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TMI Blog2024 (10) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice provider and therefore Rule 9(i)(bb) would not be applicable to them. The appellant is paying service tax on reverse chare basis in terms of Rule 2(1)(d) of Service Tax Rules, 1994 and therefore credit can be availed in terms of Rule 9(i)(e) of Cenvat Credit Rules. Since Rule 9(i)(bb) is not applicable to the appellant, the credit cannot be denied.' Imposition of equal penalty under sec. 78 of the Finance Act, 1994 - HELD THAT:- Assumptions and presumptions cannot lead to a charge of suppression of facts and replace actual proof of intention to evade tax, more so when the appellant was eligible to take credit of tax paid on RCM basis instantly. Similarly holding that non-payment of Rs.3,750/- on expenditure incurred towards cafeteria charges viz. the license fee paid to the Revenue Department, Government of Tamil Nadu for running such cafeteria, amounts to evasion of duty merits to be rejected. The imposition of penalty must hence be set aside. Transition of credit - HELD THAT:- The transition provisions contained under section 142(3) of CGST Act 2017 allows refund of any amount of CENVAT credit, duty, tax or interest paid under the existing law. As per section 140 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce dated 18.12.2020 seeking to impose equal penalty under sec. 78 of the Finance Act, 1994 for failure to pay service tax for reasons of fraud etc. After due process of law, the learned Original Authority rejected the refund claim and held that the appellant was liable for penalty under sec. 78 of the Finance Act, 1994. It was further held that the Service Tax paid by the claimant is not falling under the category of excess paid or erroneously paid tax in terms of 11(B) of Central excise Act 1944 hence the amount paid cannot be refunded as per section 142 of the CST act 2017. In appeal, the Commissioner (Appeals I) upheld the adjudication order. Hence the present appeal. 3. Shri Rajaram Ramanan, learned Chartered Accountant appeared for the appellant and Smt. Anandalakshmi Ganeshram, learned Authorized Representative appeared for the respondent. 3.1 The learned Chartered Accountant for the appellant submitted that they are engaged in 100% Export of services and received consideration in freely convertible foreign exchange. The refund is concerning service tax paid under RCM, subsequent to Audit proceedings. The amount related to the period between April 2016 and June 2017 but paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of tax became recoverable from the provider of service on account of non-levy or non- payment or short-levy or short-payment by reason of fraud or collusion or wilful mis statement or suppression of facts or contravention of any of the provisions of the Finance Act or of the rules made thereunder with the intent to evade payment of service tax . . . . . . (e) a challan evidencing payment of service tax by the person liable to pay service tax under sub-clauses (iii), (iv), (v) and (vii) of clause (d) of sub-rule (1) or rule 2 of the Service Tax Rules, 1994. It is seen from the Rule that since tax is paid under RCM, the relevant provision is Rule 9(1)(e) ibid and not Rule 9(1)(bb), as evoked in the OIO and credit cannot be denied. In M/s Polygenta Technologies (supra) a similar matter was examined by CESTAT Mumbai. The relevant portion of the judgment is reproduced below:- 5. From the above, it is apparent that Rule 9(i)(bb) is applicable to supplementary invoice, bill or challan issued by provider of output service and Rule 9(i)(e) is applicable, inter alia, to a person liable to pay service tax under Rule 2(1)(d) of Service Tax Rules, 1994. It is apparent that the appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellaneous provisions for transition of credit under GST Act under Section 142 reads as follows:- Section 142 of GST Act 2017: Miscellaneous Transitional Provisions (CHAPTER XX TRANSITIONAL PROVISIONS) (3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. . . . . (8) (a) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to avail credit of the impugned service tax paid on the port services in its service tax ST-3 return. The petitioner did not claim transitional credit in terms of section 140(1) of the CGST, Act and wrongly took credit of the impugned service tax in ST-3 return and thereafter claimed refund of the same by referring to section 142(3) of CGST, Act. The Hon ble High Court found that the petitioner on the one hand illegally took credit of service tax on port services as credit in their ST-3 return and on the other hand filed application for refund of the same amount under section 142(3) of the CGST, Act which is certainly not permissible in law. Hence the petitioner has failed to follow the prescribed procedure to avail such a credit and consequently having lost such a right, he cannot claim revival of such a right and claim refund of the same by virtue of transitional provisions under Section 140(3) of the CGST Act. In the impugned case the appellant did not pay duty due to an error which was made good along with interest when it was pointed out by Audit. It was not a case of tax evasion and hence the right of the appellant to claim credit was not extinguished and was covered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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