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TMI Blog2022 (7) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... o be added later as an additional ground by a separate letter. In view of Section 36A of Central Excise Act, 1944 it is only when such document is tendered in evidence against the person who produced the same or from whose custody or control it was seized that the presumption under Section 36A is available - In the present case admittedly none of the alleged documents was produced by the Appellant or seized from the Appellant s premises or control. In view of the above, when the presumption under Section 36A is not available, the burden of proof is squarely on the Department to prove that the source documents related to the Appellants and that any taxable services under the source documents were actually provided by the Appellant. This burden has not been discharged by the revenue in the present case. In terms of Rule 2(1)(d) of Service tax Rules, 1994 and Circular No. 96/7/2007-ST dtd. 23.08.2007 and in terms of Circular No. 96/7/2007 -ST dtd. 23.08.2007 the service tax was liable to be paid by the Service recipient. Therefore, on the said activity of Appellant demand of service tax is not sustainable. The demand of service tax (except the amount of service tax payable as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1994 and Penalty of Rs. 20,000/- under Section 77, Penalty of Rs. 1,05,34,774/- under Section 78 of the Finance Act, 1994 also confirmed. Feeling aggrieved, the appellant filed an appeal before the Commissioner (Appeals) who by impugned order -in-appeal dated 18-10-2018 upheld the order passed by the Additional Commissioner and dismissed the appeal. Aggrieved by the impugned order-in-appealpresent Appeal has been filed. 3. Shri Jigar Shah, Learned Counsel along with Shri Ambarish Pandey appearing on behalf of the appellant submits that in the impugned order Ld. Appellate Authority has upheld the OIO in its entirety observing that the Appellant were engaged in providing financial consultancy service under business auxiliary service and management or business consultancy services'. Appellant received commission charges to the tune of Rs. 10,56,34,930/- from various customers but did not pay any service tax on the same, which comes to Rs. 1,05,34,774/-. However, they provided diverse services to various entities and department has classified them all as commission agent under the category of Business Auxiliary Service' and Management Consultancy Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnational Ltd. for power distribution channel allocation in order to obtain resources utilization. The services provided by the Appellant are related to the principal supply of electricity' and are thus, not liable to service tax. He placed reliance on the following decisions: Torrent Power Ltd Vs. Union of India 2019(1) TMI 1092-Guj High Court. Noida Power Co. Ltd. Vs. CCE, Noida 2014(33)STR383 (Tri. Del) kedar Construction Vs. CCE, Kolhapur 2015 (37) STR 631 (Tri. Bom) UP RajkiyaNirman Nigam Ltd. Vs. CCE, Meerut 2016(41)STR 967 (Tri. Del) Pashchimanchal Vidyut Vitran Nigam Ltd. 2012(28)STR 412 (Tri. Del) Purvanchal Vidyut Nigam Ltd. 2013(30) STR 259 (Tri- Del) Perfect Electricals Vs. CCE, 2018 (6) TMI 481 -CESTAT Bangalore 3.3 He also submits that impugned order wrongly confirmed the liability of service tax on the services provided to M/s Chaz Insurance Brokers Pvt. Ltd., which is a leading brokerage company which operates in various life insurance and general insurance products. In terms of Circular No. 59/8/2003-ST dated 20.06.2003 the services provided by insurance agent were covered under insurance agent' or insurance auxiliary service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the Finance Act, 1944, Section 66B provides for levy of Service tax on services other than those services specified in the negative list. Since the charging provision was not invoked, therefore, no demand is sustainable. He placed reliance on the decision in the case of Frisco Foods Pvt. Ltd. Vs. Commissioner, Customs Central Excise, Dehradun 2022-VIOL-49-CESTAT-Del-ST. 3.7 He argued that the show cause notice baldly alleged that the Appellant have rendered taxable services. However, the show cause notice does not analyse the activities allegedly carried out by the Appellants and whether the same would fall within the definition of any taxable services. It is settled principle of law that unless and until the clear analysis of the activity done by the assessee is carried out, demand of service tax cannot be confirmed. He placed reliance on the following decisions: United Telecom 2011(22) STR 571 (Tri. -Bang) Swapnil Asnodkar 2018 (10) GSTL 479 (Tri.- Mumbai) Balaji Enterprises 2020 (33) GSTL 97 (Tri. Del) ITC Ltd. 2014 (33) STR 67 (Tri. Del) Kafila Hospitality Travels Pvt. Ltd. Vs. Commissioner, Service tax, Delhi. 2021 (3) TMI 773-CESTAT New Delhi ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 (34) STR 21 (Del) 3.11 He submits that for the search proceedings, provisions of Code of Criminal Procedure, 1973 (2 of 1974) shall apply. The provisions of CrPC require that the Panchas ought to be the persons from the same locality who are respected and not dis-reputed. In the present case, the Panchas identified by the officials of the department were of a different locality. Thus, the entire search proceedings stands vitiated for want of proper procedure. 3.12 He also submits that it is a settled principle of law that in absence of corroborative evidence when the only relied upon document by the officers is disputed by the assessee, the assessee cannot be penalized for the same. He placed reliance on the following decisions: CCE Vs Ravishankar Industries Ltd. 2002 (150) ELT 1317 (Tri. Chennai) KashmitVanspati (P) Ltd. Vs. CCE 1989 (39) ELT 655 (Tribunal) Shabroc Chemicals Vs. CCE 2002 (149) T.G.L. Poshak Corporation Vs. CCE 2002(140) ELT 187 (Tri.- Chennai) Ruby Cholorates (P) Ltd. Vs CCE 2006 (204) ELT 607 (Tri. Chennai) Charminar Bottling Co. (P) Ltd. Vs. CCE, 2005 (192) ELT 1057 Nagubai Ammal Others Vs. B. Shama Rao, AIR 1956 SC 593 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai -Tri.). 4.4 He further argued that contention of the Ld. Counsel that Section 73A should have been invoked instead of Section 73 in this case is absolutely incorrect. Even if it is admitted that it is inadvertently made by mistake, it should not vitiate SCN. He placed reliance in the following decisions: Swami Communication Vs. Commr CGST, Kolhapur 2019 (27) GSTL 562 (Tri. Mumbai) Indus Integrated Information Mgmt Ltd. Vs. Pr. Commr of ST. Kolkata 2018 (14) GSTL 24 (Cal.) 4.5 He also submits that after the negative list concept, classification of service does not matter. It s only to be seen that the service do not fall under negative list (Sec. 66D) or under exemption Notification No. 25/2012- ST dated 20.06.2012, which is not the case here. Both the adjudicating authorities have not given any finding on the issues raised by the Appellant such as providing of exempted and non-taxable services. Debit note pasted in SCN along with form 26AS which show TDS deducted under Section 194H and 194J only. All the service recipient of the Appellant have admitted to have paid the service tax along with value of service. The appellant suppressed the material facts f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal and again before the third member when it was referred to the third member on a difference of opinion. Revenue had ample opportunity of dealing with the submission. Besides, it was submitted, that the issue was in any event being agitated in the matter of M/s. Coats Viyella (India) Ltd. and there was no question of taking the Revenue by surprise. We are of the view that the Tribunal did err in refusing to hear the appellant only on the ground that the ground had not been raised earlier. Rule 10 was sufficiently widely framed to allow the Tribunal to do so. Having regard to the fact that the Tribunal was itself considering the issue on a contested (sic connected) hearing there was no reason why the appellant should have been shut out from pleading its case on the same basis. In the matter of Utkarsh Corporate Service Vs. CCE, 2014 (34) STR (35) (Guj.) the Hon ble Gujarat High Court also held that additional legal grounds can be raised before any authority. The relevant para reproduced below: 11 . On the basis of the aforementioned discussion, we are of the firm opinion that both, Commissioner (Appeals) and the Tribunal have committed error in not considering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r law and such document is tendered by the prosecution in evidence against him or against him and any other person who is tried jointly with him, the Court shall, - (a) unless the contrary is proved by such person, presume - (i) the truth of the contents of such document; (ii) that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the Court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person s handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested; (b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence. In view of above Section 36A of Central Excise Act, 1944 it is only when such document is tendered in evidence against the person who produced the same or from whose custody or control it was seized that the presumption under Section 36A is available. In the present case admittedly none of the alleged documents was produced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be conclusive evidence to establish the guilt of the assessee. Burden of proof is on the Revenue and same is required to be discharged effectively. None of the persons on whose statement reliance was placed by the department were cross-examined. The Hon ble P H High Court in case of M/s. G-Tech Industries Ltd. v. Union of India [2016 (339) E.L.T. 209 P H] has held that Section 9D of the Act has to be construed strictly, as mandatory and not merely directory. The Hon'ble High Court in the matter of Jindal Drugs Pvt. Ltd. Vs. Union of India 2016 (340) E.L.T. 67 (P H) also held that : 19 . Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a Gazetted Central Excise Officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was necessary for the Department to point out how the activity of Appellant covered under the specific clause of services described in the Act. 5.7 In the case of Swapnil Asnodkar, 2018 (10) G..S.T.L. 479 (Tri. - Mumbai) supra a Division Bench of the Tribunal observed as follows :- 4. We have carefully considered the submission made by both sides. We find that though in the SCN the Respondent was made liable to pay Service Tax but as rightly held by the adjudicating authority, no specific clause of Section 65(19) defining Business Auxiliary service has been shown to be applicable to levy Service Tax. It is not appearing from the show cause notice as to what goods or services the Respondent has promoted or helped to promote. The Appellate Commissioner also on the same ground has held that the demand being vague is not enforceable against the Respondent. We do not find any reason to infer any different view than expressed by the lower authorities as without specifying the activity and the nature of service of the Respondent he cannot be taxed. Further out of the seven clauses under Section 65(19) no clause has been pointed out under which the Respondent is liable for Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax demand revenue also relies upon the TDS /26As Statement /3CD Statement. The said statement under provisions of Income Tax Act, 1961 is an Annual Consolidated tax statement. Income tax and servicetax are two different/ separate and independent special Act andtheir provisions are operating in two different fields. Therefore, byrelying the 26AS /TDS Statement / 3CD statement under the Service TaxAct, demand of service tax cannot be made. We also find the support from the decision of M/s Ved Security Vs. CCE, Ranchi -III 2019(6) TMI 383 CESTAT, Kolkata wherein it was held that the value of taxable services cannot be arrived at merely on the basis of the TDS statements filed by the clients inasmuch as even if the payments are not made by the client, the expenditure are booked based on which the form 26AS is filed, which cannot be considered as value of taxable services for the purpose of demand of Service tax. 5.11 In the matter of Synergy Audio Visual Workshop Pvt. Ltd. Vs. Commr. of S.T. Bangalore 2008 (10) S.T.R. 578 (Tri. - Bang.), the Tribunal observed as under: The other ground is for confirming demandsis that the appellants had shown certain amounts due from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various sections on the respondent. On appeal by the respondent, the learned Commissioner (Appeals) vide impugned order set aside the Order-in-Original and allowed the appeal. Aggrieved by this, Revenue is in appeal. 3. The main grounds of appeal is that respondent could not produce documentary evidence about Service Tax payment properly for the impugned period at Chandigarh and Lucknow. The ST-3 return filed at Chandigarh and Lucknow did not tally with income-tax return filed in Jaipur office. 4 . We have heard the AR who reiterated the grounds of appeal. None represented the respondent. 5 . We find that Commissioner (Appeals) examined the respondents appeal against confirmation of demand and allowed the same mainly on the ground that income-tax return cannot be the basis for demanding Service Tax. Further, the respondent‟s contention that they have rendered services outside the jurisdiction of Rajasthan and have discharged the Service Tax in Chandigarh and Lucknow, could have been verified with the concerned jurisdictional Chandigarh Commissionerate office. Departmental authority at Jaipur have no jurisdiction to proceed against the respondent for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Raj Ratan Castings Pvt. Ltd. v. CCE [2012 (25) S.T.R. 481 (T)], it was held that - Mutual fund distribution - Liability to pay Service Tax on commission - In terms of Rule 2(l)(d)(vi) of Service Tax Rules, 1994 such liability was on recipient of services, i.e., mutual fund company - If they did not pay it, liability was not transferred to mutual fund distributor. [paras 6, 7] [Emphasized]. 5.14 We also find that for theperiod post July 2012, the said activity of appellant were exempted vide Notification No. 25/2012-ST dtd. 20.06.2012. relevant entry of above notification reads as under. 29. Service by the following persons in respective capacities- (c) mutual fund agent to a mutual fund or asset management company; (d) distributor to a mutual fund or asset management company In view of above it is clear that the services of the Appellants were exempted. 5.15 The appellant had provided the maintenance service to M/s KEC International Ltd. The said activity of Appellant is directly related to the principal supply of transmission and distribution of electricity. We find that the sad service is also exempted in view of the following decisions reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head, (a) which provides most specific description, (b) in case of a composite service having combination of different taxable services, the service which give them their essential character and (c) in case the test of (a) and (b) does not resolve, the service which comes earlier in the clauses of Section 65, i.e. the service that was subjected to service tax earlier. Since Insurance services and C F Services are more specific description and were also subjected to service tax prior to imposition of tax on business auxiliary service, the insurance agents, C F agents working on commission basis would fall under those respective categories. From this, it follows that a particular service can be taxed only under one head of service. In view of above the activity of the appellant classified by the department under the head business auxiliary service is legally not correct 5.17 Further, we find that in terms of Rule 2(1)(d) of Service tax Rules, 1994 and Circular No. 96/7/2007-ST dtd. 23.08.2007 and in terms of Circular No. 96/7/2007 -ST dtd. 23.08.2007 the service tax was liable to be paid by the Service recipient. Therefore, on the said activity of Appellant demand of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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