TMI Blog2024 (4) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Tribunal, Delhi in the case of MEHTA PLAST CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [ 2014 (5) TMI 1131 - CESTAT NEW DELHI] wherein it was held that the option to be exercised is not required to be exercised in writing and the very fact of payment of duty under the composition scheme reflects upon the option of the assessee - the appellant is eligible for availment of Composition Scheme for payment of service tax and hence the demand confirmed in the impugned order by denying the benefit is not sustainable - demand set aside. GTA service - HELD THAT:- The demand has been mechanically confirmed without verifying the documents submitted the appellant. The documents submitted by the appellant needs to be verified. The demand confirmed without verifying the documents is not sustainable. Accordingly, the demand confirmed in the impugned order on this count is set aside and the matter remanded to the adjudicating authority to verify the documents submitted by the appellant and determine the service tax liability, if any, after giving an opportunity to the appellant to explain their case. The appellant should also cooperate with the department and furnish al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to verify the documents submitted by the appellant and determine the eligibility of Cenvat credit after giving an opportunity to the appellant to explain their case. Suppression of facts or not - extended period of limitation - penalty - HELD THAT:- It is a settled position of law that when the matter involves interpretation of statutory provisions and the assessee acted on a bona fide belief, extended period of limitation cannot be invoked. We observe that there is no evidence available on record to invoke the extended period of limitation. Accordingly, the demand is not sustainable on the ground of limitation also. For the same reason, no penalty imposable on the appellant. Appeal disposed off. - SHRI ASHOK JINDAL, MEMBER (JUDICIAL) AND SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) Shri Pulak Kr. Saha, Chartered Accountant for the Appellant Shri S.S. Chattopadhyay, Authorized Representative for the Respondent ORDER The Appellant, M/s. Nitson Amitsu Pvt. Ltd, is a company, incorporated under the Companies Act, 1956, engaged in design, supply, fabrication and installation of aluminum doors, aluminum windows, aluminum composite panels, stainless steel cladding and hand rails, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kolkata demanding service tax under various categories, totally amounting to Rs. 1,55,18,638, including Cess. The notice also proposed reversal irregular Cenvat credit availed by the appellant amounting to Rs. 61,35,930/- (including cess) and an amount of Rs. 37,91,781/- under Rule 14 of the Cenvat Credit Rules, 2004. The notice was adjudicated by the Ld. Commissioner vide Order-in- Original No.128/COMMR/ST-II/KOL/2016-17 dated 24.02.2017 confirming the demands raised in the said SCN along with interest and penalty. Aggrieved against the impugned order, the appellant has filed this appeal. 6. In the impugned order, the demands of Service Tax has been confirmed under the following categories for which the present appeal has been filed by the appellant: Sl. No Demand Category Period Demand (in Rs.) Findings of the Dept. As per Dept. As per Appellant 1. Construction Service Works Contract Oct 2008 to March 2009 11,997,075/- Company started making payment of service tax under composition scheme even prior to intimating the Department. 2. Construction Service Construction Service 2009-10 to 2011-12 113,323/- Short payment of tax 3. GTA RCM 1,261,280/- 4. Works Contract Works Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Service Tax) Rules, 2007. Necessary intimation in this regard was also communicated to the Department on 25.01.2008 vide two letters dated NAP/RD/STA/01 and NAP/RD/STA/02 both dated 22.01.2008. However, such benefit of payment under the aforesaid Composition Scheme has been denied to them on the ground that they had started payment of service tax in respect of works contract referred in the said letter dated 22.01.2008 under composition scheme even prior to exercising such option and thus tax has been levied at the full rate. In this regard, the Appellant submits that ever since works contract service became subject to service tax w.e.f. 01.06.2007, they have been discharging service tax liability on the said service under the Composition Scheme . In the absence of any laid down procedure under the law for availing the composition scheme, the payment of service tax itself should be construed as exercise of the option by the Appellant when such option was continued by the Appellant till the related works contracts were completed. The appellant submits that the instant issue is squarely covered by the decision of the Tribunal, Delhi in the case of Mehta Plast Corporation v Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction service to Airports Authority of India in Jammu Kashmir and to Unitech Hi-Tech Structure Limited, an SEZ unit which are exempted service. As they have availed Cenvat credit on input services for the first time in 2008 09 and showed the same in the revised return submitted for the half year ended 31.03.2009, they were not aware of Rule 6 of the CCR, and no Cenvat credit was reversed at the time of availment of Cenvat credit. 7.3 In the impugned SCN it has nowhere been alleged that the Appellant has not reversed the credit attributable to rendering of exempted service. In the impugned order, the payment of eight/six percent of the value of exempted service has been confirmed primarily due to non-adherence with the condition and procedures laid down under Rule 6(3A) of CCR. In this regard, the appellant submits that they have reversed the CENVAT credit correctly as per the formula prescribed under Rule 6 (3A) of the CCR. The only deficiency which occurred inadvertently in respect of discharging liability for FY 2008-09 was that the credit was not reversed at the time of availment and for FY 2009-10 CENVAT credit was reversed proportionately at the end of the year instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all contracts considering it to be Other Works . Accordingly, they submit that the demand confirmed in the impugned order on this count is not sustainable. 7.5. Regarding the demand of Service Tax of Rs.1,13,323/- the appellant submits that this demand also pertaining to Works contract of glazing/cladding work executed for another contract. Accordingly, the submissions made against the demand of Rs.19,32,135/- for Original work is equally applicable for this demand also. Accordingly, they submit that these demands also pertaining to Original work and hence the demand is not sustainable. 7.6 Regarding reversal of Cenvat Credit amounting to Rs. 56,58,476/- disallowed in the impugned order, the appellant submits that Cenvat credit of service tax on various input services was availed by them during the period 2009 10 to 2012 13 on the basis of the documents prescribed under Rule 9(1) of the CCR and accordingly showed in the service tax returns submitted. At the time of audit, the officers did not take the pain to verify the voluminous invoices on the basis of which CENVAT credit of service tax was availed by them during the period 2009 10 to 2012 13. All invoices were produced for veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been denied to the Appellant on the ground that they had started payment of service tax in respect of works contract referred in the said letter dated 22.01.2008 under composition scheme even prior to exercising such option and thus service tax has been levied at the full rate. We observe that w.e.f. 01.06.2007, the appellant has been discharging service tax liability on the said service under the Composition Scheme . In the absence of any laid down procedure under the law specifying the time limit, we observe that the payment of service tax itself should be construed as exercise of the option by the Appellant when such option was continued by the Appellant till the related works contracts were completed. We observe that this issue is squarely covered by the decision of the Tribunal, Delhi in the case of Mehta Plast Corporation v Commissioner of Central Excise, Jaipur [2016 (44) S.T.R. 651 (Tri. - Del.)] wherein it was held that the option to be exercised is not required to be exercised in writing and the very fact of payment of duty under the composition scheme reflects upon the option of the assessee. By following the ratio of the decision of the Tribunal cited above, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in respect of input or input services which are used in or in relation to provision of exempted services. We also agree with the submission of the appellant that in any case the demand cannot go beyond the total common CENVAT Credit availed by the Appellant. In the present case, since the appellant has reversed the credit attributable to exempted services along with interest, we hold that the demand of an amount equivalent to 6/8% of the value of exempted services confirmed in the impugned order is not sustainable. This view has been taken by CESTAT, Hyderabad in the case of M/s. Aster Pvt. Ltd. v CC CE, Hyderabad III [2016 TIOL-1035-CESTATHYD]. In this case the Adjudicating authority contended that when the Appellant has not intimated in writing as to which option under Rule 6(3A) was exercised then the Appellant is bound to pay an amount calculated under Rule 6 (3)(i) of CCR. The Tribunal held that The said rule does not say that on failure to intimate, the manufacturer /service provider would lose his choice to avail second option of reversing the proportionate credit. Rule 6(3A), as seen expressly stated is nothing but a procedure contemplated for application of Rule 6(3). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valuation Rules. Rule 2A(i) of the said Rules prescribes the manner of charging service tax in respect of works contract service wherein the value of materials involved for execution of the works contract can be ascertained. Otherwise, the assessee has to follow Rule 2A (ii) of the Valuation Rules which is stated below: (ii) Where the value has not been determined under clause (i), the person liable to pay tax on the service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely: (A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent of the total amount charged for the works contract; (B) in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy per cent of the total amount charged for the works contract; (C) in case of other works contracts, not covered under sub-clauses (A) and (B), including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erification at the time of audit, but the audit officers did not take the pain to verify the voluminous invoices on the basis of which CENVAT credit of service tax was availed by the Appellant. The invoices were not checked by the audit team on the pretext that the documents are voluminous and will take lot of time and they have to conclude the audit within three days. The audit has concluded that the entire cenvat credit availed and utilised by the Appellant during the period 2009 10 to 2012 13 as irregular and the same has been confirmed in the impugned order. We observe that the demand has been mechanically confirmed without verifying the documents submitted the appellant. The documents submitted by the appellant needs to be verified. The demand confirmed without verifying the documents is not sustainable. Accordingly, we set aside the demand confirmed in the impugned order on this count and remand the matter to the adjudicating authority to verify the documents submitted by the appellant and determine the eligibility of Cenvat credit after giving an opportunity to the appellant to explain their case. The appellant should also cooperate with the department and furnish all the do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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