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TMI Blog2024 (6) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... es with the jurisdictional authority and had to give solvent surety in respect of the remaining amount. If the said requirement has been complied with then matter is covered in favour of the appellant and the demand made by impugned order to the extent of rent received from these clients could not have been confirmed in the impugned order. The case of the appellant was not considered on the basis of the documents and other evidences which were available at the time of investigation and adjudication, even efforts has not been made to reconcile the figures of ST-3 returns with the balance sheet - The exercise which done shows that there may be some variation in the category of services against which service tax has been discharged and demanded in the show cause notice but it is not correct to say that the service tax has not been paid against the said services. Even Board have clarified that change in the classifiable services should not be lead another demand being made but the service tax paid under one category should have been adjusted against the taxable services under which it was due. As this impugned order has been passed without consideration of the documents which exists at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) I also impose a penalty of Rs. 10,000/- (Ten Thousand only) under Section 77 (1)(c) of the Finance Act, 1994, for the afore-mentioned contraventions. (h) I also impose a penalty of Rs. 10,000/- (Ten Thousand only) under Section 77 (1)(d) of the Finance Act, 1994, for the afore-mentioned contraventions. (i) I also impose a penalty of Rs. 10,000/- (Ten Thousand only) under Section 77 (2) of the Finance Act, 1994, for the afore-mentioned contraventions. (j) I also impose a penalty of Rs. 1,65,88,643/- (Rupees One Crore, Sixty Five Lakhs, Eighty Eight Thousand, Six Hundred and Forty Three only) upon the aforesaid party, under Section 78 of the Finance Act, 1994, for the afore- mentioned contraventions. (k) I also impose a penalty of Rs. 37,10,373/- (Rupees Thirty Seven Lakhs, Ten Thousand, Three Hundred Seventy Three only) upon the aforesaid party, under the provisions of Rule 15 of the Cenvat Credit Rules, 2004, for the afore-mentioned contraventions. (l) I also impose a penalty of Rs.1,00,000/- (Rs. On Lakh Only) upon Shri Rajeev Agarwal, Partner of M/s Gopi Apartments, South-X Mall, 0-Block, Plot No. 09, Scheme 2, Kidwai Nagar, Kanpur under the provisions of Section 78A of the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se services cannot be covered under the category of Renting of Immovable Property Services but the same would be covered under the category of Business Exhibition Service or Event Management Service and appellant have not paid any service tax on these services namely Business Exhibition Service or Event Management Service. Similarly, they were receiving certain charges under the category of Common Area Maintenance Service which is covered under the category of Management, Maintenance or Repair Service and no service tax was paid under the said categories. They have also charged amounts towards power supply against which they have not paid any service tax, though these services falls under the category of Business Support Service. 2.6 Further, it was observed that appellants availing Cenvat Credit of Rs.37,10,373/- on the services related to construction of building- construction services, architect services etc. before the opening of mall. These services could not have been input services for the provisions of the output services before the opening of mall. 2.7 After completion of the investigation revenue was of the view that during the period June, 2009 to September, 2013 appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Higher Education Cess Rs.20,177/- ] wrongly availed by them on the services availed for construction of the commercial building should not be recovered alongwith interest under Rule 14 of the Cenvat Credit Rules, 2004; v. Penalty under Rule 15 of the Cenvat Credit Rules, 2004 should not be imposed upon them. 2.10 This show cause notice has been adjudicated as per the impugned order referred in para-1 above. Aggrieved appellants have filed these two appeals. 3.1 We have heard Shri Ravi Holani and Shri Gokul Holani learned Counsel appearing for the appellant and Shri Santosh Kumar learned Authorised Representative appearing for the revenue. 3.2 Arguing for the appellants learned Counsel submit that- The matter has been adjudicated against them without providing them documents which they had been asking for making an effective defence and also it has been decided without hearing them. In the matter, the impugned order has been passed in non-speaking manner, violating the principles of natural justice. They have paid the entire tax liability due from them which could be co-verified relied upon their balance sheet/profit and loss account figures. They submitted a chart showing the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 496(All) (b) (Union of India v. Ex, Constable Amrik Singh, AIR 1991 SC 564). Even the Department has no authority to deny to provide Xerox Copy of all the records even at the investigation stage DINA METALS LTD Vs. UOI 2010(255) E.L.T. - 212 (PAT) and in their case, the show cause notice has been issued even without providing Xerox Copy of the entire documents seized even after their repeated request to supply the same, and as such, the show cause notice is invalid because of not result of any investigation rather than the personal opinion of the Department. In the show cause notice, at Paragraph No. 11 of the show cause notice, the Department of Central Excise expressed that ...it appears that the letter dt.24-10-2009 has not been submitted by M/s Gopi to the Department which is absolutely incorrect. The letter dt. 24-10-2009 has been referred in the following correspondences:- (i) Summon vide F.No. DGCEI/KRU/INT/17/09/784 dated 08-08-2012 duly replied on 14/08/2012; (ii) Summon vide F.No. DGCEI/KRU/INT/25/12/79 dated 30-01-2013 duly replied on 08-02-2013, (iii) Summon vide F. No. DGCEI/KRU/INT/25/12/131 dated 15-02-2013 which was replied on 25-02-2013 with Xerox Copy of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice is concerned, the Department did not point out how the figure of Rs. 40627902/- and Rs. 21792262/-has been calculated? Without having such details, they are not in a position to give any reply except that the demand of Service Tax to the extent of Rs. 59,85,923/- is absolutely incorrect and unreasonable so the same is liable to be withdrawn. Actual rent income for October 2011 to March 2012 is Rs. 1,85,09,240/- and April 2012 to March 2013 is Rs. 3,20,61,752/-. So far as their conduct is concerned, they have paid tax which was recovered on the account of Service Tax after taking the effect of CENVAT Credit. Attention was invited to Annexure No. II of the Show Cause Notice. In such annexure, the Department of Central Excise expressed additional Service Tax liability to the extent of Rs.23,37,782/- but without giving the service and evidence of the recovery of such alleged figure of Rs. 56,94,492/- so far as the difference in the years 2009-2010 to 2012-13 is concerned, the actual figures year wise are: Rs. 2010421/- for 2009-10, Rs. 3491172/- for 2010-11, Rs. 5202012/- for 2011-12 and Rs. 42,09,2197- for 2012-13. In this regard it was submitted that they had pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could reach your office to collect the same. 52. On the basis of the facts on record, I observe that the party is in possession of all the documents, upon which the department has relied to frame its allegations, and which Includes the information provided by its various service recipients. I also observe that almost one year has passed, since the party is in receipt of the show cause notice and all such RUDs, the contents of which have been relied upon, while framing the allegations and proposing demand of Service Tax, yet, the party just filed their interim reply to counter the proposed allegations, framed against them. Further, they have never presented themselves before the adjudicating authority for personal hearing in the matter. In these circumstances, I am of the view that in case the party honestly desired copies of the Non-RUDs, and they were not able to get them from the department, it was open for them to approach the senior officers of the department, and present their case/request, which was never done. Therefore, I am of the opinion that the party is deliberately adopting the dilatory tactics and avoiding finalization of their case on the excuse of not being provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 78A of the Finance Act, 1994 can be imposed upon Shri Rajeev Agarwal, Partner of M/s Gopi Apartments, South-X Mall, Kanpur? 4.4 In respect of the payment of service tax, renting services provided to M/s Future Value Retail Ltd. and M/s Cinemax India Ltd., Commissioner in para-60 observed as follows:- 60. Going into the backdrop of the service of renting of immovable property, I observe that Service Tax, whether payable or not, remained in dispute until decided by the Hon'ble High Court of Delhi in the case of Home solution Retail India Ltd. vs. Union of India [2009(14)STR433], wherein it has been held that the taxable category of renting of immovable property covers only such services which are in relation to renting of immovable property, and not the activity of renting of immovable property itself. It was implied that the rent against the immovable property is not the taxable amount, but the amount received at the time when property is given on rent through a broker as Commission, or to any other person on consideration will be chargeable to Service Tax. The above issue, with respect to dispute of taxability on the renting of immovable property, attained finality vide a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty in this appeal shall be entitled to interest on the amount stayed by this Court at such rate as may be directed at the time of final disposal of the appeal. It is clarified that this interim order shall apply only in the case of those members of the association who were petitioners before the High Court in the writ petition giving rise to this appeal and who shall file the requisite affidavits within the aforesaid period of four weeks from today. We further direct that any default in deposit of any one of the instalments by the dates fixed above, would result in vacation of this stay order and it will be open to the department to recover the balance amount in accordance with law. I.A. No. 3 for impleadment Learned counsel for the applicant seeks leave to withdraw the application stating that the applicant would file a substantive petition. Accordingly, the application is dismissed as not pressed. C.A. Nos. 8391-8393/2011 Shoppers Stop Ltd. Etc. Etc. v. Union of India Ors Etc. Etc. Being a member of the appellant-association in C.A. No. 8390/2011, no separate orders are called for in this appeal. C.A. No. 8397/2011 M/s. Metro Shoes Ltd. Anr. v. Union of India Ors. C.A. No. 8398/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect, but surprisingly, I do not find anything which can support their own claim. The party has not submitted a single document which could be termed as evidence in support of their contention. I observe that in the body of the show cause notice itself, it was clearly mentioned that 'They are further directed to produce at the time of showing cause, all the evidences upon which they intend to rely in support of their defense'. The party was well aware of the allegations of evasion of Service Tax, as made in the instant show cause notice, and hence, it was imperative upon them to counter those allegations, with such evidences, that were fruitful. Surprisingly, I observe that the party had not even bothered to submit any ledgers, statements etc., to counter such allegations of evasion of Service Tax. I find that in case of U.G. Sugar Industries Ltd. Versus CCE, Meerut-Il [2011 (266) E.L.T. 339 (Tri. - Del.)], it was held that Once the defence was raised by the appellants, it was essentially for the appellants to lead necessary evidence in that regard. Mere raising of plea in answer to the show cause notice does not by itself mean the proof of correctness of such plea. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of computation of the figure work stated by them. I have gone through the defence submissions of the party, but surprisingly, I do not find even a single document/work-sheet which can be termed as an evidence in support of their claim. As already expressed above, I am again of the considered opinion that the party has miserably failed to provide any documents, which could have been instrumental as concrete evidence in support of their contention. The party was well aware of the clear allegations of evasion of Service Tax, as made in the instant show cause notice, and hence, it was imperative upon them to counter those allegations, with such evidences, that were fruitful. In absence of any proper tangible evidence on record to counter the allegations made out in the show cause notice, there is no option but to confirm the demand against the party. In the instant case, it is on record that the party was charging Common Area Maintenance (CAM) charges from their clients, in respect of all open areas of the mall building, lift, parking, air conditioning, etc., for the facilities related to housekeeping, sanitation, security of the said commercial complex, etc., and was therefore lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have been covered by the definition of 'pure agent', as per the provisions of the Rule 5(2) of the Service Tax of (Determination of Value) Rules, 2006. In such a case, when the electricity charges had been recovered by the party on no profit, no loss basis and paid to electricity department, it would have been nothing but an incidental reimbursable expense, occurring during the course of providing the taxable service. In such a case, there would have been no need to include such incidental reimbursable expense, incurred by the party as a pure agent , in the taxable value as per Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006. 75. I observe that the situation related to the 'inclusion in or exclusion from value of certain expenditure or costs' is addressed in the provisions of Service Tax (Determination of Value) Rules, 2006, which lays down that (1) Where any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service to act as his pure agent to incur expenditure or costs in the course of providing taxable service; and it should receive only the actual amount incurred to procure such goods or services, which is not the case here. 77. However, in the facts of the present case, the party was not recovering power supply charges on the actual consumption basis, as per the tariff fixed by Government i.e. as per the electricity meter reading for each and every tenant, but instead, such charges were being collected by the party on lumpsum basis. I am of the view that in this case, when the Service Tax liability was proposed to be fastened upon the party through this show cause notice, on account of collection of power supply charges from its tenants, the party should have come up with documentary evidences to negate such allegations, and prove that they have not collected any excess amount towards electricity charges. They should have justified the matter by submitting necessary documentary evidences to prove that such charges had been recovered from each one of their tenants on no profit, no loss basis, for further remitting it to the electricity department. However, it appears that no such ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they had been paying appropriate Service Tax in respect of the said taxable activity from 1st April, 2013. Once again, I again place reliance on the observations of the Hon'ble Tribunal in the case of U.G. Sugar Industries Ltd. Versus CCE, Meerut-Il [2011 (266) E.L.T. 339 (Tri. - D * el .)], wherein it was held that mere raising of plea in answer to the show cause notice does not by itself mean the proof of correctness, and it is absolutely necessary for the person raising such plea to make the same good by producing sufficient evidence in support of such plea. 81. In absence of any evidences put-forth by the party, I have no option but to hold that the party is liable for payment of Service Tax on account of providing the 'Service,' under the provisions of the Section 65(44) of the Finance Act, 2012, since such activity is neither covered in the negative list nor the same comes under the categories of exempted services, to the tune of Rs.2,32,642/- (including Education Cess and SHE Cess) (Annexure-IV) under the proviso to Section 73(1) of the Finance Act, 1994. 4.10 In respect of the services such as Business Exhibition Service and Event Management Service, appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Management Services under the provisions of the Section 65(105)(zzo) of the Finance Act, 1994 and Section 65(105)(zu) of the Finance Act, 1994 respectively, upto 01.06.2012, and providing taxable services even after 01.07.0212, as such services are neither covered in the negative list nor are they exempted services, to the tune of Rs.24,102/- (including Education Cess and SHE Cess) (Annexure-V) under the proviso to Section 73(1) of the Finance Act, 1994. 4.11 The entire issue of Cenvat credit has been dealt by the impugned order in para no.93 Commissioner has observed as follows:- 93. In this regard, I observe that the CBEC vide its Circular No. 96/7/2007-ST dated 23.08.2007, as amended vide Circular No. 98/1/2008-ST dated 04.01.2008, has been issued to clarify the issue. The relevant excerpts of the same are reproduced here-in- below: In the Circular No. 96/7/2007-S.T., dated the 23rd August, 2007, after Reference Code 086.05/23-8-07, the following Reference Code and corresponding issue and clarification shall be inserted, namely :- Reference Code Issue Clarification (1) (2) (3) 096.01/4-1-08 Commercial or industrial construction service [section 65(105)(zzq)] or works contract s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s service tax un-discharged, except for the liability which is in respect of the two clients namely M/s Future Value Retail Ltd. and M/s Cinemax India Ltd, which undisputedly is covered by the decision of the Hon ble Supreme Court referred in para 4.5 above. Nothing has been recorded in the impugned order with regards to compliance with the said order and the demand has been confirmed against the appellant. As per the order of the Hon ble Apex Court these clients were required to deposit 50% of the tax dues with the jurisdictional authority and had to give solvent surety in respect of the remaining amount. If the said requirement has been complied with then matter is covered in favour of the appellant and the demand made by impugned order to the extent of rent received from these clients could not have been confirmed in the impugned order. 4.14 We also find that the case of the appellant was not considered on the basis of the documents and other evidences which were available at the time of investigation and adjudication, even efforts has not been made to reconcile the figures of ST-3 returns with the balance sheet. When we examine the figures of balance sheet alongwith ST-3 return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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