9911796707
TMI Blog2024 (9) TMI 1548X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of services rendered under this category, the Service Tax demand of Rs.1,49,58,963/- was made. The audit team reconciled the Returns filed as per ST-3 with the details shown in the Profit and Loss account and the Balance Sheet and came to a conclusion that there was short reporting of the turnover. Accordingly, Service Tax of Rs.19,32,214/- was demanded. After similar reconciliation, the audit found that the appellant has incurred expenditure towards manpower supply on which no Service Tax was paid for which demand of Rs.4,68,928/- was made for the Service Tax to be paid on RCM basis. Based on these audit observations, Show Cause Notice was issued on 18.06.2020 demanding the Service Tax for the period 1.10.2014 to 30.06.2017. After due process, the adjudicating authority confirmed the demands. Being aggrieved, the appellant is before the Tribunal. 2. The Learned Consultant submits that the appellant is running one Vehicle Repair and Maintenance service centre wherein they undertake the repair works of various vehicles. On such services they have been paying the Service Tax on a regular basis. They are also maintaining the proper accounts and records and filing their ST- 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is has been accounted for as labour charges in their books of account , which has been viewed erroneously by the Revenue as having been paid towards Manpower services to confirm the demand. 5. In view of these submissions, he prays that the appeal may be allowed on merits. 6. He further submits that the Show Cause Notice issued on 18.6. 2020 for the transactions which have taken place between the period 1st June, 2015 to 30.06.2017, is fully time barred. Admittedly, the appellants are registered with the Service Tax Department and have been paying their Service Tax regularly and also filing their ST- 3 returns. In respect of Amusement park, admittedly there was no Service Tax liability till 1.06.2015 even as the appellants were carrying on this business right from 2010-11 onwards. The appellants carried a bonafide belief that even subsequent to this amendment they were still eligible for the exemption from Service Tax in terms of Section 66D (a). Even the Department after receiving all the Regular S T 3 Returns from the appellant and knowing that the appellants were carrying on the Amusement Park business for such a long time, never raised any query as to why the Service Tax was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envat Credit Rules, 2004 was amended to the effect that even if the assessee initially did not opt for the proportionate reversal of the cenvat credit in respect of common inputs / inputs, still this option is required to be considered, without directly demanding the Service Tax @ 5/6%. The Tribunals / Courts have been consistently holding that this beneficial legislation would be applicable with retrospective effect. He relies on the case law of Tiara Advertising v. Union of India - 2019 (30) G.S.T.L. 474 (Telangana)] and CST-1 Kolkata Vs Surya Vistacom Pvt Ltd - 2022 (66) GSTL 290 (Kol HC). Therefore, as the Dept has directly resorted to demand the amount @ 5/6%, in view of the cited case laws, the confirmed demand is required to be set aside on merits. 9. He further submits that even in this case of the alleged common credit taken, the appellant has declared all the CENVAT Credit taken in their ST- 3 Returns which are Relied Upon Document. Even under the self-assessment regime, as per the CBEC Manual, scrutiny is required to be taken up by the Range officials towards the Returns filed and they should seek information in case they have any query. In the present case, no such scr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he justifies the confirmed demand and he submits that the present appeal filed by the appellant is required to be dismissed. 12. He heard both sides and perused the appeal papers and other documentary evidence and case laws placed before us. 13. Admittedly, the appellant is providing two different services, one that of servicing of motor vehicles and another one is on account of running of Amusement park. These two services are being rendered from two different locations. As per the Agreement copies submitted by the appellant, the appellant is running the Amusement park since the year 2010. Prior to 1.7.2012, the services were exigible to Service Tax only when the particular Service was within the services defined under Section 65 of the Finance Act 1994. Admittedly, this service was not under the Service Tax 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. We find that there is no dispute that the Amusement park was covered under the Negati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the clause (j) was omitted with effect from 1.6.2015 in the Section 66D-Negative List of the Finance Act 1994, it clarifies the legislative intent to charge Service Tax on this activity on this huge/vast industry. In such a case, it was definitely upon the Revenue, to have flagged the activities of the appellant to ensure that they start paying the Service Tax. The fact that there is no allegation that they were collecting the Service Tax, would lend credence to the appellant's submission about their bonafide belief that they are not required to pay the Service Tax. In the case of the appellant, they were already operating under the jurisdiction of Service Tax authorities and were filing their ST 3 Returns and their turnover as per the P&L accounts and Balance Sheet could have been checked for proper compliance. There is nothing to indicate that any scrutiny was being undertaken for the ST 3 Returns being filed. The Hon'ble High Court of Allahabad, in the case of CCE, Noida Vs. Accurate Chemical Industries- 2014(310) ELT 441 (All.) has held as under: "5. Admittedly, a show cause notice was issued on 16 August 2007 beyond the prescribed period of one year but the Revenue sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of transformers. This indicated that there was no fraud, collusion, misstatement or suppression of facts. Besides, since the situation was revenue neutral, no intent to evade the payment of duty could be ascribed to the assessee. Once, there was no intent to evade the payment of duty, the Tribunal was justified in coming to the conclusion that the extended period of limitation under the proviso to Section 11A(1) of the Act, would not be attracted. Hence, no substantial question of law arises in the appeal. It is, accordingly, dismissed". In the case of Sterlite Telelink Ltd., Vs. CCE, Vapi, 2014 (312) ELT 353 (Tri. All.) the three member Bench of Tribunal has held as under: "27. There is no dispute that the appellant herein availed Cenvat credit of Rs. 21,69,668/- based upon the supplementary invoice No. 1199, dated 5-12-2001 raised by the supplier, incidentally sister concern of the appellant. It is also on record and undisputed that the appellant herein had filed monthly ER-1 return for Feb. 2001 to authorities in time. At this juncture, I have to refer to the Supplementary Instructions of C.B.E. & C. and more specifically Chapter VI which relates to scrutiny of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d scrutinise the correctness of assessment." (Emphasis Supplied) 28. It can be seen from the above reproduced instructions given to the authorities that C.B.E. & C. had mandated the Central Excise Officers to scrutinise the returns and shall call for the documents from the assessee, the important aspect in the instructions is that the Central Excise officers shall requisition all connecting documents. It is on record that the officers in this case did not, at any point of time, called for any record or sought any clarification from the assessee. It is seen that the lower authorities have recorded a statement of Shri T. Baburaman, Authorised Signatory of the appellant under Section 14 of Central Excise Act, 1944. On reading of the said statement, I find that Shri Baburaman has categorically stated that they were not aware of the circumstances under which the supplementary invoice No. 1199, dated 5-12-2001 was issued by their sister concern from Aurangabad. On the basis of said statement, show cause notice which was issued to the current appellant, had alleged as under : "It appears that the Silvassa unit was fully aware of the fact that their Aurangabad unit had raised supplem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Park were always been shown as part of their P & L Account, there is nothing to indicate that the appellant had suppressed any factual details. The Audit itself was conducted in Janaury 2020 i.e. after about 3 years after the GST regime had set in. 17. In the case of CC & CE & ST Bangalore (Adjudication) Vs Northern Operating Systems Private Limited-2022-61-GSTL-129-SC, the Hon'ble Supreme Court, on the issue of confirmed demand in respect of extended period, has held as under:- "62. The revenue's argument that the assessee had indulged in wilful suppression, in this Court's considered view, is insubstantial. The view of a previous three judge ruling, in Cosmic Dye Chemical v. Collector of Central Excise [(1995) 6 SCC 117 = 1995 (75) E.L.T. 721 (S.C.)] - in the context of Section 11A of the Central Excise Act, 1944, which is in identical terms with Section 73 of the Finance Act, 1994 was that : "Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are clearly qualified by the word "wilful" preceding the words "mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year ending 31-3-2006, 31-3-2009 and 31-3-2010 and the Show Cause Notice is dated 19-10-2011. The Show Cause Notice is issued covering the periods 2006-08, 2008-09 and 2009-10 with the sole allegation at Paragraph 7 (page Number 3) of the Show Cause Notice that "granting right .... for consideration of money, would have gone un-noticed but for the verification of their records during audit .... have wilfully suppressed the fact of receipt ... and thereby contravened the provision with an intention to evade payment of tax ... Hence, the proviso to Section 73(1) of the Finance Act, 1994 ... invokable ..." 17.2 Clearly, the Show Cause Notice is issued alleging wilful and intentional suppression of facts by the appellant. It is trite in law that the suppression (intentional and deliberate) can never be said to exist when material and relevant facts forming the basis of the demand were already within the knowledge of the Revenue. Accordingly, the pre-conditions for applicability of the proviso to Section 73(1) ibid cannot be said to be met. In such eventuality, the extended period of limitation cannot be invoked and the demand to be confined to the normal period of one year. 17.3 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here, without taking up any scrutiny of the Returns periodically, this demand has been raised and confirmed after 5 years. In respect of Manpower Supply, since the Service Tax payable would be eligible for cenvat to the appellant himself, we find that this would result in a revenue neutral situation, wherein no suppression can be alleged. As per our detailed discussions supra, we have already held that no case of suppression has been made out against the appellant. Therefore, even in respect of the confirmed demand of Rs.19,32,214/- towards the Maintenance and Repairs Services and Rs.4,68,928/- towards the Manpower Services cannot be legally sustained on account of time bar. We set aside these confirmed demands on account of time bar and allow the appeal to this extent. 21. Now coming to the confirmed demand of Rs.72,94,797, in respect of CENVAT Credit. First of all, we find that the entire demand has been quantified based on the total turnover of exempted services on which the service tax has been confirmed at the rate of 5% / 6% / 7% / 8%, of the value of exempted turnover. The Tribunals and High Courts have been consistently holding that even if the appellant fails to opt for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice dated 17th October, 2016, we find that there is no specific allegation or prima facie finding of any wilful misstatement or suppression on the part of the assessee. That apart, the details have been culled out by the adjudicating authority from the available records and there is no new or fresh tangible material available in the hands of the adjudicating authority to make out a case of wilful misstatement or wilful suppression. Therefore, the Tribunal was fully justified in holding that the extended period of limitation could not have been invoked. 13. As pointed out in the aforementioned decision, if according to the adjudicating authority, the assessee did not abide by the provisions of Rule 6(3) of the Rules, it was open to the adjudicating authority to reject the assessee's claim as regards the disputed Cenvat credit and it could not mechanically invoke 6% Rule on the assessee. That apart, the Tribunal also, on facts, noted that the department mechanically applied 6% of the entire balance-sheet turnover of the assessee without detailing as to why the said turnover has been taken and why not the value of trading that is provided in Rules, namely, the diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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