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TMI Blog2015 (10) TMI 2002X X X X Extracts X X X X X X X X Extracts X X X X ..... ers had an understanding that service tax liability would fall on Appellant – Further, no boan-fide query raised to Department for liability of tax and thus claim for non-invocation of extended period cannot be sustained - Penalties imposed under Section 76 and Section 78 of Finance Act, 1994 are dropped by invoking the provisions of Section 80 of Finance Act, 1994 but demand for service tax, interest thereon and imposition of late fee are upheld – Decided in favour of Revenue. - ST/397/2011-SM - Final Order No. A/20931/2015 - Dated:- 8-4-2015 - Shri B.S.V. Murthy, Member (T) Shri P. Ramakrishna, Advocate, for the Appellant. Shri S. Teli, AR, for the Respondent. ORDER Appellant is a manufacturer of excisable goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. v. CCE, Ahmedabad [2010 (18) S.T.R. 39 (Tri.-Ahmd.)] Anushakti Chemicals Drugs Ltd. v. CCE, Rajkot [2010 (20) S.T.R. 122 (Tri.-Ahmd.)]. 2. The learned AR would draw my attention to Rule 4(a) and Rule 4(b) of Service Tax Rules and submits that the law is very clear and therefore the extended period has been rightly invoked and tax has been rightly demanded. 3. I have considered the submissions made by both sides. The relevant Rule 2(d)(v)(g) of Service Tax Rules provides that in relation to taxable service provided by a goods transport agency the consignor or consignee of the goods or any commercial establishment or a partnership firm registered by or under any law or any person who is or liable to pay freight himse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing through the invoice, it was noticed that Reliance had shown the basic assessable value, added Cenvat deduction, cess and sales tax and freight separately. It is to be noted that the invoice did not show insurance separately. This would show clearly that insurance was absorbed by M/s. Reliance Industries Ltd. Even the consignment note issued by PRC Logistics shows that insurance is on account of Reliance. Therefore, the three documents namely the purchase order, the invoice and the consignment note reflect a clear understanding between the three parties about the terms of sale which are delivery is FOR destination; basic price as per the purchase order is inclusive of insurance but exclusive of excise duty and sales tax. There is no men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sporter to them. They did not even ask Reliance why they should pay the tax and did not even make a claim before both the business partners. They did not even request the department as to whether they would be liable to pay service tax. In such a situation, I cannot agree with their own understanding of the law that they were not liable to pay tax. They have been told by the consignor as well as the transporter that they should pay the tax. What emerges from the facts discussed above is that appellant was aware that the service tax liability was on them and the three business partners had an understanding that the freight will be charged separately, transportation will be made by someone else and service tax liability would fall on the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... east enquired with the department. In such a situation, in the absence of any other evidence, when the law is not very clear but the service provider was advising that they should pay the tax, the bona fide belief could have been established only by either raising query with the business partner or with the department and at least get the legal opinion from a proper knowledgeable legal person. The appellants have not resorted to any of the courses and no evidence is forthcoming that they have resorted to such methods. Therefore, the claim for non-invocation of extended period cannot be sustained. 10. The next submission made by learned counsel was that in such an event, at least benefits of provisions of Section 80 should be extended. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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