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TMI Blog2022 (5) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... is upheld. Once the Appellant is not liable to pay Service Tax, they are also not entitled to avail cenvat credit of the amount collected in the name of Service Tax and is liable to be paid to the Government Exchequer. Applicability of provisions of Section 11D - HELD THAT:- The present case is one where tax was collected even though the activity was liable to tax. Only sub-section (1A) of Section 11D covers such a situation and this sub-section was introduced only in 2008 - The present case is not covered under Sub-section (1) which deals with collection of an amount of tax in excess of the liability - the demand under Section 11D for the period upto 17.04.2006 is set aside. Demand under Section 73A(2) for the period after 18.04.2006 is upheld - The demand of interest under Section 73B is set aside - The imposition of penalty under Section 77 (2) set aside - The demand towards ineligible credit is confirmed and the amount reversed as payment of Service Tax will be treated as reversal - The demand of Service Tax of Rs.17,85,000 on import of service, along with interest and imposition of penalty are set aside. Appeal allowed in part. - Service Tax Appeal No.417 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed. Another demand of Service Tax to the tune of Rs.17,85,000/- was also raised in the Show Cause Notice on the ground that Appellant had received various technical services from foreign persons during the period 2005-06 and the Appellant was liable to pay Service Tax thereon under reverse charge mechanism (RCM). 3. In adjudication of the Show Cause Notice vide the impugned order the following demands have been confirmed; (a) an amount Rs.4,75,36,478/- has been confirmed under Section 11D read with Section 73A of the Finance Act, 1994, ibid and after considering an amount of Rs.1,79,00,496/- paid by the Appellant in cash, the remaining amount Rs.2,96,35,982/- was ordered to be paid in cash. (b) Interest on the above demand under Section 73B of Finance Act 1994 has been confirmed; (c) CENVAT Credit 3,29,32,249/- availed by the Appellant is held to be ineligible. But no interest is demanded in this regard in as much as the said credit has been reversed for payment of Service Tax; (d) Demand of Service Tax of Rs 17,85,000 has been confirmed; (e) Appropriate interest under Section 75 of Finance Act, 1994 has been confirmed on the above demand. (f) A penalty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uming that the Appellant is not liable to pay Service Tax, sub section (1) of section 11D is not applicable in this case, since the said sub section deals only with a case involving collection of more amount of tax than the tax payable. Sub section (1A), which deals with collection of tax when no tax was payable was introduced only with effect from 10.05.2008. As the present case involves collection of Service Tax where no such Service Tax was leviable, the demand under section 11D(1) is not sustainable. In this connection reliance was placed on the decision of the Tribunal in the case Everest Industries Ltd V CCE 2019(369) ELT 1569 -Tri Chennai. With effect from 18.04.2006 the demand has been made under Section 73A of the Finance Act, 1994 and sub section (2) of 73A covers the present situation and hence, if at all the demand is sustainable it can be demanded only for the period after 18.04.2006. With regard to demand of interest under Section 73B it was argued that said section castes interest liability only in respect of the demands under sub-section (1) of 73A and not for demands under sub-section (2) of 73 A. In this connection reliance has been placed on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case issue is whether the Appellant is liable to pay Service Tax under complex service prior to 1.6.2007. 7. We have carefully considered the elaborate submissions made by both sides and perused the relevant documents. 8. We observe that as per decision of the Hon ble Supreme Court in CCE v L T limited [2015 (39) STR 913 SC] composite contracts involving transfer of property in goods is not liable to Service Tax prior to 1.6.2007. Thus, the law on this point is well settled. Though the said grounds were not raised in the Show Cause Notice or in the impugned order, since the decision of the Hon ble Supreme Court is binding on this Tribunal we cannot hold that the Appellant was liable to pay Service Tax. Hence, we uphold the finding of the Commissioner that the Appellant was not liable to pay Service Tax during the relevant periodi.e. from April 2005 to March 2007. 9. Once the Appellant is not liable to pay Service Tax, they are also not entitled to avail cenvat credit of the amount collected in the name of Service Tax and is liable to be paid to the Government Exchequer. In this connection, we observe a similar issue had arisen before this bench in the case of Indu Easte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 11D. On an appeal by the Revenue, Hon ble High Court of Gujarat has reversed this decision - CCE, Ahmedabad-II v. Inductotherm India Pvt. Ltd. [2012 (283) E.L.T. 359 (Guj.)]. The questions of law framed by the Hon ble High Court were : (a) Whether, in the facts and in the circumstances of the case, the Tribunal is justified in holding that provision of Section 11D are not applicable in the instant case? (b) Whether, in the facts and in the circumstances of the case, the Tribunal is justified in holding that the amount deposited by the respondent by making a debit entry as Cenvat credit account amounts to payment of duty as required under Section 11D of the Central Excise Act, 1944? Both the above questions were answered in negative i.e., in favour of the department and against the assessee by the Hon ble High Court. Thus, the appellant has to deposit the amount collected from its clients under Sec. 73A(2) and cannot use Cenvat credit for the purpose. The amount already collected in cash gets adjusted against this amount and the appellant is liable to deposit the rest. 12 . As we have already held that the appellant is not entitled to take Cenvat credit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant portion section 11D is reproduced below. Section 11D. Duties of excise collected from the buyer to be deposited with the Central Government. - (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. (1A) Every person, who has collected any amount in excess of duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government. 11. In this connection, the reliance placed by the learned Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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