payment.
(ii) The demand of service tax of Rs.98,33,759/- on Finance Leasing/Hire Purchase income is set aside.
(iii) The issue of disallowance of CENVAT Credit of Rs.48,18,851/- is remanded back to the adjudicating authority for verification, with the appellant liable to pay Rs.85,263/- along with interest.
(iv) All penalties imposed on the appellant are set aside.
(v) The appeal is disposed of on these terms.

 

 

 

 

Quick Updates:Latest Updates