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TMI Blog2018 (12) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... claim, that the flights originated and terminated in J&K - Service Tax is not chargeable on the value of services provided in J&K as per Section 64 of the Finance Act, 1994 and demand of ₹ 6,44,66,914/- is held not sustainable under the law and is set aside. Demand of Service Tax - total value of parts and spares used for maintenance and repairs - Held that:- The appellant has provided as above, the total value of parts and spares used for maintenance and repairs was ₹ 10,37,49,243/- This amount is not chargeable to Service Tax and the demand of ₹ 1,12,46,921/- in respect of value of parts and spares is not sustainable under the law and therefore is set aside. CENVAT Credit - service of pilot hiring - service component under Maintenance and Repair Service - Held that:- The appellant has paid Service tax of ₹ 31,45,915.01 under Reverse Charge Mechanism, in respect of service of pilot hiring and service component under Maintenance and Repair Service - the CENVAT Credit of the same is admissible to the appellant. Adjustment of unutilised Cenvat credit of ₹ 4,01,847/- against the Service tax liability - Held that:- The input credit on these input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (5) TMI 76 - SUPREME COURT OF INDIA], the Hon’ble Supreme Court held that in the circumstances where there was bona fide dispute between the parties in regard to the legal interpretation of law, penalty cannot be imposed on Appellant-assessee. Appeal allowed in part. - Appeal No. ST/50579/2017-DB - FINAL ORDER No. 53349/2018 - Dated:- 30-11-2018 - Shri Anil Choudhary, Member (Judicial) And Shri Bijay Kumar, Member (Technical) Shri A.S. Hasija, Consultant for the Appellant Shri Sanjay Jain, DR for the Respondent ORDER Per Anil Choudhary: The appeal is directed against Order-in-Original No. DLI/SVTAX-002-COM-431-1617, dated 30.12.2016 passed by Commissioner of Service Tax, Delhi-II, Nehru Place, New Delhi. 2. Acting on intelligence that the appellant, M/s. Himalayan Heli Services Pvt Ltd, having registered office at 104, 7, Local Shopping Centre, Madangir, New Delhi, are engaged in providing taxable services under the category of Supply of Tangible Goods for Use and were not discharging service tax liability thereon, investigations were initiated by the anti-evasion wing of the Service Tax Commissionerate-II, at New Delhi. Though the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest on the amount of demand confirmed was also confirmed. Cenvat credit on inputs was disallowed. Various penalties were imposed as proposed. 3.1. The appellant has contested the stand taken by the department from the beginning of the investigation(s) in the matter. The correspondences made by the appellant, are admitted in the impugned order. The appellant has contested that the appellant owns several helicopters, has a Non Scheduled Operators Permit No. 1/2002 (NSOP) issued by the Directorate General of Civil Aviation (DGCA) and is engaged in providing services of transportation of the passengers/goods. The appellant has classified the services provided under the category of transport of passengers by air service , and has paid Service Tax w.e.f. 1-7-2010, when the scope of taxable service was extended to include domestic air travel . The Department s contention is that the services are in the nature of supply of tangible goods for use service ( SOTG ), taxable w.e.f. 16-5-2008, which is only change of opinion under the admitted facts. 3.2. The Learned Commissioner has adjudicated the case relying on the majority judgment by the Larger Bench judgment of the CESTAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hequer. Whereas the fact is that Sh. Ajay Vir Singh, Director of the appellant, in his statement dated 03.12.2012 has admitted that the appellant collected service tax from customers and did not deposit the same due to the fact that they had paid service tax on inputs and they were under the impression in that case they need not pay service tax. But when pointed out by Revenue, the appellant deposited ₹ 38,00,000/- towards payment of service tax, including interest. The Ld. Commissioner has appropriated the same as correct in the impugned order. 3.6 In the facts and circumstances penalty is not imposable under Section 76,77,78 of the Finance Act, 1994 that as stated above, the Appellant did not pay tax for the reasons mentioned above, and since the same under a bona fide belief, penalty under section 76 for non-payment of tax, under section 77 for failure to file ST-3 in a proper manner and under Section 78 for deliberately suppressing the facts, is not leviable under the Finance Act, 1994. 3.7 That the Appellant did not utilize available CENVAT Credit of ₹ 4,01,847/- for the payment of Service tax liability of the concerned period. Thus, the available CENVAT cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng services in J K which appears to be admissible. Further assessee has also furnished the details of Foreign Currency Expenditure. As per the details of the Foreign Currency Expenditure the assessee has imported spare parts of the helicopters which are non taxable and expenditure plus reimbursement for training and air tickets for travel, also appears to be out of purview of Service Tax as per Rule 6 of Place of Provision of Service Rules, 2012. Further with regard to pilot salary expenses in foreign currency, the party is liable to pay Service Tax on import of service under Notification No. 30/2012-ST dated 20.06.2012 read with Section 68(2) of the Finance Act, 1994 . But the Learned Commissioner confirmed the demand in respect of all the items or heads mentioned above. 3.12 That extended Period of Limitation is not invokable in the present matter. The Appellant has not suppressed any information with intent to evade payment of Tax. As per Section 73(1) of the Act, in a normal case SCN can be issued at any time within one year from the relevant date. Proviso to Section 73(1) of the Act provides that SCN can be issued at any time within five years from the relevant date, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opposed the contentions of the appellant and submitted as follows :. 4.1 The appellant had entered into agreements with clients on charter basis to supply helicopters for use by them, without parting with the right of possession and effective control of such helicopters. Supply of tangible goods including machinery, equipment and appliances for use, without transferring the right of possession and effective control of such machinery, equipment and appliance became liable to service tax with effect from 16-5-2008. However, the appellant did not pay any service tax under the said service. Therefore, SCNs were issued to the appellant. Subsequently, the appellant started paying service tax under the category of transport of passengers by air which covered all domestic air passengers embarking in India w.e.f. 1st July, 2010. The appellant did not pay Tax under Supply of tangible goods even after being informed by the department and rather contested the classification under the said category, thus avoiding payment of Service Tax under correct classification. Therefore, extended period is applicable even though the appellant has now accepted the classification under the Supply of tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of payment made in foreign currency for spare parts, etc under Maintenance and Repair during next hearing. 5.3. Next hearing was held on 03.10.2018 when appellant submitted the required sample invoice. Sh Hasija explained that under the agreement with Shri Amarnath Shrine Board, it obligatory to make 50% booking online and remaining 50% booking are made by local agents situated in Jammu and Kashmir and that is the reason that names of agents and individuals appear on the invoices. On perusal it was observed that invoices contained names of the agent/ passengers booked, amount charged and date of booking. The details tallied with the details already on record as mentioned above and each invoice was supported and tallied with corresponding passenger manifests, which proved the claim of the appellant that the service originated and terminated in J K, and is not chargeable Service Tax under Section 64 of Finance Act, 1994. 5.4. Perusal of invoices submitted evidences that they contain invoice numbers, amount and name of the parties, which tallied with the details already on record mentioned above. The invoices contained details of spare parts like name of the individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pilot salary S.Tax on pilot hiring (Rs) Spare parts (Rs) Service amount (Rs) S.Tax paid under RCM (Rs) 2008-09 - - 9202742 11168208 1380390.53 2009-10 3405295 350745.39 15860507 20845 2147.04 2010-11 3352941 345352.92 14040833 1764081 181700.34 2011-12 4324681 445442.14 20557762 275082 28333.45 2012-13 642911 66219.83 11422200 86508 8910.32 2013-14 2723892 336673.05 21665199 - - Total 14449720 1544433.05 103749243 13314724 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts and spares is not sustainable under the law and therefore is set aside. The appellant has paid Service tax of ₹ 31,45,915.01 under Reverse Charge Mechanism, in respect of service of pilot hiring and service component under Maintenance and Repair Service. We hold that the CENVAT Credit of the same is admissible to the appellant. 5.8. The appellant has contested that unutilised Cenvat credit of ₹ 4,01,847/- should have been adjusted against the Service tax liability for the concerned period, if any. 5.9. That for providing charter services, the Appellant had availed various input services on which Service tax has been paid by the Appellant. These input service included Flying charges, Chartering charges, Airport services, Space License Fee at Delhi Intl. Airport, Aircraft parking charges, Housekeeping Services, Maintenance Charges of Helicopter/ Aircraft, Loaning of Pilots, Inspection charges of hardware of Helicopters/Aircraft, Flight handling charges, Freight Customs charges for import of parts of Helicopter/ Aircraft, Monthly routine charges of inspection of Helicopter/Aircraft, Hiring of Helicopters, Transportation of passengers charges, QC coverage of Hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Therefore we hold that the CENVAT Credit of Rs ₹ 4,01,847/- is admissible to the appellant. 5.11. The appellant has contested that Extended Period of Limitation is not invokable in the present matter, because the appellant has not suppressed any information with the intent to evade payment of Tax. As per Section 73(1) of the Act, in a normal case SCN can be issued at any time within one year from the relevant date. Proviso to Section 73(1) of the Act provides that SCN can be issued at any time within five years from the relevant date, if service tax was not paid or levied by reason of fraud or collusion or wilful misstatement or suppression of facts or contravention of any provisions of the Act or Rules with intent to evade payment of service tax. Thus the extended period of limitation is applicable only if any of the ingredients specified above exists. Further, in case a periodical return was required to be filed, then the relevant date will be the date on which such return was filed or last date of filing the return. In the present case the demand in respect of SCN dated 24.10.2013 is for the period 01.4.2008 to 31.03.2012. The show cause notice is dated 20,10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court has held that where the department was aware of the activities of the assessee, the extended period of limitation could not be invoked on the basis of the bold allegation of suppression on the part of the assessee. In Anand Nishikawa Co. Ltd. Vs Commissioner of Central Excise, Meerut-2005 (188) ELT 149 (SC) the Hon ble Supreme Court observed as below:- ..we find that suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties the omission by one to do what he might have done not that he must have done would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression 5.13. The ratio of the above said judgments is applicable in the case in hand. The invocation of extended period of limitation is set aside. Since the appellant has accepted the Larger Bench judgment of the CESTAT in the case of Global Vectra Helicopter Ltd Vs Commissioner of S.T Mumbai-II-2016(42) STR 118 (Tri-Mumbai) wherein it was held that services of providing helicopter/ air craft on charter basis along with pilot and other f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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