9911796707
TMI Blog2024 (7) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... SH ARORA, MEMBER (JUDICIAL) AND MR. C. L. MAHAR, MEMBER (TECHNICAL) Shri. J.C. Patel, Advocate for the Appellant Shri. Girish Nair, Assistant Commissioner (AR) for the Respondent ORDER The Appellant undertakes exports of goods manufactured by it. For sale of such goods abroad, the Appellant received services of foreign commission agents, which are classifiable as Business Auxiliary service. Service tax is payable on such services received by the Appellant under reverse charge and such Service tax is available as Cenvat Credit to the Appellant. For the year 2010-11, the Appellant had not paid the service tax on such Business Auxiliary Service received by the Appellant from foreign commission agent under the belief that the same was exempted under Notification 18/2009-ST dated 7-7-2009. However, upon being pointed out by Audit that the said service tax was payable, the Appellant paid the same with interest on 8-4-2015. The amount of service tax was Rs.7,81,872/- and interest was Rs.6,51,275/- which admittedly stand paid on 8-4-2015 prior to issuance of Show Cause Notice dated 30-12-2015. For the years 2011-12 to 2014-15, the Appellant has duly declared, in the ST-3 Returns the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed in the ST-3 Returns and pursuant to such Returns, the Service tax had also been paid along with interest prior to issuance of Show Cause Notice. 2.2 Whether imposition of penalty under Section 78 of the Finance Act 1994 is liable to be set aside, in view of the fact that for 2010-11 the service tax was paid with interest prior to issuance of Show Cause Notice and for 2011-12 to 2014-15, the receipt of service was duly disclosed in the ST-3 returns and pursuant thereto service tax was paid with interest prior to Show Cause notice and when there can be no intention to evade service tax on reverse charge since the same is available to the Appellant as Cenvat Credit. 3. Since on being pointed out by audit, the Service tax with interest was paid up before issuance of Show Cause Notice, no Show cause notice could have been issued in view of Section 73 (3) of the Finance Act 1994: 3.1 For the year 2010-11, the Appellant had not paid the service tax on Business Auxiliary Service received by the Appellant from foreign commission agent under the belief that the same was exempted under Notification 18/2009-ST dated 7-7-2009. However, upon being pointed out by Audit that the said service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force Solutions Ltd-2012 (26) ELT 3 (Kar). 5.1 The Appellant places reliance on the following decisions in support of the submission that since the service tax on import of services payable on reverse charge is available as Cenvat Credit, there is no question of intention of evading the tax and therefore when such tax is paid before issuance of Show Cause Notice, benefit of Section 73 (3) is available and Section 73(4) does not apply and therefore penalty is liable to be set aside: Gujarat Borosil Ltd v CCE-2014 (36) STR 808 Nayara Energy Ltd v CCE-2023 (12) TMI 252-CESTAT- AHMEDABAD Enercon India Ltd v CCE-2012 (7) TMI 196-CESTAT- AHMEDABAD Essar Steel Ltd v CCE-2009 (13) STR 579. For 2011-12 to 2014-15: 6. For the years 2011-12 to 2014-15, the Appellant has duly declared, in the ST-3 Returns the value of the said Business auxiliary service received by the Appellant, as being taxable and pursuant to such Returns, the service tax also stands paid with interest, well before the issuance of the Show Cause Notice dated 30-12-2015. The details of payment of the Service tax are summarized at Page 38 of the Appeal. It would be evident from the following Table that the value of Services f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of service tax is by reason of fraud or collusion or willful misstatement or suppression of facts or contravention of provisions with intent to evade payment of service tax, nothing contained in section 73(3) shall apply. Therefore, if the charge of suppression of facts has been correctly applied in the impugned order, defence put forth by the appellant will not stand. In other words, the presence of suppression of facts in the present matter is the key determinant. 5.2 The relevant fact is that non-payment of service tax was detected during auditing by the departmental officers when it was noticed that the appellant had booked the expenditure relating to commission paid to foreign sales agents but there was no payment of service tax under reverse charge or no declaration of expenditure figures in the ST-3 returns. I find that vital Information with regard to payment to foreign agents was not mentioned in the ST-3 returns. The statement of authorized representative of the appellant reproduced in para 6 of the show cause notice shows that appellant was fully aware of the service tax liabilities and the appellant took shelter behind Notification No.18/2009-ST dated 07.07.2009, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty must be imposed equal to the duty determined under sub- section (2) of Section 11A. This is what Dharmendra Textile Processors - 2008 (231) E.L.T. 3 (S.C.) decides. The provisions of Service Tax Act, 1994 on penalty are para materia to the provisions of Central Excise Act. In the present case under consideration it has been shown above that there was wilful suppression of facts. The act of non-disclosure of agreements and the glaring non- disclosure of fact that an agreement stipulated that commission includes Service Tax cannot find shelter under the plea of bona fide belief. The appellant could only have evaded duty intentionally by suppressing these facts. Hence the Section 78 leaves no discretion but to impose penalty equal to the duty confirmed... 5.2.2 The decision in the case of Rajasthan Spinning Weaving Mills [2009 (238) E.LT. 3 (S.C.)) is also very relevant and I quote the following head notes. Penalty Mandatory penalty - Nature of - Penalty under Section 11AC of Central Excise Act, 1944 is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section Section 11AC ibid. (para 19] D ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
