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TMI Blog2018 (9) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be revenue neutral in view of the fact that in this case because service tax is being demanded from the Appellant only for the reason that the service provider is nonresident, in case service provider was located in India, service tax would have been paid by him in respect of the present transactions. Manner of payment of the tax would not change the nature of levy and in any case if the argument of revenue neutrality is accepted as permissible defense in the present case entire scheme of payment of taxes on reverse charge basis will become otiose and no business liable to pay service tax would be required to pay service tax in respect of services received by them from nonresident service providers, for the reason that the tax so paid will be available as credit to them. Penalty u/s 76 - delay in payment of service tax from the due date - Held that:- Various authorities as follows have upheld imposition of penalty under section 76 in case of delay in payment of service tax from the due date - reliance placed in the case of COMMISSIONER OF C. EX. CUSTOMS VERSUS SJ. MEHTA CO. [2010 (10) TMI 135 - GUJARAT HIGH COURT] - penalty upheld. Appeal dismissed - decided against ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by BCCI, I proceed to appropriate the said amount. c) I order recovery of interest on the aforesaid service tax of ₹ 1,59,92,743/- (Rupees One Crore Fifty Nine Lakhs Ninety Two Thousand Seven Hundred and Forty Three Only) under the provisions of Section 75 of the Finance Act, 1994. d) I impose a penalty of ₹ 93,58,512/- (Rupees Ninety Three Lakhs Fifty Eight Thousand Five Hundred and Twelve only) under Sec 76 of the Finance Act, 1994. e) I impose a penalty of ₹ 5000/- (Rupees Five Thousand Only) under Sec 77 of the Finance Act, 1994. f) I refrain from imposing any penalty under Sec 78 of the Finance Act, 1994. g) This order is issued without prejudice to any other action that may be taken against BCCI under the Finance Act, 1994 or under the provisions of any other Act for the time being in force in India. 2.1 Being aggrieved by the order of Commissioner, Appellants have preferred this appeal. 3.0 In their appeal, Appellants have challenged the order of Commissioner on following grounds: i. Revenue Neutrality- Since during the period under dispute, they were required to pay the service tax on their output services under the category of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii. Cochin Port Trust [2011 (21) STR 400 (Tri- Bang)]; iv. Dinesh M Kotian Vs Commissioner [2016 (42) STR 772 (T-Mum)]; v. Siddeshwar Textile Mills Pvt Ltd. [2009 (248) ELT 290. (T-Mum)]; c. In view of the revenue neutrality no undue benefit has come to them, and hence no penalty should have been imposed on them by invoking Section 80 of the Finance Act, 1994. 4.2 For the revenue Learned Authorized Representative submitted7 a. Issue in respect of levy of service tax on the services received by the Appellant from non residents under the category of Program Producer s Service has been settled by this tribunal in the Appellant s own case against them. The said order of the tribunal has been affirmed by the Apex Court. Hence there can be no further dispute in respect of levy of service tax on reverse charge basis in the present case. b. Revenue Neutrality as principle cannot be applicable in the present case because in the there can be no revenue neutrality as global concept. In the present case the tax is charged on reverse charge basis as the same is due from service provider who is not available or having any establishment in India. In none of the judgments ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Coca Cola referred by the Appellant, Apex Court has in para 3 to 7 held as follows:- 3. M/s. Britoo Food Company Limited was a wholly owned subsidiary of Coca Cola Company which has changed its name to Coca Cola India Limited. The assessee filed an application for such change in its name, which was allowed. 4. Assessee is the manufacturers of, inter alia, their products, namely, Nonalcoholic beverages bases / concentrates , which the Assessee or their bottlers required for making beverages and aerated waters, and which, in turn, were sold by the bottlers under the name of Coca-Cola, Thumps Up, Gold Spot, Limca, Citra, etc. 5. The assessee in paragraph No. 3 of its counter-affidavit has stated, as under: 3. The present appeal has no Revenue implication. The dispute relates to classification of beverage bases/ concentrates manufactured by the Respondent, which are supplied to bottlers, who in turn use the same as raw material in the manufacture of beverages. They duty payable in respect of beverage basis/concentrates is modvatable. Since the duty payable by the Respondent is modvatable, there is no revenue implication. The issue of classification is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e identical to the case considered by the Apex Court in case of Textile Corporation Marathwada Ltd and has followed the said decision. Since the facts of present case distinguishable from the case Textile Corporation Marathwada Ltd they are distinguishable from the facts of this case too. Accordingly the said decision would have no impact in present case. 6.3 In case of Cochin Port Trust, tribunal has in para 5.1 recorded as follows: As regard royalty, we find that CPT received part of revenue earned by IGTPL as consideration for allowing IGTPL to operate the port whereas IGTPL rendered the service taxable under port service and paid the tax due on the total revenue. We do not find 1/3 of that revenue received by CPT liable to tax under Port Service at the hands of the appellant. Letting out the port premises for operation by IGTPL does not amount to rendering of the port service. In any case, if at all any service tax is paid on this amount, the same will be available to IGTPL as CENVAT Credit to IGTPL as CENVAT Credit, which can be used for paying service tax on port services rendered by it. In our view this decision has been rendered for the reason that bench found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Apex Court observed as follows: 22. It was urged that the assessee was under a bonafide impression that no duty was leviable on the goods; the full quantity of disputed goods was used captively and, therefore, proforma credit / modvat credit was available in respect thereof and, therefore, there was no intent to evade payment of duty. In support of the aforestated submissions, it was urged that suppression or breach of rules by itself would not amount to intention to evade; that some positive act of deliberate suppression or breach of rules was required to be shown by the department; that, if the assessee showed that credit available to it was equal to the demand then there may not be the case of intention to evade payment of duty. In this connection, reliance was also placed on the judgments of this Court in Amco Batteries Ltd. v. Collector of Central Excise, Bangalore reported in 2003 (153) ELT 7; Padmini Products v. Collector of Central Excise reported in 1989 (43) ELT 195; and Formica India Division v. Collector of Central Excise reported in 1995 (77) ELT 511. 23. We do not find merit in the above contentions. In this matter, we are concerned with the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this connection, no evidence was put before the commissioner about receipt and utilization of the compound in the manufacture of Tulsi Zafrani Zarda. No evidence was led to show that the amount of proforma / modvat credits was equal to the duty demanded, although it was urged that after 3/94, the liability to duty on inputs stood shifted to the final product. 25. Modvat is basically a duty collecting procedure which provides relief to the manufacturer on the duty element borne by him in respect of the inputs used by him. The relief is given under the modvat scheme on the actual payment of duty on the input. On such payment, the assessee gets a right to claim adjustment/set-off against the duty on the final product. The question of duty adjustment/set-off against duty on the final product was not in issue. In any event, no record on credit entitlement was produced. A right to claim proforma/modvat credit against duty on final product was different from the defence of bonafides in a case where circumstances mentioned in the proviso to section 11A(1) stands proved by the department for invoking larger period of limitation. The burden to prove the defence of bonafides was on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2803300 13189443 2803300 13189443 Date of Payment 14.1.15 14.1.15 14.1.15 14.1.15 No of Days 214 184 1377 1377 Penalty =No of Days X 200/ 100 as the case may be 42800 36800 137700 137700 Penalty on Percent basis 399937 1617905 1286715 6053955 Total Penalty on basis of ₹ 200/ 100 per day 79600 275400 355000 Total Penalty on Percent basis 1686652 7671860 9358512 After calculating the penalty as above by both the methods as prescribed by the Section 76, Commissioner has imposed the higher of penalties as provided by the section. 7.1 Hon ble High Court of Gujarat in the case of CCE Cus. Vs Port Officer, reported at 2010 (19) STR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty imposable under Sec 76 is for failure to pay service tax by the person liable to pay the same in accordance with the provisions of Sec 68 and the rules made thereunder, whereas Sec 78 relates to penalty for suppression of the value of taxable service. Of course, these two offences may arise in the course of the same transaction, or from the same act of the person concerned. But we are of the opinion that the incidents of imposition of penalty are distinct and separate and even if the offences are committed in the course of same transaction or arises out of the same act, the penalty is imposable for ingredients of both the offences. There can be a situation where even without suppressing value of taxable service, the personal liable to pay service tax fails to pay. Therefore, penalty can certainly be imposed on erring persons under both the above sections, especially since the ingredients of the two offences are distinct and separate. Perhaps invoking powers under Section 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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