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2024 (3) TMI 1114
Bogus purchases - Burden of proof - purchase of pulses made by the assessee from one supplier as bogus on the basis of information received from the Income Tax Investigation Wing, New Delhi - CIT(A) deleted the additions - HELD THAT:- We find that the assessee in the instant case had duly discharged its burden by furnishing all the necessary documents to prove the veracity of the purchases from Supplier/Kamal Kishore Mukesh Kumar - goods purchased had been duly reflected in the stock registers maintained by the assessee and the same were sold by the assessee to two parties by making due reduction in the stock register to the extent of sales. Hence the purchases and corresponding sales were duly matched by the assessee in the instant case.
Sales made by the assessee is not doubted by the revenue and naturally the purchase made by the assessee cannot be doubted. The purchase made by the assessee from the said supplier had been duly reflected in the books of accounts and payments made for the same through account payee cheques out of disclosed sources of income.
Also ledger account of Supplier as appearing in the books of the assessee company for the period 1.4.2011 to 31.3.2012, wherein it could be seen that total purchases made during the year by the assessee from the said supplier was Rs 2,62,54,071.60 , out of this, the ld. AO is disputing the purchase made from this very same supplier only for the sum of Rs 2,16,83,820/-. How can the said supplier be genuine for the remaining supplies and be ingenuine only for the disputed supplies of Rs 2,16,83,820/-. Hence the entire case of the revenue falls flat - Decided in favour of assessee.
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2024 (3) TMI 1113
Adjustment of Penalties from Refund amount - Smuggling - foreign currencies - On appeal by the appellant, absolute confiscation was set aside by the Commissioner (Appeals) on payment of redemption fine and penalty and directed the respondents to release the confiscated foreign currency to the appellant on payment of the above dues. Accordingly, refund claim was filed by the appellant after payment of the redemption fine and the penalty as per the above order which was accepted by the Revenue.
HELD THAT:- Section 142 allows to recover the amounts that is due from the appellant from any money that is payable to him provided he is a defaulter but in the present case, the personal penalties of the co-noticees are being recovered as dues deeming the appellant as a defaulter which is beyond the scope of Section 142 of the customs Act 1962 - the penalties being penalty in personam against the individuals, same cannot be adjusted against the refund sanctioned to the appellant.
The Hon’ble High Court of Kerala in the case E. Abdul Rahiman Versus Union of India [2007 (12) TMI 232 - HIGH COURT OF KERALA AT ERNAKULAM] observed The penalty so levied being personal cannot be recovered from the importer or any other person. Therefore, the petitioner is not personally liable for the penalty levied on Shri Yahoo and the amount also cannot be recovered from the petitioner.
It is undoubtedly clear that personal penalty levied on the co-noticees cannot be recovered from the amount to be refunded to the appellant - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1112
Refund claim - Payment of duty in terms of Notification No. 84/2017-Cus instead of availing full exemption under Notification No. 93/2017-Cus. - order of assessment in appeal not challenged - HELD THAT:- We find that on identical facts, this Tribunal has taken a matter for consideration in the case of M/s. Uma Export Ltd.[2023 (10) TMI 1176 - CESTAT KOLKATA]. As the issue has already been dealt by the Tribunal, we hold that when two beneficial Notifications are applicable to an assessee, it is the choice of the assessee to take the benefit of the Notification which is more beneficial to the assessee.
Further, in this case, the respondent had initially filed an application u/s 149 of the Customs Act, 1962 for amendment in the Bill-of-Entry which was pending before the ld. adjudicating authority. Thereafter, the respondent filed their refund claim. In these circumstances, it cannot be said that the decision in the case of M/s. ITC Ltd.[2019 (9) TMI 802 - SUPREME COURT] is applicable to the facts of this case as before filing the refund claim, the respondent had sought amendment in the Bill-of-Entry.
Thus, we do not find any infirmity in the impugned order. Accordingly, the same is upheld - In the result, the appeal filed by the Revenue is dismissed.
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2024 (3) TMI 1111
Demand of duty - Classification of Goods - Imported one consignment of ‘Bed sheet’, declared as Polyester Bed sheet - willfully mis-declaration of the goods - classifiable under CTH 5407 Or under CTH 6304 - confiscation - penalty - HELD THAT:- We find that a similar issue has been examined by this Tribunal in the case Commissioner of Customs (Port) vs. M/s. Silpha Finvest P. Limited [2024 (3) TMI 246 - CESTAT KOLKATA] and it was held that merit classification of impugned goods is under CTH 6304 whereas the Revenue wants to classify the same under CTH 5407. As the classification adopted by the adjudicating authority is not sustainable, therefore, we do not find any merits in the impugned order. Consequently, no penalty u/s 114A of the Customs Act, 1962 is warranted against the respondent.
Therefore, we dismiss the appeal filed by the Revenue.
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2024 (3) TMI 1110
Seeking to recover the refund already sanctioned - imported timber log and paid SAD - Sold timber after cutting and sawing - non-endorsement of the declaration - violations of Notification 102/2007-Cus - non-mention of Bills of Entry number on the invoice and mismatch of description - HELD THAT:- We find that the primary objection raised in the instant case is that the appellant have sold timber after cutting and sawing. This issue is specifically covered by the decision of Hon’ble Apex Court in the case of Variety Lumbers[2018 (6) TMI 1499 - SUPREME COURT], it has been held that the refund cannot be denied even if the imported logs were cut and sawn before sale.
Non-endorsement of the declaration in terms of para 2(b) of Notification 102/2007-Cus. The said para 2(b) requires the importer to mention on the invoices that no credit of additional duty of customs levied under sub section (5) of Section 3 of the Customs Tariff Act 1975 shall be admissible. We find that since the appellant is not a registered dealer, therefore the question of taking credit on the invoices issued by them does not arise.
Non-mention of Bills of Entry number on the invoice and mismatch of description and number of pieces on the invoices and bills of entry. In grounds of appeal it has been clearly indicated that stock requests duty certified by Chartered Accountant was produced at the time of filing refund. Following the case Overseas Polymers [2021 (1) TMI 1212 - CESTAT CHENNAI]. It is clear that minor discrepancies cannot be the reason for recovery of refund when the appellant had submitted Chartered Accountant certified stock report.
Thus, we do not filed any merit in the order, the same is set aside and appeals are allowed. The appeal of the Naresh Aggarwal, Director is also consequently allowed.
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2024 (3) TMI 1109
CIRP - Seeking a direction to admit the claim of the Appellant as Financial Creditor - HELD THAT:- The Application filed by the Corporate Debtor to stay the proceedings of suit in view of the moratorium imposed with effect from 07.04.2021, was allowed and proceedings in suit was stayed. However, the Appellant’s suit against the Agent, through whom the Units were booked was allowed to proceed. The possession letter dated 24.09.2014, which has been extracted above, clearly indicate that possession letter was accepted by the Appellant, though under protest. The possession of Unit was thus, handed over to the Appellant on 24.09.2014, thus, the RP did not commit any error in not accepting the claim of the Appellant, for the possession of the Units, which have already been handed over - there are no error in the impugned order passed by the Adjudicating Authority in rejecting IA No.1531 of 2023 filed by the Appellant seeking direction to accept the claim. However, as undertaken by the SRA, the Resolution Plan having been approved on 20.11.2023, the SRA now has undertaken to execute of the Conveyance Deed for both the Units.
The order impugned dated 16.06.2023, rejecting IA No.1531 of 2023 is upheld - SRA namely Singla Builders and Promoters Limited shall execute the Conveyance Deed in favour of the Appellant for Units CB-5 and CB-6.
Appeal disposed off.
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2024 (3) TMI 1108
Recovery of CENVAT Credit erroneously refunded alongwith interest - penalty for ineligible availment of CENVAT Credit - HELD THAT:- It is not in dispute that petitioner has been refunded the said amount after the petitioner was found eligible by the Tribunal for refund and further by this Court towards interest for delayed refund of the CENVAT Credit. Accordingly, there is no ground to demand the same from the petitioner.
Since the Revenue is approaching the Supreme Court impugning the order of the Tribunal as well as the order in appeal passed by this Court holding petitioner entitled to refund of the CENVAT Credit, it would be open to the Revenue to seek interim orders of protection from the Supreme Court. The Revenue cannot after being unsuccessful before this Court, on its own, declare the refund of the CENVAT Credit as well as interest on delayed payment to be erroneous refund. Unless the Revenue is successful before the Supreme Court or the Supreme Court so warrants, there is no question of any refund of the CENVAT Credit or refund of the interest paid to the petitioner.
The impugned Show Cause Notice cannot be sustained. The same is accordingly quashed.
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2024 (3) TMI 1107
CENVAT Credit - input service - nexus with manufacturing of final product or not - Reverse Charge Mechanism (RCM) - Excess availed cenvat credit of service tax - contravention of Rule 7 of CCR. 2004 - Cenvat credit of Education Cess and Secondary & Higher Education Cess - violation of Notification No. 12/2015-CE (NT) dated 29.10.2015 - non-payment of service tax on Ocean Freight - non-payment of service tax on Government Fees under RCM.
Wrong availment of CENVAT Credit of Rs. 6,86,000/- on the services received from M/s Satnam Construction Co. Fabrication Unit, Delhi - HELD THAT:- The appellant has exported PET plant from Neemrana in India to Jamaica, a place outside India with the services to install the same in Jamaica as received from M/s. Satnam Construction Co. Ltd. The later company only has given services to appellant for dismantling the said PET plant clearing, painting and repacking it for being exported. Hence the services received from M/s. Satnam were services exported. The activity done in India by said M/s. Satnam is definitely a service used by the provider of output service for providing output service. Hence, it is well covered in the definition of input services - Cenvat Credit on services received from M/s. Satnam Construction Co. for Rs.6,86,000/- is held admissible to the appellant. Hence the order of the Commissioner (Appeals) is not sustainable qua this issue.
Wrong availment of CENVAT Credit of Rs. 5,15,579/- on 30.06.2017 on challan in respect of RCM liability for the month of June-17 paid in July-2017 in contravention of Rule 4(7) of CCR, 2004 - HELD THAT:- Section 140(5) of the CGST Act, 2017 provides for entitlement to registered person for taking credit of eligible duties and taxes in respect of inputs and input services received on after the appointed date i.e. 30.06.2017 subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day then denying the credit to the appellant when the input services were received prior to 30.06.2017 and tax was paid under RCM before the due date prescribed under the Finance Act, 1994 would be unjustified and cause undue hardship to the appellant when there is no legislative intent to do so - appellant is held entitled for cenvat credit of Rs. 5, 15,579/-.
Excess availment of CENVAT Credit of service tax amounting to Rs. 2,41,451/- in excess on the services which were attributable to appellant as well as other manufacturing unit i.e. Gandhidham, Gujarat in contravention of Rule 7 of Cenvat Credit Rules, 2004 - HELD THAT:- It was mandatory for the appellant to distribute credit as per the directions of said Rule 7. Apparently and admittedly Rule 7 has not been followed while distributing credit. Hence it is held that the phagi unit is rightly held to have been allocated with excess credit.
Wrong availment of CENVAT Credit total amounting to Rs.1,31,219/- of Education Cess & SHE Cess in violation of Notification No. 12/2015-CE(NT) dated 30.04.2015 and 22/2015-CE (NT) dated 29.10.2015 - HELD THAT:- Hon'ble Madras High Court in SUTHERLAND GLOBAL SERVICES PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER CGST AND CENTRAL EXCISE, COMMISSIONER OF CGST AND CENTRAL EXCISE, GOVERNMENT OF TAMIL NADU, UNION OF INDIA, CENTRAL BOARD OF EXCISE AND CUSTOMS, THE CHAIRMAN, GSTN [2019 (11) TMI 278 - MADRAS HIGH COURT] has clearly held that accumulated credit of Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess - Credit continues to be available till such time it is expressly stated to have lapsed No notification/circular/instruction expressly provided that credit accumulated would lapse Authorities cannot now take stand that such credit unavailable for use. It is held that available credit as on date of transition was available to an assessee for set off - Availment of credit on this account is therefore held to be wrongly denied.
Wrong availment of CENVAT Credit of Rs. 82,720/- on M.S. Bar, Channel, H.R. Coil etc. in violation of Rule 2(a) & 2(k) of Cenvat Credit Rules, 2004 used for support of capital goods - HELD THAT:- The items on which cenvat credit had been taken were used in the manufacture of capital goods or repair and maintenance of capital goods. The basic idea is that cenvat credit is admissible so long as the inputs are used in or in relation to the manufacture of final product and whether directly or indirectly. The allegation of the department that the goods on which cenvat credit was availed did not satisfy the definition of the capital goods was considered by the larger bench of the Tribunal in the case of BALLARPUR INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BELGAUM [1999 (12) TMI 88 - CEGAT, NEW DELHI] wherein the theory of "direct participation" of the goods eligible for modvat credit had been specifically rejected in the light of its earlier larger bench decision rendered in the case of JAWAHAR MILLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [1999 (4) TMI 153 - CEGAT, NEW DELHI] - the findings in Order-in-Appeal on this issue are not sustainable.
Non-payment of Service Tax amounting to Rs. 6,64,172/- on Ocean Freight in accordance with the Notification 16/2017- ST dated 13.04.17 - HELD THAT:- Hon'ble Supreme Court has held that the levy of IGST on the amount of Ocean Freight as unconstitutional in the case of UNION OF INDIA & ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR [2022 (5) TMI 968 - SUPREME COURT]. The adjudicating authority had not considered said judgement on the ground that the same has been passed in GST regime. These findings are therefore liable to be set aside
Non-payment of Service Tax of Rs. 1,07,393/- on the Government Fees under RCM in accordance with provisions of Notification No. 22/2016-ST - HELD THAT:- Tax liability on the amount in question under this issue arises only when any service is provided or agreed to be provided by the government or local authority. In the case of appellant no service has been provided by the DGFT and Transport department. The payment of fees to these departments is for the purpose of procuring Advance License from DGFT for duty free import of raw material for manufacture of final product which is then exported and for obtaining permit respectively. Demand on this issue is also held to be wrongly confirmed.
Appeal allowed in part.
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2024 (3) TMI 1106
Levy of service tax - Mining Services - execution of contracts for transportation of Coal/Over Burden within the mines and also outside the mines - demand under Business Auxiliary Service reported as Handling Charges - CENVAT Credit disallowed on Tippers (CH.87) used for providing Cargo Handling Service - denial of credit on M.S. Channel and M.S. Angle used for repairing Body/Dallas of the Tippers/Dumper has been disallowed on the ground that the same was not input for the repair of the Tippers/Dumpers - denial of credit availed on the strength of invoices which are in the names of third parties (contractors) - demand of CENVAT Credit against availment of CENVAT Credit prior to payment.
Mining services - HELD THAT:- The activity of transportation is most appropriately classifiable under “Goods Transport Agency Services” and the liability to pay Service Tax on the transportation service lies on the service receiver under the reverse charge mechanism. Accordingly, the transport services provided by the Appellant cannot be classified under the category of “Mining Services”. It is observed that this view has been taken by the Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS [2017 (7) TMI 494 - SUPREME COURT]. Relying on the said decision, this tribunal has taken the same view in the case of M/S MAA KALIKA TRANSPORT PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, ROURKELA, ROURKELA [2023 (7) TMI 435 - CESTAT KOLKATA] wherein it has been held that transportation of coal within the mines is liable for service tax under the category of “Goods Transport Agency Services” and therefore the liability to pay service tax under the reverse charge mechanism lies on the service receivers - the transportation service rendered by the Appellant within the mines and outside the mines are not chargeable to service tax under the category of 'Mining Services'. Similarly, the activities of Shifting and Feeding of Coal into the Hoppers” has been carried out in the Power Plants and hence the same cannot be categorized as 'Mining Service'. Accordingly, the demand of service tax confirmed in the impugned order on this count is set aside.
Demand of service tax on diesel supplied free of cost by the client under the category of Mining Service - HELD THAT:- Under the composite contract dated 27/08/2010 awarded by Calcutta Industrial Supply Corporation (CISC) for mining, it was agreed upon that the said client would supply the Diesel (HSD) free of cost for running of Tippers, Excavators, HEMM etc. for providing the “Mining Services”. It is observed that during the relevant period, there is no provision in the valuation rules to include the value of free supply material in the assessable value for the purpose of levy of service tax. Accordingly, we hold that the cost of HSD valued Rs.3,97,69,281/- supplied free of cost by the client cannot be included in the assessable value during 2011-12 for the purpose of demanding service tax under the category of “Mining Services”. Accordingly, the demand of service tax in the impugned order on this count is not sustainable - the demand of service tax of Rs.18,76,33,250/- confirmed in the impugned order along with interest and penalty, under the category of 'Mining Services' is not sustainable and accordingly the same is set aside.
Handling charges - HELD THAT:- The discount amount received has been credited in the books of accounts under the head of “Handling Charges. It is observed that the Department has considered these receipts as taxable value received and demanded service tax under the category of "Business Auxiliary Service". A perusal of the journals, invoices and CA Certificates submitted by the Appellant reveals that the Handling Charges of Rs.75,60,332/- received them was towards 'Discounts' only and not for providing any taxable services. Merely because the amount is accounted for under the Account Head "Handling Charges", it would not make it taxable under category of “Business Auxiliary Services”. Accordingly, the service tax confirmed in the impugned order on this count is not sustainable.
CENVAT Credit of Rs.37,13,615/- disallowed on Tippers (CH.87) used for providing Cargo Handling Service - HELD THAT:- The CENVAT Credit in the instant case was claimed in the year 2008, when the Appellant was not rendering 'Cargo handling service'. The Appellant took registration of the vehicle under the Motor Vehicles Act on 12-10-2010. This date has no relevance for availing the credit on the Tippers as 'Capital goods'. As the Tippers were not used for providing Cargo Handling Service for which they are eligible as 'Capital Goods', at the time of receipt of the goods in the year 2008, we hold that the credit availed by the Appellant on this count has been rightly denied in the impugned order. The Appellant has not intimated the availment of capital goods credit on the Tippers. Hence, extended period has been rightly invoked to disallow the credit. For the same reason, the appellant is also liable for penalty. Accordingly, the demand of service tax along with interest upheld. As the irregular credit availed by the Appellant has been established, the Appellant is liable for interest and penalty under Rule 15(2) of the CENVAT Credit Rules 2004.
Denial of CENVAT Credit of Rs.8,64,278/- on the 217 MT of M.S.Channel and M.S.Angle used for repairing Body/Dallas of the Tippers/Dumper - HELD THAT:- During the period from April 2012 to November, 2012, the Appellant purchased 217 MT of M.S. Channel and M.S.Angle and claimed that they have used the same for repairing Body/Dallas of the Tippers/Dumper which were in turn used for providing taxable services under the category of “Cargo Handling Services”. This fact needs to be verified. In the impugned order, the adjudicating authority observed that a 'Dumping Truck' normally weighs 4-6 MT. The claim of consuming 217 MT angle/Channel for repairing work in one year for making 'Body/Dallas' appears nothing but a sham - the adjudicating authority has not given any finding as to whether the Tippers/Dumpers for which the 217 MT of MS Angle and MS Channel were said to have been used qualify as capital goods first. The Appellant has also not submitted any evidence to support their claim that the 217 MT of MS angle and MS Channel has been used in repairing the Tippers. Accordingly, this matter needs to be remanded back to the adjudicating authority to examine the eligibility of this credit, on the basis of the above observations.
Denial of CENVAT Credit of Rs.6,14,095/- availed on the strength of invoices which are in the names of third parties (contractors) - HELD THAT:- The Appellant had already reversed the CENVAT Credit of Rs.4,81,313/- and Rs.1,32,782/- vide Challan dated 27-04-2013 and Challan dated 29-07-2013 aggregating to Rs.6,14,095/- along with interest of Rs.1,36,728/-. However, it is found that the Impugned Order has only considered the payment of Rs.4,81,313/- and appropriated the same. Since the Appellant has already reversed the entire credit of Rs.6,14,095/- the same is appropriated.
Appeal disposed off.
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2024 (3) TMI 1105
Non-payment of service tax - Business Support Service - Renting of Immovable Property Service - Sale of space and Time for Advertisement Service - invocation of Extended period of Limitation - penalty - HELD THAT:- SCN has already been issued to the appellant on the same issue of implementation of Private Owned Buss Scheme, 2001 and a demand has already been raised under the category of 'Business Auxiliary Service' . Thus, the department is well aware of the activities of acquiring buses by the appellant from private operators for carrying passengers. Now, Notice has been again issued for the same activity under various categories of taxable service such as "Business Support Service, Renting on immovable properties and providing time & space for Advertisement service, by invoking the extended period. It is observed that the appellant has been filing returns regularly and the activities of appellant is well within the knowledge of the department. Accordingly, the department at this stage cannot claim wilful suppression of fact intending evade payment of service tax on the part of the appellant and raise the demand again by invoking extended period, as held by the Hon'ble Apex Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT]. Accordingly, the impugned Order is not sustainable on the grounds of limitation.
Business Support Service - HELD THAT:- The appellant corporation has acquired the passenger vehicles having road worthiness to meet their requirement for the efficient, adequate and economic passenger transport services, in public interest, The appellant, being a statutory Corporation, has no authority to permit other persons to run their vehicles on their own, on payment of some amount to the Corporation. From the plain reading of the definition of Sec.65(104c) of the Finance Act, 1994, it is observed that the activity of providing parking and receipt of entry fee is not covered under the clauses mentioned under the definition of Business Support Service. Accordingly, the activity undertaken by the appellant cannot be considered as 'Business Support Services' promoting the business of the private transport operators. Hence, the demand confirmed in the impugned order under the category of 'Business Support Services' is not sustainable.
Renting of Immovable Property service - HELD THAT:- The appellant has rented out immovable property for a consideration. In their submissions, the appellant contended that they are not a commercial concern. They are a non-profit making statutory body. They have provided the spaces to stall owners at various places for the benefit of the passengers to arrange their necessity during the journey. Whatever, amount collected by them cannot be considered as 'rent' and used the same has been used towards providing amenities for the passengers in the public interest. Hence, the amount received towards rentals or lease/license fees cannot be considered as 'consideration' received for taxable services - the appellant is liable to pay service tax under the category of 'Renting of Immovable property service' - there is no suppression of fact involved in this case. Accordingly, the demand, if any, under this category of service is restricted to normal period of limitation only.
Time & Space for Advertisement Services - HELD THAT:- The appellant is not an advertisement agency. Further, we observe that 'Sale of Space and time for advertisement' has been brought under the ambit of service tax net only w.e.f. 01.05.2006. In the present case, the demand under this category has been raised for the period 2007-08 to 2011-12. As per the table mentioned in para 16.8 of the Show Cause Notice, we observe that the entire demand is confined to the period 2007-08 to 2009-10. There was no receipt under this category during the financial years 2010-11 and 2011-12. Accordingly, the entire demand under this category is barred by limitation. Hence, no demand confirmed in the impugned order survives under this category.
Penalty - HELD THAT:- There is no evidence of wilful suppression of fact intending evasion of payment of service tax in this case. Accordingly, the penalty imposed on the appellant is not sustainable and hence the same is set aside.
Appeal disposed off.
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2024 (3) TMI 1104
Non-payment of service tax - commercial training and coaching center providing vocational training to the students - Department considered the services rendered by the appellant are taxable services and the exemption provided under N/N. 24/2004-ST dated 10.09.2004 is not applicable to them - HELD THAT:- N/N. 24/2004-ST 10.09.2004, exempts vocational training provided by a Coaching Centre. The appellant considered the services rendered by them are exempted from payment of service tax as per this Notification. It is observed that there is no specific finding in the impugned order to the effect that the coaching offered by the appellant are not vocational training. A perusal of the Brochures submitted by the appellant clearly reveal that most of the courses offered by the appellant are vocational training. Accordingly, the appellant are eligible for the benefit of Notification No. 24/2004-ST 10.09.2004.
The legal status of respective universities is not in dispute. The syllabus for these courses are prescribed by the universities in consultation with the appellant institute and examinations are also conducted by the universities which thereafter issues certificate/degree/diploma to successful candidates. Therefore, the appellant institute provided educational qualification recognized by the law and are accordingly outside the ambit of 'commercial training or coaching services. Hence, there is no service tax liability on these services.
The demand of service tax confirmed in the impugned order is not sustainable. Since, the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1103
Recovery of service tax alongwith interest and penalties - Sundry Debtors/ amounts realizable appearing in Balance Sheet - reverse charge mechanism - extended period of limitation - HELD THAT:- The proposed demand of Service Tax of Rs. 1,64,78,600/- has been reduced by Commissioner (Appeals) to an amount of Rs. 1,37,96,613/-, which has been confirmed alleging it to be the non-released receivables (sundry) from various Government debtors and private debtors (sundry debtors). Sundry debtors has been defined under Finance Act, 1994. As per normal terms sundry debtors refer to businesses, individuals or companies receiving services or products from another company or business without making the payment immediately. The payment occurs on a credit basis, where the debtors are liable to pay the money in future, i.e. the money lent to the sundry debtors is expected to return in the business financials within a short period of time. Payments on some future date to the sundry accounts are considered as fixed assets in the business.
The show cause notice is based upon the scrutiny of profit and loss account for the financial year 2014-15, wherein the amounts were found recorded to be recoverable from the Government as well as from the private debtors - the amounts mentioned in the balance sheet as profit and loss amounts as unrealized receivable from the sundry debtors cannot be considered as value of service. Apparently, there is no provision in the Act or the Rules to be disclosed as sundry debtors in the ST 3 Returns. Hence, demand cannot be confirmed by merely appreciating the difference between the profit and loss account / balance sheet and ST 3 returns.
The other ground for confirming demands is that the appellants had shown certain amounts du from the parties in their Income Tax returns and Revenue has proceeded to demand Service Tax on this amount shown in the Balance Sheet - HELD THAT:- In the present case, it is observed that the Show Cause Notice as well as orders of the adjudicating authority have just appreciated the difference noticed between the amount mentioned in the profit and loss account and are mentioned in ST 3 returns of the appellant. Without appreciating the amount out of the impugned invoices to have been actually received by the appellant and without verifying as to whether the requisite services were finally being provided. Resultantly, order confirming such a demand is not sustainable.
Invocation of the extended period - HELD THAT:- It is already observed that the matter has originated based upon the latest audit of the appellants own record. The order merely state that had audit not been conducted the liability as confirmed qua the appellant could not have been ascertained, cannot be the ground for invoking the extended period of limitation. The primary responsibility for ensuring that the credit amount of service tax is paid, rests on the officers even in the regime of self-assessment as clarified by the CBEC in its manual for scrutiny of ST return - There is no evidence found on record proving such intent / mens rea with the appellant to evade payment of service tax. The appellant have already been held not liable to pay the amount confirmed. Resultantly the department has wrongly invoked the extended period of limitation while issuing Show Cause Notice.
The impugned order is set aside - appeal allowed.
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2024 (3) TMI 1102
CENVAT Credit - activity of trading as well as erection, commissioning and installation services - non-maintenance of separate account for their input/input services used for providing taxable services as well as exempted services - violation of the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 - HELD THAT:- As held by the Hon’ble Telengana High Court in M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] that if the appellant has taken Cenvat Credit wrongly, Rule 14 of the Cenvat Credit Rules, 2004 empowers the authorities to recover such credit availed by the assessee wrongly. Admittedly in this case, no demand has been raised against the appellant under Rule 14 of the Cenvat Credit Rules, 2004.
Therefore, relying on the decision of the Hon’ble Telengana High Court in the case of Tiara Advertising vs. UOI, it s held that the demands are not sustainable against the appellant, therefore, the impugned order is set aside - appeal allowed.
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2024 (3) TMI 1101
Levy of service tax - Business Support Service - service of providing up-linking facility - classification of service - services of supply of DSNG Van to its clients can be classified and subjected to service tax under the category of Supply of Tangible Goods Service or not - time limitation - demand of interest - levy of penalties u/s 77 & 78 of FA.
Whether the service of providing up-linking facility will be taxable under the category of Business Support Service? - HELD THAT:- On examination of the terms of the contract between the appellant and their client it is clearly evident that appellant have provided the services which support the business activities of their client, by providing the uplinking facility from their teleport. Thus on merits these service would be classifiable under the category of business support services.
Whether the services of supply of DSNG Van to its clients can be classified and subjected to service tax under the category of Supply of Tangible Goods Service? - HELD THAT:- The agreement between the appellant and their customer is from the day one i.e. the day when it was entered into, was an agreement to provide these vehicles on rent to the appellant without transferring the effective control and possession of the vehicle to the customers - Hon’ble Supreme Court has in case of Adani Gases Ltd. [2020 (8) TMI 789 - SUPREME COURT] held that the supply of the pipelines and the measurement equipment (SKID equipment) by the respondent, was of use to the customers and is taxable under Section 65 (105) (zzzzj) of the Finance Act 1994 - there are no merits in the submissions made by the appellant in this respect and hold that the appellant has in fact provided the service under the taxable category of the Supply of Tangible Goods Services.
Whether the demand is barred by limitation? - HELD THAT:- The issue involved is purely of interpretation of the terms of agreement vis a vis the provisions of the Act. On going through the terms of agreement, the appellant were entertaining a bona fide belief that these service would not be classifiable under any of the taxable categories. There is nothing in the agreement to show that appellant could not have entertained such a belief. Also it is found that there has been dispute in respect of interpretation of the term “infrastructural support facility” used in the definition of Business Support Services. There are decisions which have held that the this term was restricted only to infrastructural support facilities, vis a vis the office maintenance facilities which have been out sourced. Thus it cannot be said that appellants could not have entertained such a belief - thus, extended period of limitation could not have been invoked for making this demand.
As the service tax is payable is under this category thus the demand will be restricted only to the extent it has been made within the normal period of limitation. To re-determine the same the matter needs to remanded back to the original authority.
Whether the penalties imposed under Section 77 & 78 can be justified? - HELD THAT:- As it is held invocation of extended period of limitation in respect of the demand made under the category of Business Support Services, the penalty imposed under Section in respect of this demand cannot be sustained. However in respect of the demand under category of Supply of Tangible Goods Services by invoking extended period of limitation as per proviso to Section 73 (1), which is upheld the penalty under Section 78 to that extent is upheld.
Interest - HELD THAT:- The demand for interest also upheld in respect of demands upheld.
Appeal allowed in part.
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2024 (3) TMI 1100
Valuation - computation done at 110% of the cost of production of goods at the second unit received through inter-plant transfer - Rule 8 of the Central Excise Valuation Rules, 2000 - Revenue Neutrality - HELD THAT:- In UNION CARBIDE INDIA LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, CALCUTTA [2003 (9) TMI 89 - SUPREME COURT], Hon'ble Supreme Court had laid down ratio that for the purpose of computing the cost of production, Rule 6 of the Valuation Rules is squarely applicable to the cases of inter-plant transfer for determination of cost of production under Rule 8, where goods are not sold but are captively consumed by the Appellant and the interpretation made to distinguish cost and price in the case of CHALLAPALLI SUGARS LIMITED & HINDUSTAN PETROLEUM CORPORATION LTD. VERSUS COMMISSIONER OF INCOME-TAX, AP & COMMISSIONER OF INCOME-TAX (CENTRAL) , CALCUTTA [1974 (10) TMI 3 - SUPREME COURT] by the Hon'ble Supreme Court was also considered to arrive at the conclusion that cost of raw material at Jamshedpur would also remain as cost of material consumed at Tarapur, by removing the notional profit. It is however worth mentioning, here that no finding is available in those two judgments that Rule 6 of Valuation Rules, as existing then was similar to Rule 8 of the Valuation Rules, 2000.
It would not be a breach of judicial propriety to give a finding that Appellant is liable to pay the duty, interest and penalty as demanded in the Show-cause notice that was also confirmed by this Tribunal - Appeal dismissed.
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2024 (3) TMI 1099
Levy of penalty u/r 25 of CER - Availment of fraudulent credit - issuance of Cenvatable invoices without actual dispatch of goods - Penalty on Registered Dealers - Penalty on Unregistered Dealers and Transporters - HELD THAT:- The adjudicating authority finds that the charge levelled against the respondents was that they have facilitated and abetted M/s AIPL in availing fraudulent credit; a careful consideration of type of offences indicates that that the circumstances covered fall under Rule 26(2) of Central Excise Rules, 2004 introduced w.e.f. 01.03.2007 and therefore, penalty cannot be imposed under Rule 25 of Central Excise Rules, 2004.
Only for the reason that the offence relating to imposition of penalty for issuing Cenvatable invoices without supply of goods is made an offence specifically from 01.03.2007, it cannot be concluded that there was no provision in the rules for imposition of penalty for such offence before 01.03.2007. It is found that a bare reading of the provisions gives a clear understanding that even before the amendment Rule 26 provided for imposition of penalty in the cases where the dealer did not account for the excisable goods or in cases of contravention of provisions of the Act and the Rules. It cannot be said that the dealers have accounted for the rules in a proper manner and did not contravene any provisions of law - The very fact that they have issued invoices in the name of M/s AIPL facilitating them to avail Cenvat credit while they have removed the goods elsewhere is a proof in itself that they did not account for the excisable goods properly and have violated the provisions of Rule 9 of Central Excise Rules, 2004.
Now, the question that comes is as to whether such non-accountal and contravention of provisions is with an intent to evade payment of duty. It is on record that the dealers are registered. They are aware of the provisions of law relating to issuance of invoices. Even then, they have issued Cenvatable invoices in the name of M/s AIPL without ensuring that the goods are also consigned to M/s AIPL. A positive act evidencing the intent to evade payment of duty is in the form of issuing Cenvatable invoices. Therefore, the dealers had contravene the provisions of rules with intent to evade payment of duty and they have rendered themselves liable to pay penalty under Rule 25 even before the insertion of sub-Section (2) under Rule 26.
Coming to the case of the transporters, they have not only confirmed the fact that the goods consign to M/s AIPL were transported upto Delhi and in no case were transported to M/s AIPL. Moreover, they have issued transport document evidencing procurement of goods by M/s AIPL - the transporters have also rendered themselves liable to pay penalty under Rule 26 ibid.
Even before insertion of sub-Rule 2 under Rule 26 of Cenvat credit Rules 2004, provisions existed for imposition of penalty under Rule 25 for the offence of issuing Cenvatable invoices without movement of goods. Similarly, there is a provision to impose penalty and for confirming a non-existent transportation goods under Rule 26 of Cenvat Credit Rules, 2004 - Revenue has a strong case in their favour and the impugned order cannot be sustained as far as dropping of penalty on respondent dealers/transporters - such penalty leviable on different dealers/transporters should be commensurate with the offence committed and to wipe of the benefit that has accrued to them while working as a deterrent against any such future repetition of the same.
The impugned order is modified to the extent of non-imposition of penalty on the respondents - Appeal disposed off.
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2024 (3) TMI 1098
Benefit of Nil Rate of duty - CENVAT Credit - MS Pipes - common inputs used in manufacture of dutiable as well as exempted final products without maintaining the separate accounts - fulfilment of the requirements of N/N. 6/2002-CE as amended by N/N. 47/2002 - HELD THAT:- The pipes are meant for intended use mentioned in Notification no. 47/2002/CE dated 06-09- 02 of Department of Revenue Ministry of Finance and Company Affairs, GOI, Issued under condition 47A of the above Notification. Thus, these certificates are found to specifically mention that the pipes are for being used for transferring water from source to the treatment plant and from there to the storage facility. The Certificates are issued by the Competent Government Authority. Hence, we do not find any reason to reject these certificates. Non-availability of these certificates at the time of clearance is nothing but a mere procedural lapse. Substantial benefit of Nil rate of duty arising out of a notification cannot be denied to the appellant on the said ground.
The appellant has otherwise duly complied with the requirement/ condition of the notification. Hence, it is held that the appellant cannot be held liable for duty demand with respect to such clearances for which certificates have been produced on record. Adjudicating authorities are held to have misinterpreted the certificates. It is merely a difference of language and the difference in the format of those certificates. The gist of the certificates is about the same purpose as is mentioned in Notification No.6/2002 as amended vide Notification No.47/2002 to claim the ‘Nil Duty’ benefit. Thus the appellant is held not liable to pay any excise duty.
The order under challenge is not sustainable. The same is hereby set aside. Appeal stands allowed.
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2024 (3) TMI 1097
Penalty u/sec. 270A - defective notice u/s 274 - non specifying the relevant limb at the time of initiation of penalty - HELD THAT:- It has duly come on record in light of the AO’s corresponding twin identical show cause notices that he had not specified the corresponding limb u/sec. 270A(8) read with sub-section(9) thereof as was held in various judicial pronouncements G.R. Infraprojects Ltd. [2024 (1) TMI 163 - RAJASTHAN HIGH COURT], Schneider Electric South East Asia (HQ) PTE Ltd. [2022 (3) TMI 1295 - DELHI HIGH COURT] and Prem Brothers Infrastructure LLP vs. NFAC [2022 (6) TMI 130 - DELHI HIGH COURT]
We further wish to draw support from hon’ble jurisdictional high court’s decision in Mohd. Farhan A. Shaikh vs. DCIT [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] that such a failure on AO’s part in not specifying the relevant limb at the time of initiation of penalty itself vitiates the entire proceedings being in the nature of an incurable defect. Faced with the situation, we delete the impugned penalties imposed - Decided in favour of assessee.
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2024 (3) TMI 1096
Levy of penalty - goods were unloaded at a place that was not registered in the registration certificate - shifting of burden of proof on the assessee to show that there was no intention to evade tax (onus to prove) - HELD THAT:- The intention to evade tax is sine qua non for imposition of penalty. The facts in the present clearly indicate that the place where the goods were unloaded is the godown belonging to the petitioner and not to any third party. It is not in dispute that this particular godown was registered as place of business of the petitioner in the erstwhile Value Added Tax regime.
There is no intention to evade tax whatsoever. The imposition of penalty in such circumstances is not warranted. The judgement of the Madurai Bench of Madras High Court in Algae Labs Pvt. Ltd. [2022 (4) TMI 466 - MADRAS HIGH COURT] also supports the case of the petitioner that unloading of goods at a different place by itself would not lead to imposition of penalty.
The impugned order dated July 28, 2022 is quashed and set aside. The writ petition is allowed.
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2024 (3) TMI 1095
Retrospective cancellation of GST registration of the petitioner - SCN does not specify any cogent reason - violation of principles of natural justice - HELD THAT:- The Show Cause Notice and the impugned order are bereft of any details accordingly the same cannot be sustained and neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation.
In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria.
It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent’s contention is required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.
It is clear that both the petitioner and the respondent want the GST registration to be cancelled, though for different reasons - In view of the fact that the Petitioner does not seek to carry on business or continue the registration, the impugned order dated 25.08.2023 is modified to the limited extent that registration shall now be treated as cancelled with effect from 08.11.2022 i.e., the date when the Show Cause Notice was issued. Petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017.
Petition disposed off.
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