9911796707
TMI Blog2015 (1) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon’ble Supreme Court in the case of Indu Nissan Oxo Chemicals Industries Ltd. Union of India reported in [2007 (12) TMI 220 - SUPREME COURT OF INDIA] wherein it is held that while considering waiver of condition as to pre-deposit, condition can be waived on the ground of undue hardship. As such the petitioner has not pleaded any undue financial hardship. Now so far as safeguarding the interest of the revenue is concerned, as it is required to be noted that as such the petitioner did charge and recovered the amount of service tax from FCI, which the petitioner retained with it and did not deposit the same in the Central Government Account and, therefore, considering Section 73A of the Act the petitioner is liable to deposit the same in the Central Government Account. Under the circumstances and in the facts and circumstances of the case and considering the provisions of Section 73 of the Act, no error has been committed by the learned CESTAT in not passing the order of full waiver of pre-deposit, which the petitioner charged and recovered from FCI and did not deposit the same in the Central Government Account. It is required to be noted that as per Section 73A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,855/-. Thus, it was found that during the period 2006-07 and 2007-08, the petitioner charged a sum of ₹ 5,44,83,233/- towards service tax and had recovered a sum of ₹ 5,36,90,043/- towards service tax from FCI during the same period. It was found that during 2009-10, the petitioner provided Cargo Handling Service to M/s. GPPL and charged a sum of ₹ 2,32,75,546/- towards service tax, which was not deposited to the Government Account by the petitioner-assessee. Thus, it was found that during the period from 2006 to 2010 the service tax amounting to ₹ 7,69,65,589/- recovered and collected by the petitioner was not deposited to the government account by the petitioner-assessee and, therefore, show cause notice came to be issued by the Commissioner, Central Excise Customs, Vadodara II - adjudicating authority calling upon the petitioner to show cause why service tax amounting to ₹ 7,69,65,589/- should not be recovered under Section 73A of the Finance Act, 1994 (hereinafter referred to as the Act ) along with interest under Section 73B of the Act. The petitioner replied to the said show cause notice dated 5-10-2012 and 24-1-2013 and the petitioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, more particularly, to the effect that on the services rendered by the petitioner to FCI, no tax is leviable in view of exemption Notification. It is submitted that the learned CESTAT has also not considered and/or dealt with the submissions made on behalf of the petitioner that the amount of service tax, which was recovered by the petitioner, was taken credit by FCI subsequently and they have adjusted the entire amount in the bills, which were raised by the petitioner subsequently as they were having running account. It is further submitted by Shri Shalin Mehta, learned Counsel appearing on behalf of the petitioner that the impugned order passed by the learned CESTAT directing the petitioner to deposit a sum of ₹ 5 crores towards pre-deposit cannot be sustained. 3.1 Shri Shalin Mehta, learned Counsel appearing on behalf of the petitioner has further submitted that as such in the case of pre-deposit not only undue hardship is likely to be caused to the revenue but also the interest of the assessee is required to be considered. He has further submitted that something more than economical hardship of the petitioner-assessee is also required to be considered. In su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment, which the petitioner had collected from his clients. It is submitted that therefore considering the provisions of the Finance Act, 1994, more particularly, Section 73 of the said Act, show cause notice has rightly been confirmed and, therefore, the petitioner is rightly directed to deposit ₹ 5 crores as pre-deposit. 4.1 It is submitted that during the year 2006-07, the petitioner had provided Cargo Handling Service to FCI in respect of 736123.071 MT of wheat of which FCI had admitted the bills, which totally valued at ₹ 33,94,54,351/- inclusive of the service tax amounting to ₹ 3,70,18,188/-. It is submitted that during the year 2007-08, the petitioner had provided Cargo Handling Services to FCI in respect of 343253.762 MT of imported wheat to FCI in respect of which FCI had admitted the bills, which totally valued at ₹ 15,15,57,427/- inclusive of service tax to the tune of ₹ 1,66,71,855/-. It is submitted that the petitioner had recovered the total amount of ₹ 5,36,90,043/- towards service tax from FCI during the said period, however, the same was not deposited by the petitioner-assessee to the Central Government account. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of service tax in the Central Government Account, the FCI is entitled to get back the same, considering Section 73A(5) of the Act is concerned, it is submitted that the aforesaid aspect is not required to be considered at this stage. It is submitted that so far as the petitioner is concerned as the petitioner had recovered the service tax amounting to ₹ 5,36,90,043/- from FCI, considering Sections 73 and 74 of the Act, the petitioner is liable to make the said payment and credit it to the account of the Central Government. 4.3 Now so far as the submission of Shri Mehta, learned Counsel appearing on behalf of the petitioner that as the petitioner had already approached the FCI to return the amount to the petitioner so that the same can be deposited with the Central Government is concerned, it is submitted by Shri Bhatt, learned advocate appearing on behalf of respondent No. 2 that so far as the correspondence between the petitioner and the FCI is concerned, the Department has nothing to do with the same. It is submitted that as the petitioner had recovered the amount of service tax from FCI the petitioner was required to deposit the same with the Central Government, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted the bills, which totally valued at ₹ 15,15,57,427/- inclusive of service tax to the tune of ₹ 1,66,71,855/-. It is submitted that the petitioner had recovered a total amount of ₹ 5,36,90,043/- towards service tax from FCI during the said period, however, the same was not deposited by the petitioner-assessee to the Central Government account. 5.1 Considering the above, when the petitioner was providing the services of Cargo Handling Services and recovered a sum of ₹ 5,36,90,043/- towards service tax from FCI, however, did not deposit the same to the Central Government Account, considering Section 73A of the Act, the petitioner was liable to pay the said amount to the Central Government Account and as the petitioner failed to deposit the said amount of service tax to the Central Government Account, though recovered from the FCI, the petitioner was served with the show cause notice and thereafter the show cause notice and the demand of service tax with interest payable has been confirmed against which the petitioner has preferred appeal before the learned CESTAT and considering the provisions of Section 73A of the Act the petitioner is directed to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.) wherein it is held that while considering waiver of condition as to pre-deposit, condition can be waived on the ground of undue hardship. In the aforesaid decision, the Division Bench has also observed that twin requirement at the time of directing the pre-deposit under Section 35F of the Act as laid down in the case of Benara Valves Ltd. Ors. (supra) are; (a) undue financial hardship of the parties and (b) safeguarding the interest of the revenue. In the present case, as observed hereinabove, as such the petitioner has not pleaded any undue financial hardship. Now so far as safeguarding the interest of the revenue is concerned, as it is required to be noted that as such the petitioner did charge and recovered the amount of service tax from FCI, which the petitioner retained with it and did not deposit the same in the Central Government Account and, therefore, considering Section 73A of the Act the petitioner is liable to deposit the same in the Central Government Account. Under the circumstances and in the facts and circumstances of the case and considering the provisions of Section 73 of the Act, no error has been committed by the learned CESTAT in not passing the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
