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TMI Blog2018 (2) TMI 1845X X X X Extracts X X X X X X X X Extracts X X X X ..... er recruitment, (b) Transport of Goods by road, & (c) Construction of Residential Complex as defined under Section 65 of Chapter V of the Finance Act, 1994 as amended and chargeable to Service Tax under Section 66B of the Finance Act, 1994. 1.2 It is alleged that the applicant company evaded payment of service tax to the tune of Rs. 12,13,407/- (incl. Cess). During Audit under EA 2000, the applicant accepted the fact of evasion of service tax and voluntarily deposited Rs. 11,73,019/- (incl. Cess) + Interest. After necessary assessment, the SCN was issued on 29-9-2015 whereby the applicant was called upon to show cause to the Additional Commissioner of Central Tax, and service Tax, Tikrapara, Dhamtari Road, Raipur - 492 001 as to why : (i) Service Tax amounting to rupees 12,13,407/- (ST-Rs. 11,78,066/-, E. Cess Rs. 23,561/- and SHE Cess Rs. 11,781/-) should not be demanded and recovered in terms of the proviso to Section 73(1) of the Finance Act, 1994 and as to why Service Tax of Rs. 11,60,980/-(ST-Rs. 11,25,224/-, E. Cess Rs. 22,504/- and SHE Cess Rs. 11,253/-) already paid by the noticee should not be appropriated. (ii) Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of 75% abatement on construction of flats having area of more than two thousand Sq. ft. as per provisions of Notification No. 9/2013-S.T., dated 8-5-2013 is not supported by any documentary evidence such as copy of agreement or sale deed, etc. The chart submitted along with the letter of the applicant dated 24-2-2015 illustrating demand of excess Service Tax, shows registry of the flats in March, 2013 whereas payments are shown to have been received in subsequent months of registry. Hence a clarification may be sought. * The applicant's contention of bona fide mistake cannot be accepted as had the Audit Section not detected the case from their books of account, the applicant would never disclose the facts. * Also, despite agreeing with the observation of the Audit, they did not pay the Service Tax immediately but paid the same in respect to Paras 1 to 3 after more than a month. The interest was paid on June, 2014 and February, 2015 after persuasion of the deptt., which established their mala fide intentions. * As per Sec. 78 of the Finance Act, 1994, benefit of reduced penalty of 15% of the demand within 30 days of receipt of the notice was legally available to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have made payment of S. Tax of the services falling under reverse charge mechanism, before the objections of Audit team, the company would have availed the Cenvat credit and the transaction would be revenue neutral in case the applicant would have paid earlier. There was no attempt made by the company to evade tax. It was only a procedural lapse as the law was amended in 2012 for which the liability has risen. * Delay in payment of liability as demanded :- The Audit team conducted Audit on 8-2-2014 and 11-2-2014 and the demand was raised. The company agreed upon the demand except the part as submitted earlier. They made the payment on 26-2-2014 i.e. immediately after audit. The balance liability was discharged by the company gradually as per availability of the fund. The company has never received any communication from the deptt. to discharge the liability. The claim of constant persuasion is incorrect. * Waiver of penalty :- The company was discharging his S. Tax liability by his own. There was only a lapse in computation of tax liability under RCM as the law relating to that was newly introduced during the impugned period and the company was unaware of the modus operan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deposited further Rs. 2,997 towards tax and Rs. 2,920 towards interest. Hence now there is tax liability of Rs. 40,388 - Rs. 2,997 = Rs. 37,391 is remains unpaid. 4.6 Total liability admitted and paid by the applicant comes to Rs. (11,73,019 + 2,997) = Rs. 11,76,016 along with interest of Rs. (2,34,997 + 2,920) = Rs. 2,37,917. 5.1 The matter was heard on 18-1-2018. Shri J.K. Gupta, Chartered Accountant appeared on behalf of the applicant, M/s. Alliance Commercial Transport. The following submissions were made on behalf of the applicant :- (i) That out of the total demand of Rs. 92,815, under residential complex services, the applicant is not liable to pay Service tax amounting to Rs. 40,388, as during the relevant period the applicant is entitled to benefit of 75% abatement and the department has wrongly calculated tax amount by giving them 70% exemption. W.e.f. 1-3-2013, exemption of 75% was made applicable only in respect to residential unit having carpet area up to 2000 Sq. Ft. Or where the amount charged is less than Rs. 1 crore : (ii) That from 8-5-2013, the term or was substituted by and therefore having units mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 sq. ft., though the amount for consideration was less than 1 crore. Hence, from the period 1-3-2013 - 7-5-2013 the taxable amount would be 25% of the total value but after 7-5-2013 it would attract tax at 30% (copy of registries enclosed). The net difference of the tax payable comes to Rs. 37,391. * The amount of tax on Ajay Moolchdani of Rs. 2,997 was not considered by the applicant which, after consultation with the department was accepted later along with interest. 6.1 This Bench has considered the submissions of both applicant and the Department. This is a case of short payment of Service Tax by the applicant, who is engaged in providing taxable services, namely, Manpower recruitment, Transport of goods by road and construction of residential complex, as defined under Section 65 of Chapter V of the Finance Act, 1994, as amended. The short payment was detected during the audit, and the applicant accepted the fact of evasion and deposited Rs. 11,73,019 plus interest. Subsequently, a SCN was issued demanding tax of Rs. 12,13,407 proposing appropriation of Rs. 11,73,019/- paid earlier. The applicant did not dispute the demand except for certain amount in respect of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration is more than 1 crore. 6.4 In the present case, as is undisputed by the Department, the consideration is less than 1 crore on all the units on which the applicant was claiming the exemption and therefore, for the period from 1-3-2013 to 7-5-2013, they are duly eligible for claiming the exemption of 75% of the value and taxable amount would be 25%. 6.5 Since during the period from 1-3-2013 to 7-5-2013, the exemption of 75% was given to residential units having carpet area less than 2000 sq. ft. or where even consideration is less than one crore and since the consideration received was less than one crore in the case of the applicant during the period from 1-3-2013 to 7-5-2013, the exemption notification is applicable to them and they have to pay tax on 25% of the amount charged. Accordingly, Rs. 37,391 demanded by the Department does not sustain. 6.6 Out of the total demand of Rs. 12,13,407, the applicant has paid Rs. 11,60,980 before issue of the SCN and Rs. 2,997 at a later stage. Thus, the total amount paid was Rs. 11,76,016. The applicant has also paid the interest amounting to Rs. 2,37,917. Payments of the above amount of Service Tax and interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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