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TMI Blog2023 (7) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... r beyond doubts that the consultant appellant had to visit the said site in non-taxable territory for providing the said services irrespective some consultation could be possible while being in his office situated in taxable territory. Hence, the findings of the Adjudicating Authority holding that the services provided by the appellant are in intangible in nature and have no relation to the immovable property of non-taxable territory are apparently wrong and, as such, are liable to be set aside. Taxable territory - HELD THAT:- The appellant as well as service recipient, though both have their Head Offices in taxable territory but the provision of service was outside the taxable territory i.e. in the State of J K. Hence the Department herein was not liable to charge the service tax qua the said provision of service. The adjudicating authority below is, therefore, held to have committed an error while rejecting the appeals. In the present case it is an admitted fact that the services provided by the appellants are towards the construction of a road meant for use by the general public - Thus the appellant is not liable to pay service tax for providing the Consulting Engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court in another decision in the case of ANAND NISHIKAWA CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT [ 2005 (9) TMI 331 - SUPREME COURT] has held that when the facts were known to both the parties omission by one to do what he might have done not that he must have done, would not render it suppression unless and until there is some positive act from the side of assessee, willful suppression cannot be alleged - Suppression cannot be alleged in such circumstance and thus extended period cannot be invoked for issuing show cause notice - Issue decided in favor of appellant. Appeal allowed. - DR. MS. RACHNA GUPTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri Abhishek Rastogi and Shri Manindre N. Verma, Advocates for the appellant. Shri Rajeev Kapoor, Authorized Representative for the Department ORDER Present order disposes of two appeals arising out of the same order-in-original bearing No. 003/102/16-17 dated 20 June 2017. The said order has adjudicated two separate show cause notices as were served upon the appellants. The extended period of limitation has been invoked by the Department while issuing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not entitled for availing exemption rather was liable to discharge the service tax liability. 4. The Department, from the scrutiny of documents, also found the difference in the value shown for the services rendered by the appellants in balance sheets vis- -vis ST-3 returns during the period from financial year 2010-2011 to 2013-2014. The availment of Cenvat credit was also observed to be availed on the strength of such invoices, which were not issued to the registered premises of the appellants. Resultantly the two show cause notices, as tabled above, were served upon the appellant proposing the respected recoveries, as mentioned in the said table to be recovered from the appellants along with the interest and the appropriate penalties. The said proposal has been confirmed by the order under challenge, except for an amount as mentioned in the table above. 5. We have heard Shri Abhishek Rastogi and Shri Manindre N. Verma, learned counsel for the appellant and Shri Rajeev Kapoor, learned Authorized Representative for the Department. 6. Learned counsel for the appellant has mentioned that service tax was not paid by the appellants on two grounds : Service was provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority and it has rightly been held that those agreements reveal that the work undertaken by the appellant was never required to be undertaken at the site of the client. Hence there is no error committed while the services of providing Engineering Consultation are held to be those as rendered in taxable services which are intangible nature. From the invoices, it was rightly observed that addresses of the business establishment of the appellant as well as of their referred service recipient were also found existing in the taxable territory and those recipients were found registered with the service tax department on such addresses which are in taxable territory. Hence, there is no infirmity when the services of Consulting Engineering Services (CES) are denied to have been rendered in the State of Jammu Kashmir. Hence the plea of exemption as raised by the appellant has rightly been denied. Impressing upon no infirmity in the order, both the Appeals are prayed to be dismissed. 9. After hearing both the parties at length, pursuing the documents on record the order under challenge, we observe that the questions to be decided by us are as follows : (i) Whether the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e all the roles, as discussed above, some specific scope of work, as observed from the said agreement is as follows :- 3.1 (ii) review, inspection and monitoring of Construction Works as set forth in Paragraph 5; 5.3 The Independent Engineer shall inspect the Construction Works and the Project Highway once every month, preferably after receipt of the monthly progress report from the Concessionaire, but before the 20th (twentieth) day of each month in any case, and make out a report of such inspection (the Inspection Report ) setting forth an overview of the status, progress, quality and safety of construction, including the work methodology adopted, the materials used and their sources; and conformity of Construction Works with the Scope of the Project and the Specifications and Standards. 5.4 The Independent Engineer may inspect the Project Highway more than once in a month if any lapses, defects or deficiencies require such inspections. 5.5 For determining that the Construction Works conform to Specifications and Standards, the Independent Engineer shall require the Concessionaire to carry out, or cause to be carried out, tests on a sample tests, to be specified b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 64 of the Act speaks about the extent, commencement and application of this Chapter and according to this provision : Chapter V of the Act extends to the whole of India except the State of Jammu and Kashmir. It becomes clear from these two provisions that State of J K, is not within the taxable territory of India. Now for further adjudication, definition of services as mentioned in Section 65 (45) of the Finance Act, 1994 acquires relevant. According to which : service means any activity carried out by a person for another for consideration and includes a declared service . The definition excludes certain transactions not to be classified as service as mentioned in sub-clause (a) to sub-clause (c) with the respective Explanations No. 1, 2 and 3. Explanation 3 (b) is relevant for the present controversy which reads as follows : 3 (b) An establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct persons. Explanation 4 further clarifies that a person carrying on a business through a branch or agency or representational office in any territory shall be treated as havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, we hold that the appellant as well as service recipient, though both have their Head Offices in taxable territory but the provision of service was outside the taxable territory i.e. in the State of J K. Hence the Department herein was not liable to charge the service tax qua the said provision of service. The adjudicating authority below is, therefore, held to have committed an error while rejecting the appeals . 16. We further observe that a service Circular bearing Notice No. 14/2004 dated 28.04.2004 has clarified about the applicability of service tax where service provider are located at the outside State of J K but have rendered services in the State of J K. We observe that it has been clarified that the service tax is not applicable to the services provided in the State of J K irrespective of the service provider being from the said State or otherwise. We also observe that even Mega Notification No. 25/2012 dated 20 June, 2012, as impressed upon by the learned counsel for the appellant, also comes to the rescue of the appellant as the said notification exempts certain services from the whole of service tax leviable thereupon. In case of the services in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decided in favour of the appellant. Second question for adjudication : We observe that there is no denial to the fact that the appellants have availed the Cenvat credit on the basis of invoices. However, the reason for denying the availment is that the address mentioned on these invoices was not the registered premises of the appellant. Hence, the invoice was the improper documents in terms of Cenvat Credit Rules, 2004. We find that the relevant provision for the purpose of Rule 9 of Cenvat Credit Rules, 2004, which reads as follows : RULE 9. Documents and accounts. (1) The CENVAT credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :- (a) an invoice issued by - (i) [a manufacturer or a service provider for clearance of -] (I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer; (II) inputs or capital goods as such; (iv) an importer; (iii) an importer from hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the service recipient as the person liable to pay service tax; or] (f) an invoice, a bill or challan issued by a provider of input service on or after the 10th day of September, 2004; or [(fa) a Service Tax Certificate for Transportation of goods by Rail issued by the Indian Railways; or] (g) an invoice, bill or challan issued by an input service distributor under Rule 4A of the Service Tax Rules, 1994 : [Provided that the credit of additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be allowed if the invoice or the supplementary invoice, as the case may be, bears an indication to the effect that no credit of the said additional duty shall be admissible.] [(2) No CENVAT credit under sub-rule (1) shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are contained in the said document : Provided that if the said document does not contain all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service, [assessable value, Central Excise or Service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have been detected. We, however, are of the opinion once admittedly the returns were filed regularly by the appellant the Department cannot alleged suppression against the appellant/assessee. It is mandatory for them to bring on record a positive act of the to prove the alleged suppression that too with an intent to evade tax. He relied upon the judgment of Hon ble Apex Court in the case of Continental Foundation Jt. Venture versus Commissioner of Central Excise, Chandigarh reported as 2007 (216) E.L.T. 177 (S.C.) . Once it is not the case of suppression with an intent to evade tax and once the appellant is held not liable to pay the service tax in the given facts and circumstances, the department was not entitled to invoke the extended period of limitation. The question of imposition of penalty upon the appellants also does not at all arise. 21. The Hon ble Supreme Court in another decision in the case of Anand Nishikawa Co. Ltd. versus Commissioner of Central Excise, Meerut [2005 (188) E.L.T. 149 (S.C.)] has held that when the facts were known to both the parties omission by one to do what he might have done not that he must have done, would not render it suppre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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