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TMI Blog2024 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... sold during the course of providing erection, commissioning or installation service. Since the towers are sold separately under a separate invoice and not during the course of providing the service, we find that the value of the tower need not be included. However, as the appellant had, undisputedly, availed CENVAT credit of input services, it cannot avail the benefit of the abatement under this exemption notification. The CBEC s Circular relied upon by the appellant does not carry its case any further as it was issued clarifying the scope of another exemption notification and it does not help the appellant s case - The appellant made an alternative claim that its service should be classified as works contract service under section 65(105)(zzzza) and it should be allowed to pay tax under Rule 2A (1) (ii) (A) of the Service tax (Determination of value) Rules, 2006 which the Commissioner had not considered. As the appellant s service was classified as erection, commissioning and installation service under section 65(105) (zzd) and it claimed exemption notification accordingly. The classification cannot change because the appellant s claim to an exemption notification was not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit is admissible. Invoking extended period of limitation and imposition of penalty under section 78 of the Finance Act, 1994 - HELD THAT:- Since the appellant had not disclosed the facts which were found from the appellant s own records when audited and investigated and since the appellant has been a long established company, the presumption of wilful suppression of facts was drawn in the impugned order. It is found that no legal basis for such a presumption. The appellant is only required to disclose such facts as are required in the ST-3 returns. If these returns require aggregate values of say, services rendered and service tax paid, there is no scope for the appellant to disclose more facts which to the department in its returns. The scheme of the service tax law is clear. The appellant is required to self-assess service tax, pay it and file returns. The central excise officer with whom the return is filed is required to scrutinize it. If no return is filed but the return is filed and the self assessment is not done correctly, the officer can make his best judgment assessment under section 72 and raise a demand. For this purpose, the officer can call for any records, et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice, Erection, Commissioning and Installation Service and Transportation of goods by road service and paid the tax and the demands were confirmed in the impugned order and the amounts paid by the appellant were appropriated towards them. 5. The issues which are before us to decide are as follows: a) Can the demand of Rs. 23,25,912/- as differential service tax on installation of towers by denying the benefit of abatement under notification no. 1/2006-ST dated 1.3.2006 be sustained along with equal amount of penalty under section 78? b) Can the demand of Rs. 6,34,710/- under Rule 6(3) being 6%/8% of the value of exempted services rendered in the state of Jammu and Kashmir, be sustained along with an equal amount of penalty under section 78? c) Can the denial of CENVAT credit of Rs. 13,45,364/- be sustained? d) Can the penalty of Rs. 25,97,566/- imposed in the impugned order on the appellant under section 78 (being equal to the amount of service tax not paid) be sustained? e) Was the extended period of limitation correctly invoked in the case? f) Can the penalty of Rs. 5,00,000/- imposed on the appellant under Rule 26(2) of the Central Excise Rules, 2002 be sust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input services provided by its sub-contractor. He relies on the CBEC s Circular No. 80/10/2004-ST dated 17.9.2004 in which it was clarified that the exemption under Notification No. 12/2003-ST would be available even if credit of input services is availed. 10. Learned authorised representative for the Revenue supported the impugned order on this question. He submitted that although two invoices were raised by the appellant separately for the value of the transmission towers and for their installation, they were part of the same contract indicating the values separately. While the sub-contractor provided only the services, the appellant, as the main contractor, provided both the towers and the service of installation. The exemption Notification No. 12/2003-ST is optional and conditional for the service of erection, commissioning or installation and the relevant parts of it read as follows: Effective rate of Service tax for specified services Percentage of abatements In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfying meal and the expression catering service shall be construed accordingly. [Notification No. 1/2006-S.T., dated 1-3-2006] [ emphasis supplied] 11. He submits that if the appellant wants to avail this optional exemption, it has to fulfill its conditions viz., the value of the goods which it sold must be included in the value and it cannot also take CENVAT credit on inputs, capital goods and input services. As the appellant had not met either of these conditions, it was not entitled to the benefit. The CBEC s Circular relied upon by the appellant clarified the scope of another exemption notification and it cannot apply to this notification. Therefore, the appellant is not entitled to the benefit of the exemption notification. 12. We have considered the submissions of both sides on this issue. As per Melange Developers relied upon by the appellant, both the main contractor and the sub-contractor have to pay service tax on the value of taxable services and the service tax paid by the sub-contractor can be taken as CENVAT credit of input service by the main contractor. The appellant has undisputedly, availed CENVAT credit on this input service. The proviso to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter extends to the whole of India except the State of Jammu and Kashmir. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. (3) It shall apply to taxable services provided on or after the commencement of this Chapter. 15. Undisputedly, since the charge of service tax did not apply to Jammu and Kashmir, no service tax was leviable on the services rendered in that State either by the appellant or by its sub-contractors. However, the sub-contractors of the appellant deposited an amount as service tax on such services erroneously and the appellant took credit of the amount so paid but it did not itself pay service tax on the services rendered in Jammu and Kashmir. The case of the Revenue is that the appellant had not maintained separate records of the inputs and input services used in the taxable services (rendered in rest of India) and exempted services (rendered in Jammu and Kashmir) and therefore, as per Rule 6(3) of CCR, it was required to pay an amount equal to 6% or 8% of the value of the exempted services. 16. The appellant s submission is that it had taken CENVAT credit of the service tax wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Input service bills were in the name of the registered or head office and not of the factory Rs. 1,28,471/- c) Invoices in the name of its Faridabad company but the address tampered with Rs. 3,24,931/- d) Invoices did not contain the Service Tax code of the service provider Rs. 1,70,097/- e) Original copies of the invoices were not available and credit taken on photocopies of invoices Rs. 4,19,457/- 20. Of the above, we have already held that CENVAT credit of an amount which is not service tax but erroneously deposited under mistake of law or fact is not service tax and credit of such an amount is not available under CCR. CENVAT credit on the invoices where the address of the head office or wrong address is mentioned cannot, in our considered view, be a ground to deny CENVAT credit. Where the service tax registration code is not mentioned in the invoices, the appellant claims to have cured this defect and therefore, we do not find that CENVAT credit can be denied. However, where the original copies of the invoices are not available, CENVAT credit cannot be allowed on the strength of photocopies because photocopies of invoices are not valid documents under R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to disclose such facts as are required in the ST-3 returns. If these returns require aggregate values of say, services rendered and service tax paid, there is no scope for the appellant to disclose more facts which to the department in its returns. The scheme of the service tax law is clear. The appellant is required to self-assess service tax, pay it and file returns. The central excise officer with whom the return is filed is required to scrutinize it. If no return is filed but the return is filed and the self assessment is not done correctly, the officer can make his best judgment assessment under section 72 and raise a demand. For this purpose, the officer can call for any records, etc. and the assessee is bound to provide them. Thus, the remedy against incorrect self assessment is best judgment assessment by the officer. For this reason, the demand can be raised within the normal period from the relevant date which, if a return is filed, is the date of filing of the return and if no return is filed, is the last date on which the return should have been filed. If the officer does not scrutinize the returns and raise the demand within time, the fault lies at his door s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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