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TMI Blog2021 (6) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... before the adjudicating authority as well as in this appeal, we hold that that the service received by the appellant is liable to service tax. Time Limitation - Penalty - HELD THAT:- The adjudicating authority has not verified any fact related to revenue neutrality - the appellant have submitted certain documents before us showing that they were eligible for Cenvat Credit which they have already availed in respect of Service tax paid by them and during the relevant period they have discharged the excise duty of a substantial amount from their PLA account - the limitation as well as imposition of penalty needs to be reconsidered on the point of the revenue neutrality particularly on the document submitted by the appellant. Appeal allowed by way of remand. - Service Tax Appeal No.338 of 2012 - A/11900/2021 - Dated:- 24-5-2021 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) The brief facts of the case are that the appellant raised finance through External Commercial Borrowings (ECB) Foreign Currency Convertible Bonds (FCCB) for which they have received services of various service provider viz. Merchant Bankers, Lead Managers, Advisors, Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 19,34,555/- paid by the Noticee was also proposed to be appropriated against their interest liability. iii) Impose penalty under Section 76 of the said Act; iv) Impose penalty under Section 77 of the said Act for obtaining service tax registration late and late filing of ST-3 returns; and v) Impose penalty under Section 78 of the said Act for suppressing the facts by not disclosing the value of taxable service. 1.2 The said show cause notice was adjudicated by the Commissioner, Customs and Central Excise, Rajkot vide impugned order dated 23.03.10 whereby, the following order was passed: I. I drop the demand of Service tax amounting to ₹ 1,48,83,228/-(Rs.One crore forty eight lakhs eighty three thousand two hundred two eight only); II. I confirm the demand of service tax amounting to ₹ 1,37,51,388/-( Rs. One Crore thirty seven lakhs fifty one thousand three hundred eighty eight only) under proviso to section 73(1) of Finance Act, 1994 made against M/s. ESSAR OIL LTD., post box No:24, Head P.O. Khambhalia, Dist:Jamnagar 361 305 and since an same has been paid by the noticee vide challan dated: 24.11.2007 I order for its appropriation; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide intention nor any suppression of fact on the part of the appellant has been proved. Therefore, extended period of demand could not have been invoked. He submits that initially for service in question the ICICI Bank, India has discharged the service tax and debited to the appellant. Subsequently, when they realized that service tax was payable by the appellant the ICICI Bank has credited the amount of Service Tax to the account of the appellant. Thereafter, this process could not be communicated to the Indirect Tax Department of the appellant therefore, the payment of Service Tax was delayed and the appellant has made good by paying the interest. He submits that only due to delay in payment extended period could not have been invoked. He further submits that since there is no mala fide intention on the part of the appellant, penalties imposed in the impugned order is not correct and legal. 2.1 He vehemently submitted that the service tax payment in the present case is on reverse charge mechanism, had the appellant paid service tax on time they were eligible for Cenvat Credit therefore, the entire exercise was revenue neutral. Post hearing he also submitted some documents sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 656 (SC)- STAR INDUSTRIES v/S. CC(IMPORTS), RAIGAD. 04. We have carefully considered the submissions made by both the sides and perused the record. As regard the issue of taxability of service in question, we find that the appellant has neither raised this issue seriously before the adjudicating authority nor even in the appeal memo filed before us. It is also observed that the appellant have vehemently argued that their case is covered under Section 73(3) Finance Act, 1994. Section 73(3) applies only in such case where the assessee undisputedly accepting the liability discharged the service tax and interest before issuance of Show Cause Notice subject to some other conditions as laid down in Section 73(3) therefore, since the appellant having not contested the issue of taxability of service at any point of time before the adjudicating authority as well as in this appeal, we hold that that the service received by the appellant is liable to service tax. 4.1 As regard the limitation and imposition of penalty, we find that the appellant had raised an important point of revenue neutrality even before the adjudicating authority. The adjudicating authority on the point of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g imposition of penalty in the case of revenue neutrality has been put to rest by the Apex Court in their judgment in the case of PUNJAB TRACTORS LIMITED V/S. COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH reported at 2005 (181) ELT 380 (SC) wherein it has been held that in the case of revenue neutrality if there is violation of rules then penalty is imposable. I find that the ration of the said judgment is squarely applicable to the present case as there is violation of the provision of the Finance Act, 1994 and rules made thereunder. 4.2 From the above finding, we observed that firstly the adjudicating authority has not verified any fact related to revenue neutrality. Secondly, he has relied upon certain judgments of DECCAN VANNER PVT. LTD.(supra) and upon PUNJAB TRACTORS LIMITED. However, the appellant have submitted certain documents before us showing that they were eligible for Cenvat Credit which they have already availed in respect of Service tax paid by them and during the relevant period they have discharged the excise duty of a substantial amount from their PLA account. As regard the issue of revenue neutrality learned counsel has relied upon various judgments which have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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