9911796707
TMI Blog2023 (11) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... However, in the Order-in-Original abatement has been allowed to the extent of Rs.88,93,618/- resulting in confirmation of the demand of Rs.4,38,694.72. However, if the abatement claim as claimed by the party and verified by the officers is allowed. The net demand which is made on this account cannot survive and the same needs to be set aside - Demand set aside. Service tax on services provided by appellant as sub-contractor prior to Sep 2004, on which service tax liability has been discharged by the contractor - HELD THAT:- Officers have found that this amount is recoverable and appellants have contested the demand relying upon the decision of Larger Bench of this Tribunal in the M/s Melange Developers Pvt. Ltd. [ 2019 (6) TMI 518 - CESTAT NEW DELHI-LB] wherein the Larger Bench of this Tribunal has held that in the absence of any exemption granted subcontractor is required to discharge the tax liability, the service recipient i.e. the main contractor can avail the benefit of Cenvat credit. Accordingly, it is the view that has been canvassed by the department in the matter - In the verification report officers have referred to Master Circular No.96/7/2007 dated 23.08.2007 wherein si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In absence of the same the charge of suppression during the material period has to be upheld that being so invocation of extended period in the present case is justified and upheld - As the demand upheld only to the extent of Rs.5,04,247.52 + Rs.3,95,994/- = Rs 9,00,241.52/- the penalty imposed under Rule 15 of CENVAT Credit Rules,2004 read with Section 78 of the Finance Act,1994 is reduced to that extent. Interest - HELD THAT:- In respect of the amounts confirmed the demand for interest under Section 75 is upheld. Appeal allowed in part. - HON BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) AND HON BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) APPEARANCE: Shri Nishant Mishra, Advocate Ms Vedika Nath, Advocate for the Appellant Shri Manish Raj, Authorised Representative for the Respondent SANJIV SRIVASTAVA: This appeal is directed against Order-in-Original No.73/Commissioner/LKO/ST/2009 dated 30/11/2009 passed by Commissioner of Customs, Central Excise Service Tax, Lucknow. By the impugned order following has been held:- ORDER In view of the facts and circumstances of the case and discussions and findings supra, I pass the following order 1. I confirm the demand of service tax amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant on 11.02.2004 for ST-3 returns pertaining to the period from April, 2002 to September, 2002, October2002 to March2003 and April 2003 to September 2003. The returns were cleared for the period from April, 2002 to September, 2002 were submitted by the appellant on 11.02.2004 against the due date on 25.10.2002. Thus, extended period has been invoked for making the demand in respect of the period from April, 2002 towards the date of filing of return. 2.3 Revenue was of the view that appellant has short paid the service tax under the provisions of Section 66, 67, 68 70 of the Act read with Rule 6 and 7 during the period April, 2002 to March, 2008. They have short paid service tax amounting to Rs.35,19,222.00 + Cess. Rs.80,534.00 + Higher Ed. Cess Rs.30,136.00 amounting in aggregate to Rs.36,29,893.00. This amount though short paid was to be recovered from them by making the demand in terms of Section 73 (1) of the Finance Act, 1994 alongwith applicable interest as per Section 75 of the Act and appellant was also liable for penalty under Section 77 of the Act. 2.4 Further, scrutiny of ST-3 returns for the period from 2002- 03 to 2007-08 it was revealed that appellant have tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the respondent. 3.2 Arguing for the appellant learned Counsel submits that- Extended period of limitation cannot be invoked for making this demand and relies upon the decision in the case of Commissioner of Central Excise and Customs, Surat Vs Sun Pharmaceuticals Industries Ltd. and Others 2020 (10) SCC 583. On merit also the demand is not sustainable. Breakup of the demand is made as indicated bellow:- A Full benefit of abatement to the extent of 85%, in terms of Circular No. 341/43/96- TRU dated 31.10.1996 not provided in Order-in-Original Rs 4,38,694.92/- B Demand of service tax on services provided by appellant as sub-contractor prior to Sep 2004, on which service tax liability has been discharged by the contractor Rs 5,04,247.52/- C Non-consideration of payment of service tax through CENVAT while calculating amount of service tax paid Rs 3,52,356/- D Application of rate of tax on the date of provision of services Rs 2,66,019/- E Grossing up of taxable amount due to inadvertent mentioning of service tax with taxable value of services in some returns Rs.14,65,840.40/- Rs 30,27,159/- In the report submitted by the officers for resolving discrepancies following observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, the credit has been sought to be denied on the ground that the invoices against which the credit has been taken does not contain minimum information as required under Rule 4(A) or 9 (2) of the Rules. Appellant has submitted a detailed chart containing all the details with registration details of supplier of the supplier of input services that being so this demand cannot be sustained. As the demand itself is not sustainable the demand for interest also fails and penalty imposed cannot be sustained. 3.3 Arguing for the revenue learned Authorized Representative reiterates the findings recorded in the impugned order and the Order-in-Original. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For confirming the demand against the appellant, Adjudicating Authority has recorded the following findings:- The Revenue's contention in light of Department's instruction letter No. 341/43/96-TRU dt. 31.10.96 that the liability for payment of service tax has to be borne by the advertising agency on the amount not received is not relevant after amendment to Rule 6 of Service Tax Rules, w.e.f. 16.10.98 which reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 266 April 03 to Sept 03 3157761 203475 203474* 203474 Oct 03 to Mar 04 10309589 706072 10309589 706072 April 04 to Sept 04 17717770 1381197 17717770 1293591 Oct 04 to Mar 05 22666564 2022442 22666564 1757692 April 05 to Sept 05 23585537 2098166 23585537 2098166 Oct 05 to Mar 06 30534804 2665234 30534804 2665245 April 06 to Sept 06 26387422 2295020 30634827 2934213 4257405 Oct 06 to Mar 07 34027892 3967445 36401545 4125742 2373653 April 07 to Sept 07 37435126 4175441 38038791 4175435 603825 Oct 07 to Mar 08 40572816 4447282 41404955 4447282 857222 Total 263706305 24319035 251294382 24764172 8092105 Looking in to the table above, it is clear that since the amount shown as realized and the amount of service tax paid as shown in the ST - 3 for half yearly periods from April 02 to Sept. 03 are one and the same, it is abundantly clear that the realized amount has not been shown correctly by the Noticee in their ST - 3 returns as the amount of service tax paid in any case cannot be equal to the amount realized for the respective half yearly period. The rate of service tax during the relevant period is 5% and later 8% w.e.f. 14.05.2003. Hence, in respect of the said half yearly periods, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other ground for seeking relief is deduction claimed on print media which are liable for exemption as per reference code 004.01/23.08.07 of Circular No. 96/7/2007-ST dt. 28.08.07. According to them the amount payable to print media shall not be included in the value of taxable services and only the commission received by advertising shall be liable to tax. This has also been clarified by the Board under Circular No. 341/43/96- TRU dated 31.10.96 and letter No. 332/4/2008 dt. 05.05.08. Hence they would be entitled for deduction in value on this account, and therefore they would be entitled for the benefit to the extent of the evidences furnished by them in this regard. In this connection a report was called from the jurisdictional Assistant Commissioner, Central Excise Division-I, Lucknow vide his letter C.No. 5-STC/EA-2000/Lko-1/06. According to him the facts on record as submitted by the Noticee, reveal the following: (i) The amount where service tax liability has been discharged by the principal contractor : Rs.8,42,740.00 (ii) The amount where services have been Rendered to the print media : Rs 23,69,654,00 As regards (i), the issue has already been discussed above and in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax payable S Tax paid Short Payment April 02 to Sept 02 5526082 0 5526082 276304 134994 141310 Oct 02 to Mar 03 11784942 0 11784942 589247 222266 367021 April 03 to Sept 03 3157761 12806 3144955 251596 203474 48122 Oct 03 to Mar 04 10309589 80120 10229469 818358 706072 112286 April 04 to Sept 04 17717770 210032 17507738 1400619 1293591 107028 Oct 04 to Mar 05 22666564 41055 22625509 2307802 1757692 550110 April 05 to Sept 05 23585537 0 23585537 2405725 2098166 307559 Oct 05 to Mar 06 30534804 467500 30067304 3066865 2665245 401620 April 06 to Sept 06 30634827 4247405 26387422 2933335 2934213 -878 Oct 06 to Mar 07 36401545 2373653 34027892 4125790 4125762 28 April 07 to Sept 07 38038791 603825 37434966 4618182 4175435 442747 Oct 07 to Mar 08 41404955 857222 40547733 5003839 4447282 556557 Total 271763167 8893618 262869549 26839130 24764192 3033510 As regards the noticee's objection that they have not been provided the basis of computation of service tax, the same is not acceptable as Annexure A-I to the notice is self explanatory, in which short payment has been calculated. This contain complete details such as respective period, amount of taxable value, rate applicable, ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 891598.00 80120 66335.03 64942.03 April 04 to Sept 04 280754.15 280754.15 210032 5657.77 5657.77 Oct 04 to Mar 05 486060.60 486060.60 41055 45390.57 45390.57 April 05 to Sept 05 1221990.06 1221990.06 0 124642.99 124642.99 Oct 05 to Mar 06 1739749.40 1739749.40 467500 129769.44 129769.44 April 06 to Sept 06 4240615.15 4240615.15 4247405 -755.03 -755.03 Oct 06 to Mar 07 2373674.55 2373674.55 2373653 -0.66 -0.66 April 07 to Sept 07 594798.55 594798.55 603825 -1113.86 -1113.86 Oct 07 to Mar 08 841704.85 841704.85 857222 -1914.82 -1914.82 Total 14020962.21 14003252.31 8893618 440087.72 438694.72 In this regard it shall be important to point cut that abatement on print media is admissible to the extent of 85% as per circular No.341/43/96-TRU dt. 31.10.1996 in the instant case the Hon'ble Commissioner has allowed abatement for the period April 2003 to September 2005 in respect of those invoices which were submitted by the appellants as sample invoice of print media vide their letter dt. 30.11.2009 addressed to Superintendent Service Tax Group-III, in connection with instant show cause notice. It is found that they have shown their abatement value with their ST-3 returns w.e.f. half ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess tax demand of Rs. 14,65,040. The party's contention that the details of these calculation mistake due to clubbing of service tax with value of taxable service realized was already communicated by them to the various authorities vide their letter dt. 25.08.2008, 29.11.2008 and 20.12.2009 is not fully correct as vide letter dt. 02.12.2009 they have merely pointed out that the amount of Service Tax as shown in service tax returns is correctly mentioned and all the amount realized as service tax was correctly paid by them. However, the mistake in mentioning of taxable value of Service Tax is due to clerical error- and without any intention to evade tax thereon, which is non-intentional and due to ignorance as necessary explanations were filed with the department as soon as the mistake was traced by them. However; the party had not quantified the value of twice valuation due to clubbing of service tax with the taxable value in their representation dt. 02.12.2009. There is no reference of this issue in their any other letter/representation including letter dt 25.08.2008 and 29.11.2008 this issue has cropped up after passing of this OIO by the Commissioner. The half-yearly retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding disallowing of cenvat credit in o-in-o the party's contention that no evidence has been placed by the department, a list of such credits actually utilized monthwise by the party is enclosed as Annexure -A. This fulfills the requirement of the appellants as given in para 6 of their letter dt. 08.12.2010. 4.4 From the above, it is evident that the revenue authorities have acknowledge that revenue agrees that the abatement as claimed by the party i.e. Rs.14,02,0962.21 is correct. However, in the Order-in-Original abatement has been allowed to the extent of Rs.88,93,618/- resulting in confirmation of the demand of Rs.4,38,694.72. However, if the abatement claim as claimed by the party and verified by the officers is allowed. The net demand which is made on this account cannot survive and the same needs to be set aside, we do so. 4.5 On the issue with regards to the payment of service tax by the sub-contractor, when the main contractor has paid the entire tax liability the demand of Rs.5,04,247.52 has been confirmed. Officers have found that this amount is recoverable and appellants have contested the demand relying upon the decision of Larger Bench of this Tribunal in the M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ............ Further the learned advocate also submits that in the Master Circular issued by the Board vide Circular No. 96/7/2007-S.T., dated 23-8-2007, a stand has been taken that there is no exemption to a sub-contractor from payment of service tax merely because the contractor pays the tax. However, he submits that for the period circular issued late by the Board in 1997 was applicable and according to this Circular where the services have been provided by the sub-contractors such sub-contractors are not liable to pay service tax and service tax liability is on the main contractor. Taking note of the fact of the contention that main contractor has paid the service tax and charging service tax on the sub-contractor again would amount to taxing the same service twice and also taking note of the circular cited by the learned advocate and the decisions of the Tribunal cited, I find that if the appellant is required to pay the service tax it would amount to taxing the same service twice and the circular and the Tribunal s decision are squarely applicable to the facts of this case and accordingly appeal is allowed with consequential relief to the appellant. 18. In BCC Developers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would, therefore, not be correct to conclude that double taxation would result if a sub-contractor is required to discharge the Service Tax liability even if the main contractor has discharged the tax liability. 22. The decisions of the Tribunal holding that double taxation will not result if a sub-contractor discharges the tax liability because of the Cenvat Rules, now need to be referred to. 23. In Max Tech Oil Gas Services Pvt. Ltd. v. Commissioner of Service Tax, Delhi, reported in 2017 (52) S.T.R. 508 (Tri. - Del.), the Division Bench has held : 6. Regarding the contention of the appellant that they have acted only as a sub-contractor and demanding service tax from them will amount to double taxation as the main contractor also is rendering similar service to ONGC, we find no legal basis for the contention of the appellant. The service tax leviable at the hands of each service provider is decided by nature of activities undertaken by them. If the same is covered by scope of the taxable entry under Finance Act, 1994 tax liability arises. The said service becomes part of final service rendered by main contractor is of no consequence to determine the tax liability of each and eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltiple taxation legislation. In absence of any statutory provision to the contrary, providing of service being event of levy, self same service provided shall not be doubly taxable. If Service tax is paid by a sub-broker in respect of same taxable service provided by the stock-broker, the stock broker is entitled to the credit of the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same. In other words, if the main stock broker is subjected to levy of service tax on the self same taxable service provided by sub-broker to the stock broker and the sub-broker has paid service tax on such service, the stock broker shall be entitled to the credit of service tax. Such a proposition finds support from the basic rule of Cenvat credit and service of a sub-broker may be input service provided for a stock-broker if there is integrity between the services. Therefore, tax paid by a sub-broker may not be denied to be set off against ultimate service tax liability of the stock broker if the stock broker is made liable to service tax for the self same transaction. Such set off depends on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax credit on deemed sales in levy of VAT. 29. The submission of the Learned Counsel for the Respondent regarding revenue neutrality cannot also be accepted in view of the specific provisions of Section 66 and 68 of the Act. A subcontractor has to discharge the Service Tax liability when he renders taxable service. The contractor can, as noticed above, take credit in the manner provided for in the Cenvat Credit Rules of 2004. 30. Thus, for all the reasons stated above, it is not possible to accept the contention of the Learned Counsel for the Respondent that a sub-contractor is not required to discharge Service Tax liability if the main contractor has discharged liability on the work assigned to the subcontractor. All decisions, including those referred to in this order, taking a contrary view stand overruled. 4.6 The submissions made by the appellant relying on this decision cannot be upheld as he argues contrary to what have been stated in the said decision. Appellant had relied upon the decision in the case of Vinodh Shipping Services (supra) to argue that the issue was of interpretational and there were conflicting views taken by the different fora. We are not in a position to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Demand as per OIO Demand Upheld A Full benefit of abatement to the extent of 85%, in terms of Circular No. 341/43/96-TRU dated 31.10.1996 not provided in Order-in-Original Rs 4,38,694.92/- 0 B Demand of service tax on services provided by appellant as sub-contractor prior to Sep 2004, on which service tax liability has been discharged by the contractor Rs 5,04,247.52/- Rs 5,04,247.52/- C Non-consideration of payment of service tax through CENVAT while calculating amount of service tax paid Rs 3,52,356/- 0 D Application of rate of tax on the date of provision of services Rs 2,66,019/- 0 E Grossing up of taxable amount due to inadvertent mentioning of service tax with taxable value of services in some returns Rs.14,65,840.40/- 0 Rs 30,27,159/- Rs 5,04,247.52/- 4.11 In respect of wrong availment of Cenvat credit Commissioner has observed as follows:- 2. Wrong availment of Cenvat Credit It has been alleged that the Noticee have taken credit on the strength of certain invoices which do not contain the requisite details as prescribed under Rule 4(A) of the Rules and therefore these invoices are not in conformity with Rule 5 of Service Tax Credit Rules, 2002 and Rule 9 of the Cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ENVAT 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 aid 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 Tax registration number of the person issuing the invoice, as the case may be], name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit. Rule 9(9) The provider of out put service availing cenvat credit shall submit a half yearly return in the form, specified by Notification, by the Board the Superintendent of Central Excise by the end of the month following the particular quarter or half year . In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility to identify the documents for verification, whereas they are required to maintain proper records for receipt and consumption of the input service under Rule 9(6) of the Cenvat Credit Rules, 2004. It is imperative that the invoices must indicate the service tax registration no. alongwith Sl. No. of the invoice. This credit therefore is inadmissible. The excess credit of Rs 14,000/- taken by the noticee against the Invoice No.5212 and 3010 dated 07.07.2007 of M/s B.S.NL. would not be also available to them and the correct position regarding availability of the credit would be as under Eligible credit Ineligible credit Rs.8,31,382/- Rs.10,32,676/- - 14,000/- + 14,000/- Rs.8.17,382/- Rs 10,46,676/- The details of the credit to be allowed and to be disallowed are tabulated here as under:- No. of disputed invoices Amount alleged to be disallowed in the notice Amount found eligible for the credit after verification Amount liable to be disallowed 417 18,64,058.00 Rs.8,17,382/- Rs.10,46,676/- Further out of the inadmissible amount, the assessee has also taken credit on certain invoices repeatedly which apart from inadmissibility shows gross negligence and casual attitude of the Notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een disallowed subject to the satisfaction of the concern original officers. Tribunal in the case of Laxmi Organic Industries Ltd. (supra) has held that denial of credit in similar situation cannot be upheld. Going by the above decision and specifically the proviso to Rule 9(2), we do not find any merits in disallowance of the credit for the remaining amount of Rs.3,95,994/- wherein some other details also were missing and after causing due verification said details were not verifiable has been recorded in the impugned order. We do not find any merits in the contention raised by the appellant that they had submitted a detailed chart along with the miscellaneous application of 2010. It is not open to the appellant to bring in additional documents charts contrary to the verification that was made at the time of adjudication and these charts, on verification, has not been confirmed by the officers verifying the same. We do not find any merits in these submissions of the appellant. Accordingly, credit of Rs.3,95,994/- as disallowed is upheld. 4.13 For invoking the extended period Commissioner has recorded as follows:- Invocation of Extended Period - The notice mentions that the returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir business and discharge of their tax liability to the Department. Non submission of ST-3 returns will tantamount to suppression of material facts from the Department. Further, as discussed supra the information supplied in the returns was found contrary to the facts and figures submitted by the assessee themselves in course of these proceedings. Important figures like amount realized etc. are found mis-reported in the ST - 3 returns alongwith inadmissible credit availed without exercising due precautions. I, therefore, hold that the Noticee has contravened the various provisions with the intention of evading the service tax due and invocation of extended period is rightly invoked in the show cause notice. In the following cases the Tribunals have held the conduct of non-filing of return can be termed as suppression - 1. Shri Ram overseas Finance Ltd. Vs. Commissioner 357(Tri. Chennai) 2007(6)STR- 2. Suprasesh GIS Brokers Pvt. Ltd. Vs. Commissioner - 2009(13)STR- 641(Tri. Chennai) Hence the contention of the noticee is not maintainable and I hold that the extended period is invokable keeping in view the facts and circumstances of this case. The findings recorded by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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