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TMI Blog2024 (1) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... vices rendered to mutual fund operators, which has already paid by the Appellant - HELD THAT:- The Appellant could not produce any evidence regarding the payment of interest for the delay in payment of this amount. Accordingly, out of the demand of Rs.21,65,286/-, the demand of Rs.15,95,552/- is set aside and the confirmation of the demand of Rs.5,69,734/- is upheld. The matter is remanded back to the adjudicating authority for the limited purpose of payment of interest for the delay in payment of this amount of service tax of Rs.5,69,734/. Demand of service tax (including Education Cess and Secondary and Higher Education Cess) of Rs. 9,60,92,082/- under Banking and other Financial Services - HELD THAT:- As a part of its normal banking activities, the Appellant invests in various government securities. Such investments in government securities are undertaken to comply with the requirements of maintaining the CRR and SLR as per the directives of Reserve Bank of India (RBI) issued from time to time. On several occasions, the Appellant purchases and sells these securities at cum-interest price. Thus, it is found that the Appellant pays and receives interest at the time of purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. The Appellant submits that impugned order has confirmed the following demands along with interest and penalty. Particulars Demand Penalty Admitted and paid Disputed Demand of tax Irregular availment of Cenvat credit 21,65,286 u/s 78 100% penalty 5,69,734 15,95,552 Non-payment of service tax 21,65,286 0 0 21,65,286 Non-payment of service tax on interest on sale of Government and other securities 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 appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as allowed the Cenvat Credit on telephone bills in respect of the telephones which were installed at the residence of employees. 4. In addition, the Appellant also placed their on the following judgements in support of their claim: i. JSW Ispat Steel Limited vs. Commissioner of Central Excise [2014 (2) TMI 776 CESTAT Mumbai]; ii. M/s. SAIL (Alloy Steel Plant) vs. Commissioner of Central Excise S.Tax, Bolpur [2015 (11) TMI 971 CESTAT Kolkata] iii. Gateway Terminals (I) Pvt. Ltd. vs. Commissioner of C.Ex. Raigad [2015 (10) TMI 1300 CESTAT Mumbai]; iv. Keltech Energies Limited vs. Commissioner of C.Ex. Mangalore [2008 (1) TMI 96 CESTAT Bangalore]; v. M/s. BASP Industries vs. Commissioner of C.Ex. Mumbai III [2011 (6) TMI 389 CESTAT Mumbai]; vi. M/s. Stock Holding Corporation of India Ltd. vs Commissioner of C.Ex. Mumbai II [2015 (6) TMI 826 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est income has been received for the investments made by them and it was not received towards rendering of any taxable services. Accordingly, they submitted that the demand confirmed on this count is not sustainable. 8. The Appellant submits that appropriation of Rs. 4,67,42,500/- against the aforesaid demand in the impugned order is not justified as this payment has no relation with the demands confirmed in the impugned order. 9. The Appellant submits that extended period of limitation cannot be invoked as there was no fraud, collusion or any willful misstatement or suppression of facts or contravention of the provisions under the Acts or rules made there under with an intent to evade payment of service tax is established in this case. They also submit that interest charged under Section 75 of the Finance Act 1994 in respect of the demands confirmed in the impugned order is not tenable under law. 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 sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business activity of the appellant, whether it is manufacturing or rendering service, has to be treated as input service coming within the purview of Rule 2(I) of the CENVAT Credit Rules, 2004. Undisputedly, in this case, the telephone service and air travel services have been availed by the appellants in the course of business activity as a manufacturer of excisable goods. Therefore, the issue is no more res integra. Accordingly, I set aside the impugned order and allow the appeal with consequential relief, if any. We allow the cenvat credit to the appellant on telephone service in question. 14. We observe that as per the definition of 'input services' during the material period, all activities relating to business should qualify as input service within its ambit. Thus, by relying on the definition of 'input services' and the decision of the Tribunal Kolkata referred 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in purchases and sales of Govt. securities which is purely an investment activity. Accordingly, we hold that no service tax can be levied on interest income pertaining to investment made in Govt. securities and the demand confirmed in the impugned order on this count is liable to be set aside and accordingly we do the same. 18. The Appellant submits that appropriation of Rs. 4,67,42,500/- against the aforesaid demand of Rs. 9,60,92,082/- confirmed in the impugned order is not justified as this payment has no relation with the demands confirmed in the impugned order. We find that as discussed in para 17 supra, the demand itself has been held as not sustainable. Hence, the question of appropriation, if any, does not arise. Accordingly, the Appellant would be eligible for the consequential benefit of appropriation made against the said demand. 19. Regarding the penalty imposed under Section 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 inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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