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TMI Blog2024 (9) TMI 1548X X X X Extracts X X X X X X X X Extracts X X X X ..... bracket at that time. Subsequently, from 1.7.2012, all the services except those which are listed in the Negative List under Section 66D or those services, which are exempted under Notification No.25/2012 ST dated 20.6.2012, are taken as services on which Service Tax is required to be paid - in view of the service coming under Negative List even after 2012, the appellants were not paying the Service Tax. The Negative List after amendment with effect from 1.6.2015, omitted (j) of Section 66D. Therefore, from 1.6.2015, the Amusement park activity are no more covered under the Negative List, nor is it being claimed by the appellant that they are covered under the provisions of exemption Notification No.25/2012 ST dated 20.6.2012 as amended. It can be observed that this clause (a) of Section 66D provision is specifically applicable for the services rendered by the Government or local authority. In the present case, the Amusement park is not run by the Municipality. Though the appellant would have taken permission from the Municipal Corporation to operate the same, it cannot be by any stretch of imagination be taken as a service being rendered by the Govt. or Local authority. Without d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Relying on the ratio laid down by the Hon ble High Courts of Telangana and Kolkata, wherein it is held that the Revenue cannot directly demand the reversal @ 6/8% of the exempted turnover, without asking the assessee to reverse the cenvat credit on proportionate basis, we set aside the confirmed demand of Rs.72,94,797/- on merits. As per observations in the earlier paragraphs that no case has been made out towards suppression, read with the cited case laws on limitation, it is held that the confirmed demand of Rs.72,94,797/- is not legally sustainable even on account of time bar. The total confirmed demand of Rs. 1,73,60,105/- is set aside on account of limitation - The confirmed demand of Rs.72,94,797/- on account of CENVAT availment is set aside both on account of merits and on account of limitation. Appeal allowed. - MR. R. MURALIDHAR, MEMBER (JUDICIAL) AND MR. K. ANPAZHAKAN, MEMBER (TECHNICAL) Shri Sudhir Mehta, Advocate for the Appellant Shri S. Debnath, Authorized Representative for the Respondent ORDER The appellants are engaged in providing the service of Repairs and Maintenance of motor vehicles. At a separate location, they also run one Amusement park. They have a singl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no service tax is required to be paid as this was part of the Municipality (Government) park work. They were under the belief that the service was still continuing under the Negative List in terms of Section 66D (a). Therefore, even after 1.6.2015, they were neither charging the Service Tax on the clients nor were they paying any Service Tax. No query whatsoever was raised by the Department for the next 5 years till the audit was taken up in 2020. 3. In respect of the amount said to be short paid Service Tax of Rs.19,32,214/- on account of Repairs and Maintenance of motor vehicles services, he submits that they have maintained all the records properly and the Department could not have entered into the act of reconciling the Balance Sheet and Profit and Loss account after 5 years to come to the conclusion that there was a short payment. The Profit Loss figures contain even the services rendered as free services for the newly purchased vehicles, wherein no amount is collected but are accounted for in the books, so as to set off the expenditure incurred towards such services. These points have not been considered while quantifying the demand. It is on record that wherever Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be eligible for CENVAT Credit if the Service Tax is paid on RCM basis, there is complete absence of intent to suppress. These factual documentary evidence would prove that there has been no suppression on the part of the appellant, let alone with any willful intent to evade payment of Service Tax. Therefore he submits that the entire demand of Rs.1,73,60,105/- is required to be set aside on account of time bar alone. 7. In respect of the CENVAT Credit of Rs.72,94,797/- on which the demand has been confirmed, he submits that the appellant has maintained separate accounts and then they were taking credit only in respect of the input services used in their Maintenance and Repair activities. The business of Maintenance Repair service and Amusement activities are carried out in two different places, separated by about 100 Kms. Since they were not charging / paying any Service Tax on the Amusement park activity, they were careful so as not to take any CENVAT Credit for the services used in that place. Therefore, he submits that the service tax confirmed on account of Cenvat being taken is required to be set aside on merits. 8. Without prejudice to the above submissions, he submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is running two different business units, one wherein they are providing the exempted service on account of Amusement park [exempted till 1.6.2015] and they were also running the taxable service business in the form of service and repairs of motor vehicles. The appellants were taking the credit commonly for various services like insurance, banking, security services etc. The appellants were also carrying on trading business which is an exempted service. Thus, they were using the CENVAT Credit on various input services used commonly between the taxable and exempted services. Therefore, he justifies the confirmed demand of Rs.72,94,797/- on account of CENVAT Credit taken on the common input services. 11. Coming to the demand on account of Amusement park, the Learned AR submits that the exemption available earlier in terms of negative list Section 66D (j) was no more available to the appellant from 1.6.2015. The entire demand has been worked out for only the period 1.6.2015 till 30.06.2017. Since there is no exemption available to the running of Amusement park under the service tax provisions under Section 66D (a), he justifies the confirmed demand of Rs.1,49,58,963/- on this account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The relevant provision reads as under : 66D (a) Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere 15. It can be observed that this clause (a) of Section 66D provision is specifically applicable for the services rendered by the Government or local authority. In the present case, the Amusement park is not run by the Municipality. Though the appellant would have taken permission from the Municipal Corporation to operate the same, it cannot be by any stretch of imagination be taken as a service being rendered by the Govt. or Local authority. Without dispute, the Amusement park is being run by the appellant who is a commercial entity and not any Govt / local authority. Hence, we are unable to accept the arguments of the appellant on this count. Thus it is clear that after 1.6.2015, the appellants are neither covered under Negative List nor are they covered under any exemption Notification. 15.1 Coming to the points raised by the appellant on the time bar issue, we find substantial force there. From the Show Cause Notice, we do not see any allegation of the Revenue that they are charging the Service Tax or collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had duly filed ER-1 returns on a monthly basis. Under the circulars of the Central Board of Excise and Customs, the Range Officer was required to carry out a detailed scrutiny of the ER-1 returns and if this had been done, the short payment would have been detected. There was no evidence of any collusion between the assessee and the jurisdictional Central Excise Officers. The short payment was detected when an audit team visited the premises and examined the records but this, as the Tribunal held, could have been detected even by the jurisdictional Range Officer much earlier. In the circumstances, it was held that there was no suppression of fact or wilful misstatement on the part of the assessee and no ground was, therefore, available for invoking the extended period of limitation. In addition, the Tribunal observed that in the present case, the situation was revenue neutral since, in the facts of the case, the entire duty paid by the assessee in respect of the clearances of MS tanks and radiators to its transformer unit was available to the transformer unit as Cenvat credit. In other words, the Cenvat credit was available not to a third party buyer of the assessee s man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site information as required by different rules and also provide a list of all records maintained by him to the Range Office. The Officer responsible for scrutiny of return may require the invoices issued by the assessee, Daily Stock Account, Cenvat account, Cash ledgers, Ledger of all receipts and payments and the source documents etc. It shall be compulsory for the assessee to provide the necessary records upon receiving the Requisite Letter from the Range Officer or other superior officers. He shall hand over the records under proper acknowledgement and receive them back under proper acknowledgement too. The Officer scrutinizing return may require presence of the assessee or his authorised person at mutually convenient time, for seeking certain information relating to the records. 2.2 The Superintendent of Central Excise in charge of the Range Office with assistance of the Inspectors in charge of the factory of an assessment scrutinise all the returns. They shall, in selected cases, call all connected documents including invoices and the records and scrutinise the correctness of assessment. 2.3 The Deputy/Assistant Commissioner of Central Excise will scrutinise the returns of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secondly, statement of authorised signatory on 13-9-2002 also clearly indicates that the person who was entering Cenvat credit based on the supplementary invoice, had categorically stated that they were not aware of the circumstances under which supplementary invoice was issued. Subsequent development at the end of supplier cannot be held against the assessee for denial of Cenvat credit taken by him on the proper duty paying documents. As has already been reproduced by me herein above, the supplementary instructions clearly indicate that the monthly returns shall be scrutinised by lower authorities which was not done in this case. Further, I find that the reading of Rule 7(1)(b) of Cenvat Credit Rules, 2002, would not carry the case of Revenue any further, as the appellant herein was not aware as to the reasons or circumstances under which supplementary invoice was issued; which is on record by way of statement recorded under Section 14 of Central Excise Act, 1944. In the absence of knowledge under which circumstances the said supplementary invoice was issued, no motive can be attributed to the assessee and the show cause notice invoking extended period of time against the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to collusion or willful misstatement or suppression of facts is untenable . This view was also followed in Escorts v. Commissioner of Central Excise [(2015) 9 SCC 109 = 2015 (319) E.L.T. 406 (S.C.)], Commissioner of Customs v. Magus Metals [(2017) 16 SCC 491 = 2017 (355) E.L.T. 323 (S.C.)] and other judgments. 64 . The fact that the CESTAT in the present case, relied upon two of its previous orders, which were pressed into service, and also that in the present case itself, the revenue discharged the later two show cause notices, evidences that the view held by the assessee about its liability was neither untenable, nor mala fide. This is sufficient to turn down the revenue s contention about the existence of wilful suppression of facts, or deliberate misstatement. For these reasons, the revenue was not justified in invoking the extended period of limitation to fasten liability on the assessee. 18. The CESTAT, Hyderabad in the case of Sriram Chits Private Limited Vs CCE ST 2023 (69) GSTL 397 (Tri-Hyd) has held as under: 16.2 Schedule to P L Account duly signed by the auditor and the audit report are placed on record; specific entry of the P L Account is at page number 177 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were being properly recorded in their books of account and such statutory documents like P L Accounts and Balance Sheets have been relied upon [RUD 3] by the Revenue to quantify the present demand. ST 3 Returns have been filed and the same are part of the Relied Upon Documents [RUD 2]. Thus, while the appellant has been able to bring in enough evidence in his support, the Revenue has failed to prove conclusively that non-payment of Service Tax on the Amusement activity is a deliberate, willful act so as to evade payment of Service Tax, which is required to invoke the extended period provisions. There is nothing to indicate that any scrutiny of ST-3 was undertaken which has been held as pre-requisite in the case laws of Accurate Chemicals and Sterlite Telelinks Cited above. Therefore, we find that ratio laid down in the above Hon ble Supreme Court s judgement, Hyderabad Tribunal s decision duly affirmed by the Supreme Court, and the other cited case laws would be squarely applicable to the facts of the present case. Accordingly, we hold that the Revenue could not have invoked the extended period provisions to confirm the demand of Rs.1,49,58,963/- on the Amusement park activities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions on behalf of the service provider. As rightly pointed out by Sri S. Ravi, Learned Senior Counsel, if the petitioner does not abide by the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004, it was open to the authorities to reject its claim as regards the disputed Cenvat Credit of Rs. 17,15,489/-. 22. In the case of CST-1 Kolkata Vs Surya Vistacom Pvt Ltd - 2022 (66) GSTL 290 (Cal HC), the Hon ble High Court has held as under : 11 . We have perused the show cause notice issued by the adjudicating authority and we found that there is no specific allegation against the assessee of any deliberate suppression or misstatement with an intent to evade taxes. At this juncture, it will be beneficial to take note of the decision of the Hon ble Supreme Court in Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (S.C.)] wherein the Hon ble Supreme Court held that every non-payment/non-levy of duty does not attract extended period and there must be deliberate default. Further, it was held that the conclusion that mere non-payment of duties is not equivalent to collusion or wilful misstatement or suppression of fact is untenable as the Act contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer or provider or output service to follow the procedure and pay the amount referred to in Clause 2(i) of sub-rule (3) with interest calculated at the rate of 15% per annum from the date of payment of amount for each of the months till the date of payment thereof. The adjudicating authority has not invoked the said rule . That apart, what is important to note is that the amount of legible Cenvat credit to the assessee was Rs. 41,17,269/- whereas the demand which was impugned before the Tribunal fastened a liability of Rs. 3,29,07,268/- which is not legally sustainable. 22.1 Further, we find that a contrary view has been taken by the Revenue in this issue. While on the one hand, the Department has issued the Show Cause Notice on the ground that Amusement parks fall under the category of exempted services and the appellant has taken common input services between the Amusement park and the Maintenance and Repairs of vehicle activities. On the value of services rendered towards Amusement Park service [with Service Tax @ 6/8%], the Cenvat reversal of Rs.72,94,797/- is demanded. On the other hand, the Show Cause Notice has been issued for an amount of more than Rs 1,49,58,963/- on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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