9911796707
TMI Blog2024 (1) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... urities 9,60,92,082 u/s 78 100% penalty 0 9,60,92,082 Delayed payment of service tax u/s 76 Total Demand 10,04,22,654 5,69,734 9,98,52,920 3. Regarding disallowance of CENVAT credit of service tax amounting to Rs. 15,95,552/-, the appellant submits that this credit is related to service tax paid for the residential telephones provided to its employees. The Appellant submits that the definition of 'input service', relevant for the material period, has two parts. The first part uses the word 'means' while the second part uses the word 'includes'. The first part of the definition defines 'input service' as any service used by a provider of taxable service for providing an output service. With the use of the word 'means', this part of the definition has to be interpreted in a restrictive manner which means that there should be a direct nexus between 'input service' and provision of 'output service'. The legislation has consciously used the word 'and includes' in the second part of the definition thereby expanding the meaning of 'input service' beyond the restrictive first part. Therefore, this part should be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - CESTAT Mumbai]; vii. Mohan Aluminium Pvt. Ltd. vs. Commissioner of Central Excise, Customs and Service Tax, Bangalore I [ 2017 (8) TMI 541 - CESTAT Bangalore]; viii. Vishal Pipes Ltd. vs. Commissioner of Central Excise Noida [2015 (5) TMI 1008 - CESTAT New Delhi] 5. Accordingly, the Appellant submits that the service tax paid with regard to telephones installed at the residence of the executives of the bank for official purposes, being an activity related to business, is eligible for Cenavt credit. 6. Regarding the demand of Rs. 21,65,286/- confirmed in the impugned order, the Appellant submits that this demand can be divided into two parts, Rs. 15,95,552/- and Rs. 5,69,734/-. The department has considered the Cenvat credit availed on residential telephone provided to employees amounting to Rs. 15,95,552/- as irregular credit. Thus, the service tax paid by the Appellant by utilizing this credit has been considered as non payment by the department. Once this credit is considered as eligible, the payment of service tax by utilizing this credit automatically becomes appropriate payment and the demand confirmed on this count would be liable to be set aside. Regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. 10. They also submit that the penalty under Section 76 of the Finance Act, 1994 is not imposable. The Appellant submits that penalty under Section 76 can be imposed in a situation when the service tax was not paid or short paid. In the instant case, the Appellant admitted the short payment in certain occasions and immediately deposited the same with applicable interest. As the delay in payments were unintentional and the Appellant always paid the service tax voluntarily with interest acting with bonafide belief, penalty imposed under Section 76 is not justified. Therefore, they prayed for setting aside the penalty imposed under Section 76 by invoking the Section 80 of the Finance Act, 1994. The Appellant further submitted that penalty under Section 78 of the Finance Act, 1994 can be imposed only under the exceptional circumstances marked by fraud, collusion, willful misstatement, suppression of facts, contravention of any of the provisions of the Act or Rules, made there under with the intent to evade payment of service tax. As none of the said conditions justifying the imposition of penalty under Section 78 exists in the instant case, and hence imposing penalty un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above, we hold that the appellant is eligible for the Cenvat Credit of service tax paid on telephone bills in respect of the telephones installed at the residence of employees. Accordingly, we set aside the demand of Rs. 15,95,552/- confirmed in the impugned order. 15. Regarding the demand of Rs. 21,65,286/- confirmed in the impugned order, we find that that this demand has two parts, Rs. 15,95,552/- and Rs. 5,69,734/-. The Appellant has availed and utilized the Cenvat credit of Rs.15,95,552/- availed on residential telephone provided to employees. The department considered this credit amounting to Rs. 15,95,552/- as irregular credit. Thus, in the impugned order, the service tax paid by the Appellant by utilizing this credit has been considered as non payment and the demand has been confirmed. However, as discussed in paras 13 and 14 supra, this credit has been held as eligible. Thus, the payment of service tax by utilizing this credit automatically becomes appropriate payment and the demand confirmed on this count is not sustainable and liable to be set aside. 16. Regarding the balance demand of Rs. 5,69,734/- confirmed as a part of Rs. 21,65,286/-, we find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 76 of the Finance Act, 1994, we observe that penalty under this Section can be imposed when the service tax was not paid or short paid. In the instant case, we find that the Appellant has short paid service tax on certain occasions and immediately deposited the same with applicable interest. As the delay in payments were unintentional and the Appellant always paid the service tax voluntarily with interest acting with bonafide belief, we hold that penalty imposed under Section 76 on this count is not justified. Thus, we find it is a fit case for invoking Section 80 of the Finance Act 1994 to waive the penalty. Therefore, we set aside the penalty imposed under Section 76 in the impugned order by invoking the provisions of Section 80 of the Finance Act, 1994. 20. Regarding the penalty imposed under section 78 of the Finance Act, 1994, we observe that penalty under this Section can be imposed only under exceptional circumstances marked by fraud, collusion, willful misstatement, suppression of facts, contravention of any of the provisions of the Act or Rules, made there under with the intent to evade payment of service tax. As none of the said conditions justifying the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
