9911796707
TMI Blog2024 (11) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice is that the appellant has billed the service tax amount in the 12 RA bills / invoices raised by them. However, there is no evidence adduced by the Revenue to substantiate the allegation that the appellant has actually 'collected' service tax. On the contrary, the appellant has submitted evidence to the effect that the service tax amount mentioned in the said bills / invoices are not collected, by producing the ledger accounts and also the Payment Advices, w.r.t. these 12 RA bills / invoices. We observe that the demand of service tax cannot be confirmed on the basis of a single invoice without verification of all the invoices that too when this single invoice relied upon, belies the allegation of the Revenue. In this regard, we derive support from the judgment in the case of M/s. R.S. Ispat Pvt. Ltd. and Shri Radhe Shyam Agarwal, Director M/s. R.S. Ispat Pvt. Ltd. [ 2024 (9) TMI 176 - CESTAT KOLKATA] . Since, the appellant is not the person liable to pay service tax under the category of GTA service and the evidence submitted by the appellant indicates that they have not collected service tax on this service and the appellant claims that the service recipient has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oborative from the said 3 Annexures A3 to A5 themselves since there are separate columns therein for bill amounts as well as mobilization / work advances and tax liability is created against both the entries which liabilities are confirmed by the Ld. Adjudicating Authority. We, therefore, hold that the double demand confirmed in the impugned order is not legally sustainable. Demand of service tax on supply of materials - as submitted that no service tax is payable on material supplied wherein CST has already been paid - HELD THAT:- This transaction is a pure supply of materials. However, in the impugned order, the nature of service has been indicated as Site Formation Service. In this backdrop, the appellant produced the related work order, invoice and a Chartered Accountant Certificate dated 10.03.2024, produced at the time of personal hearing. This documentary evidences submitted by the appellant reveals that material has been supplied in this transaction on which CST has been paid. Thus, we hold that no service tax is payable on this transaction involving only pure sale of materials. Accordingly, we hold that the demand confirmed in the impugned order, on this count is not susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service tax. While this is the factual position, the Ld. Adjudicating Authority cited the above two bills / invoices for the purpose of confirmation of the demand without appreciating the difference between billing and collection and without establishing that the appellant collected service tax in those two cases. As the activity of construction of road is exempted from payment of service tax as per Notification No. 25/2012-ST, fortified by the cited case law and documentary evidence placed to the effect that no Service Tax was collected by the appellant, we hold that the demand of Rs.1.49 crores confirmed in the impugned order on this count is legally not sustainable. Confirmation of demand on Commission - appellant submits that they have sub- contracted some of the work orders to the sub- contractors on back-to-back basis, in which case the appellant paid service tax on the entire contract value; while disbursing this amount to the sub-contractors, they retained their profit margin and TDS and paid the remaining amount to the sub-contractors - HELD THAT:- In the present case, from the factual details discussed on the issue, the activity would not fall under (i) to (vi) above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings on the submissions made by the appellant on this demand in the entire Order-in- Original. Thus, we hold that the demand raised in the instant notice is a double demand as the demand on this issue has already been covered in the Notice dated 17.10.2016. We accordingly hold that this demand is not legally sustainable. Demand on Eastern piling - appellant submits that the amount involved in this demand pertains to lumpsum compensation paid by them on behalf of UAIL and got reimbursed later. Thus, the submission of the appellant is that this reimbursement does not relate to any activity which is liable for service tax - HELD THAT:- There is no discussion with reference to this demand either in the notice or in the impugned order. The documentary evidence submitted by the appellant clearly reveal that M/s Eastern Piling Construction Pvt. Ltd., while executing a 33KV tower line and stringing work upto the mines top, encountered certain problems with the local villagers and negotiated with them for a lump sum compensation. For this purpose, the appellant paid the said amount to the said company and got the same reimbursed from UAIL. The documentary evidence submitted by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Contract Service . Accordingly, we hold that the appellant is eligible for the abatement 60% available to Works Contract Service . Thus, we hold that the appellant has rightly computed service tax on 40% of the value and correctly paid service tax as per the provisions relating to Works Contract Service on these three transactions. Appellant was paid service tax on 40% of the value in all these 3 cases as seen from the related payment advice. Accordingly, we hold that the demand confirmed on this count is not sustainable and hence we set aside the same. Notice issued invoking extended period of limitation - demand related to Commission received by the appellant - HELD THAT:- We observe that the present notice was issued on the heels of the earlier notice dated 17.10.2016, covering the same period; the said notice has clearly gone on record that the appellant was providing exempt / non-taxable services like bauxite are transportation, reimbursable expenditure, road works etc., and yet did not question the said clearances. We also observe that three successive audits have been conducted during the relevant period, the audit teams did not question the said transactions; in fact, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the adjudicating authority for the purpose of verification of documents w.r.t availment of CENVAT credit. Invoking extended period of limitation cannot be invoked to demand service tax and CENVAT credit - HELD THAT:- We hold that the Revenue was well aware of the issues on which demand was raised in the present proceedings much before issuance of the present notice. When the facts are in the knowledge of Revenue through audit of the accounts of the appellant as well as through the proceedings of other notice dated 17.10.2016, issued under the extended period, suppression of facts with intention to evade the tax cannot be alleged and extended period of limitation cannot be invoked. Thus, we hold that the extended period of limitation cannot be invoked to demand service tax and CENVAT credit in this case. Accordingly, we hold that in the case of all the confirmed demands discussed above, the extended period provisions could not have been invoked. Hence, we hold that the following demands in respect of the extended period i.e., upto to the year 2014-15 are not legally sustainable on account of the time bar and set aside. Appellant has charged and collected service tax from the recip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands pertain to settled issues like free supplies, reimbursable expenditure, road works, railway works and services liable to tax under RCM by the service recipient like Bauxite Ore Transportation. In addition, there are double demands on the advances, demand of service tax on supply of free material, demand on lump sum compensation paid to villagers, commission, etc. These demands are set aside on limitation front too. In this backdrop, it may not be fair to impute mala fide intention on the part of Shri T. Srinivasa Rao. Having regard to this position, we set aside the penalty of Rs. 1,00,000/- imposed on Shri T. Srinivasa Rao, GPA Holder and Authorized signatory of M/s K. V. Mohana Rao Co. Pvt. Ltd. - HON BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL) AND HON BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) For the Appellant: Shri R. Nageswara Rao, Consultant Shri T. Satyamurthy, Advocate For the Respondent: Shri S.S. Chattopadhyay, Authorized Representative Shri S. Mukhopadhyay, Authorized Representative ORDER: [PER SHRI K. ANPAZHAKAN] The present appeals have been filed against the impugned common Order-in-Original No. PRINCIPAL COMMR/DBSR/ST/27-28/2020 dated 02.09.2020 passed by the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to subsequent investigation, another show cause notice No.06/2017-18(ORNo.22/2017- 18-ST) F. No. DGCEI/VRU/INV/ST/17/2016PF-1 dated 18.11.2017, was issued to the appellant demanding service tax and CENVAT credit for the period 2012-13 to 2015-16 wherein the Revenue felt that the appellant has not paid appropriate service tax and availed ineligible credit. The appellant submitted replies to the above Show Cause Notices, vide their reply letters dated 22.11.2017 and 22.05.2019, respectively. 2.2. The said two Notices were adjudicated by the Ld. adjudicating authority vide the impugned Order- in-Original Principal Commissioner/BBSR/ST/27- 28/2020 dated 27.08.2020 (issued on 02.09.2020), wherein he has confiscated the 48 number of machineries as proposed in the Notice dated 12.06.2017. He has ordered for release of the machineries confiscated on payment of redemption fine of Rs. 50,00,000/-. The Ld. adjudicating authority has confirmed various demands of service tax as demanded in the Notice dated 18.11.2017. The demands of service tax confirmed in the impugned order are summarized in the table below: S. No. Description Demand confirmed (in Rs.) 1 Demand on Free Supply Materials sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt submits that the Revenue has quantified the said demand in Annexures A2 to A5 for the years 2012-13 to 2015-16 respectively. For the year 2012- 13, demand amounting to Rs. 1.25 crores was quantified in respect of 3 transactions including the demand of service tax on Commission received; For the remaining years, each transaction is taken into account either on the basis of RA Bill / Invoice issued by the appellant or on the basis of the Payment Advice issued by the service recipient by which the service consideration and service tax was paid to the appellant; Sum total of the tax liability of such transactions during a particular year are quantified in addition to Commission, taken on lump sum basis, for the whole year. They submit that the duty paid during the respective year as per the ST3 returns was considered and the remaining amount was proposed as demand; This is the mode adopted during the years 2013-14 to 2015-16; Accordingly, Service Tax demand of Rs. 33.84 crores was proposed in the notice and the same was confirmed in the O-I-O dated 27.08.2020 (issued on 02.09.2020). 3.2. The appellant submits that while accepting the demands as per the said Annexures in some instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 75 of Annexure A4) relating to the Red Mud Pond are double demands, in which case, para 108 of the present notice specifically states that such of those demands covered by the notice dated 17.10.2016 and relating to Red Mud Pond are excluded from the present proceedings and yet demanded the same amounts in the present notice. 3.4. The appellant then furnished their arguments in respect of the separate demands confirmed in the impugned order by segregating them under various categories, which are detailed as under: 4. Demand of Rs. 5.91 crores on Free Supply Materials(details relating to the demand are available in Annexure 7 to the notice): In respect of the demand of service tax of Rs. 5.91 Crores on the materials supplied free of cost by the service recipient, the appellant submits that the issue is settled against the Revenue by the Hon ble Apex Court vide judgement in the case of M/s. Bhayana Builders (P) Ltd. etc. [2018 (10) G.S.T.L/ 118 (SC)]. It is pointed out that the decision in M/s. Bhayana Builders (P) Ltd. has been reiterated by the Hon ble Supreme Court in the case of M/s. Jayhind Project Ltd Vs. Commr. Service Tax, Ahmadabad [2024 (388) E.L.T. 38 (SC)]. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The appellant submits that out of the 12 transactions, 4 transactions are covered by singular evidence i.e., payment advice issued by the service recipient (but not the RA bill / invoice issued by the appellant), 2 transactions are covered by one bill, of the remaining bills service tax is billed only in 2 RA Bills / Invoices. However, in respect of those 12 transactions, the service recipient has not paid the service tax to appellant. The appellant submits that in all these 12 instances, the payment advices issued by the service recipient clearly indicate that service tax was not paid to appellant; contrary to the allegation, the service tax element was not indicated in respect of the RA Bills / invoices (except in 2 cases) /payment advices. The appellant confirms that in none of the 12 transactions cited by the Revenue, the service recipient did pay service tax to the appellant. The appellant submits that they had also produced conclusive evidence in the form of depositions of the appellant and the service recipient, ledger accounts of the appellant and payment advices of the service recipient before the Ld. adjudicating authority clearly disproving the allegation of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not legally tenable upto 14.05.2015 in terms of Section 67 of the Finance Act, 1994 and in view of the Hon ble Apex Court s judgement in the case of Union of India Anr. Vs. M/s. Intercontinental consultants and Technocrats Pvt. Ltd [2018 (10) G.S.T.L. 401 (S.C.)]. It is further submitted that the appellant did not collect service tax from the service recipient in respect of this activity upto 14.05.2015 except billing service tax in one instance viz. Service Tax Invoice No. HSD/REIMB/01 dated 17.12.2014. In respect of this Invoice, the claim is as under. Deisel reimbursement bill Rs. 20,76,92,552/- Deisel for transportation under GTA Rs. 16,13,94,958/- Deisel for Mining work assessable amount for ST Rs. 4,62,97,594/- Service tax 12% on bill amount Rs. 55,55,711/- Education cess 2% on ST Rs. 1,11,114/- SHE Cess 1% on ST Rs. 55,557/- Total Rs. 21,34,14,935/- Service Tax amount Rs. 57,22,383/- According to the appellant, the said claim was honoured by the service recipient vide payment advice no. 51411435 dated 04.02.2015 and the said service tax amount of Rs. 57,22,383/- was paid to them on a value of Rs. 4,62,97,594/- only though the invoice value was of the order of Rs. 20,76,92,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of materials. In proof thereof, the appellant submitted copy of work order, related invoice and the Chartered Accountant s Certificate indicating payment of CST on the said transaction. Accordingly, the appellant submits that the demand confirmed on this count is not sustainable. 9. Confirmation of demand of Rs. 1.49 crores Road Works: 9.1. The appellant submits that construction of roads is exempted under Notification No. 25/2012-ST; the said Notification clearly exempts the services provided by way of construction of roads for the use of general public; the stand of the Revenue is that the road is a private property belonging to the service recipient and hence the benefits of Notification No. 25/2012 are not applicable to the appellant. In this regard, the appellant submits that the notification speaks of only usage of the roads by general public and it does not refer to ownership of the roads. It is the submission of the appellant that the Revenue clearly admitted to the usage of the said road by the inhabitants of 16 villages on either side of the road. Thus, the appellant submits that the exemption provided under Notification 25/2012 is available to them. 9.2. The othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant submits that the demand of Rs. 1.15 crores confirmed in the impugned order is not sustainable. 11. Railway work Demand of Rs. 49.37 lakhs: 11.1. The appellant submits that works related to Railways are exempted under Notification No. 25/2012-ST.This demand has been confirmed in the impugned order on the ground that it is a private railway line for use by UAIL. Sl. No. 14(a) of Notification No. 25/2012-ST dated 20.06.2012 envisages that all original works by way of construction, erection, commissioning or installation in relation to Railways are exempt from service tax. The Notification does not distinguish between public Railway and private Railways. Thus, the appellant submits that the services rendered in relation to railway line / siding meant for the use of UAIL would qualify for exemption in terms of Notification No. 25/2012-ST. tax. 11.2. In support of their contention, the appellant relied on the following decisions where no distinction has been made between Government Railway and Private Railway: i. Commissioner of Central Excise, Raipur vs. Anand Construction [2017 (51) S.T.R. 435 (Tri. - Del.)] ii. In Re: Rites Limited [2019 (20) G.S.T.L. 657 (A.A.R. - GST) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, the appellant submits that the demand of Rs. 12.36 lakhs confirmed in the impugned order is liable to be set aside. 14. Demand of Rs. 28.38 lakhs: 14.1. The contention put forth by the appellant is that this demand figuring at S. No. 3 of Annexure A4 is a case of double demand covered under S. No. 68 of Annexure A3 of the Notice; A perusal of S. No. 3 of Annexure A4 indicates that the demand is relied upon Work Order No.11/10639/02/1758 dated 08.07.2011 and Payment Advice No. 51400850 dated 29.04.2014. The appellant submits in this regard that the Work Order indicates that the same is for Erection and Commissioning of entire mechanical and electrical instrumentation equipment including installation of piping for a value of Rs. 7,48,07,083/-; Payment Advice No. 51400850 dated 29.04.2014 indicates the value as Rs. 7,00,43,807/-; There is a noting in hand to effect 2,29,63,675 on the said Payment Advice. The appellant submits that this is a case of double demand as the same Payment Advice has been relied upon for both the demands (S. No. 68 of Annexure A3 and S. No. 3 of Annexure A4). The appellant also submits that values of the demands at S. No. 68 of Annexure A3 and S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally and without taking the revised invoice into consideration, demanded service tax; It is their contention that no service tax was collected in this case as seen from the payment advice; Since the tax is to be payable by the service recipient and the same was already paid by him and since the appellant was not paid the said service tax, the demand on this count is liable to be set aside. 17. Works Contract Service: Confirmation of demand of Rs. 22.87 lakhs: 17.1. The appellant submits that this demand figures at S. No. 7 of Annexure A3 and S. Nos. 21 22 of Annexure A4 and that they have collected and correctly paid service tax as per the provisions relating to Works Contract Service on these three transactions related to construction of boundary wall of Red Mud Pond and installation of chain link fences around Red Mud Pond. While the nature of service is indicated as Works Contract Service against S. No. 7 of Annexure - A3 and S. No.21 of Annexure A4, it is indicated as Erection Commissioning Service against S. No. 22 of Annexure A4. In all the cases, the Revenue calculated the demand on 100% of the value. In the Notice dated 24.09.2012 issued by DGCEI, the work orders relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head wise break-up of the demand of Rs. 33.29 crores explained above are summarized below: Sl. No Details of the activity Amount of demand confirmed 1 Bauxite ore Transportation 90381558 2 Reimbursement of HSD 47857000 3 Advances (Double Demand) 106838902 4 Supply of material 19604644 5 Road Work for the period 2013-14 to 2015-16 14923377 6 Commission for the period 2013-14 to 2015-16 11554825 7 Railway Work 4937297 8 Erection, Commissioning testing (double demand) 9246156 9 Eastern piling 1236000 10 Sl. No. 3 of Annexure 4 (double demand) 2838310 11 Sl. No. 12, 17 and 16 of Annexure A-3 (double demand) 7896432 12 Hiring of Additional Dumper 779479 13 Works Contract Service 2287374 14 Annexure-A2 Demand for the year 2012-13) 12504961 332886315 19.2. The appellant submits that the difference of Rs. 55.57 lakhs pertains to the income from non- taxable activity. However, the appellant submits that they are not in a position to substantiate the service tax liability on this balance amount with proper documentation as the unit had closed its operations and offices way back in the year 2015. The appellant submits that their grievance before the Ld. Adjudicating Authority was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same service recipient under the same contract, by M/s. Mythri Infra, there is neither physical removal nor deemed removal of the said capital goods from the place where they were initially located. They contend that this position is evident from the Panchanama dated 14.12.2016 under which the seizure of the said machinery was effected; the Panchanama clearly reveals that the investigating agency has effected the seizure from the same place where the impugned capital goods were located by the appellant. The appellant further points out that no invoice was also issued as there was no physical removal of the capital goods. 20.2. The appellant submits that since there is no physical removal of the 48 numbers of the capital goods, Rule 3(5A)(a) of the CENVAT Credit Rules is not attracted as held in the following judgments: i. L.G. Balakrishnan Bros. Ltd Vs. Commissioner of Central Excise, Trichy [2016 (340) ELT 708 (Tri. Chennai)] ii. Hero Motors Ltd. Vs. Commissioner of C.Ex., Ghaziabad [2014 (310) E.L.T. 729 (All.)] iii. Dalmia Cements (Bharat) Ltd. Vs. Commissioner of C.Ex., Tiruchirappalli [2008 (224) E.L.T. 484 (Tri. Chennai)] iv. Commissioner of C.Ex., Tiruchirappalli Vs. CESTAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority also demanded duty of Rs. 3.51 crores on the said capital goods. In view of the above submissions to the effect that there was no physical removal of the said capital goods, the appellant submits that the demand of duty of Rs. 3.51 crores is not sustainable. The appellant submits that Rule 3(5A) which requires payment of an amount equal to the CENVAT Credit taken on the capital goods on removal of the same and thus, the duty demand of Rs. 3.51 crores in this case is legally not sustainable. 20.7. The appellant also submits that while the legal position stands so, the officers, during the course of investigation, persuaded the appellant for payment of the amount in terms of Rule 3(5A) of the CENVAT Credit Rules; hence the appellant paid an amount of Rs. 3,25,57,169/- towards the demand along with interest thereon amounting to Rs. 56,06,076/- in cash vide challan dated 22.12.2016; The said amount was paid during the investigation proceedings along with interest much prior to the issuance of the notice. 20.8. In view of the above said legal position, the appellant submits that confiscation of the machinery, imposition of redemption fine of Rs. 50 lakhs, demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before issuance of the notice; In view of Section 73(3) of the Finance Act, 1994 and settled case law on the subject in the case of Shri Selvakumar Textiles Vs. Commissioner of C.Ex., Coimbatore [2005 (188) E.L.T. 334 (Tri.-Chennai)], the appellant contends that the proceedings conclude and there is no need for the Revenue to issue any notice; Hence this part of the demand is not legally sustainable. The appellant also submits that the total demand fails on limitation front also. In view of the above submissions, the appellant prayed for setting aside the demand of Rs. 1.36 crores confirmed in the impugned order, as they are not contesting the remaining demand of Rs. 1.86 crores confirmed in the impugned order. 22. Confirmation of CENVAT Credit demand of Rs. 69.07 lakhs on inputs and input services: 22.1. The Ld. adjudicating authority confirmed this demand on the ground that the appellant had taken excess credit in certain cases and in some other cases availed credit either without supporting documents or in the absence of proper duty payment documents. The demand was raised for 3 years 2013-14, 2014- 15 2015-16 and the demand details are provided in the Annexures C-1, C-2 C-3 res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Infra submitted that the Notice dated 12.06.2017 proposed confiscation of the machinery, to which M/s Mythri Infra is a party. However, there was no proposal of imposition of penalty under Rule 25 of the Central Excise Rules, 2002, read with Section 78 of the Finance Act, 1994, in the said Notice. In the second notice dated 18.11.2017, proposing demand of duty / CENVAT credit, M/s. Mythri Infra is not a party to this notice. However, vide impugned order, the adjudicating authority imposed mandatory penalty of Rs. 3.51 crores on M/s Mythri Infra. Thus, the adjudicating authority has traversed beyond the ambit of show cause notice. Hence, it is submitted that the impugned penalty on M/s. Mythri Infra is not legally sustainable; No notice under the proviso to sub- Section (1) of Section 73, has been served on M/s Mythri Infra. Hence, it is contended that they are not liable to penalty in terms of Section 78 of the Finance Act. 24.1. Shri. Srinivasa Rao, GPA Holder Authorized Signatory submitted that he is neither a Director, Manager, Secretary in the company. He was merely a General power of Attorney Holder. A General power of Attorney holder is merely an agent who acts on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax in the bills; Even though the appellant claimed that they have not collected the service tax from the clients, the said facts have not been verified by the adjudicating authority. Regarding the appellant s claim of reimbursable expenses are not includable for the purpose of computation of service tax, the Ld. Authorized Representative of the Revenue submits that the nature of reimbursable expenses needs to be verified by the adjudicating authority. Accordingly, he submits that these issues need to be remanded back to the adjudicating authority for the purpose of verification before determining their eligibility for the exemption. 25.1. Regarding confiscation of the capital goods, it is his submission that as per the Novation Agreement dated 29.10.2015, all assets have been transferred to M/s. Mythri Infra; Since the appellant has sold these 48 numbers of capital goods to Mythri Infra, they are liable to reverse CENVAT Credit proportional to the depreciated value; Since, the appellant has not reversed the proportional CENVAT credit, the ld. adjudicating authority has rightly confiscated the capital goods and imposed redemption fine and penalty on Mythri Infra in the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged service tax in the bills raised by them. In this regard, the appellant relied on Section 12B of the Central Excise Act, which is made applicable to service tax and contended that once service tax is charged in the invoice, the same is payable in the next month in which bill/invoice was issued. Subsequent less realization may be adjusted by an assessee. But after issuing invoice, there is no justifiable reason for not showing that liability in the return and non-payment of tax. (iii) Regarding the demand under Rule 3(5A) of the CCR 2004 payable on capital goods sold without payment of appropriate amount along with confiscation and penalty, the Ld. Departmental Representative submitted that this issue has been dealt by the Adjudicating authority in para 5.45 to 5.48 giving clear findings with legal propositions which were not refuted by the Appellant before the Tribunal. In this regard, the he relied upon the decision in the case of CCE, Belgaum Vs Associated Cement Co Ltd [2009(236) ELT 240(Kar)] wherein the Hon ble High court of Karnataka has decided a similar issue in favour of department. The Kolkata Bench of CESTAT also decided a similar issue in favour of Revenue in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to justify validity of entire credit taken on capital goods, inputs and input services. They admitted a major portion of credit was availed irregularly. In view of the above submissions, the Ld. Authorized Representative of the Revenue supported the confiscation of the impugned capital goods, confirmation of the demands of service tax, CENVAT Credit, interest and imposition of penalties in the impugned order. (vi) Regarding invocation of extended period of limitation, the Ld. A.R. of the Revenue submits that detailed findings in this regard has been given by the Ld. Adjudicating Authority in para 5.54 of the Impugned Order. He also submits that the appellant has deliberately availed benefits of notifications without fulfilling the terms and conditions laid therein. They charged and collected service tax but not deposited to the government exchequer deliberately. They resorted to maintain false books of accounts by non-accounting huge turnover in their audited P L account. They availed and utilized excess CENVAT Credit on capital goods, inputs and input services and a major portion of the same is admitted by them. There are sufficient evidences on record to show their mala fide inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Utkal Aluminium. As per the agreement, the impugned capital goods 48 in number got transferred to Shri T. Srinivasa Rao in 'as is where is' condition in the same premises where they were located earlier for execution of the same work which was still remaining to be executed. As the remaining service is to be executed to the same service recipient under the same contract, by Mythri Infra, there is neither physical removal nor deemed removal of the said capital goods from the place where they were initially located. We observe that this position is evident from the Panchanama dated 14.12.2016 under which the seizure of the said machinery was effected. The Panchanama clearly reveals that the investigating agency has effected the seizure from the same place where the impugned capital goods were located and used by the appellant. We also observe that no invoice was issued as there was no physical removal of the capital goods. Even if there is a sale involved in the transaction, the question of reversal of CENVAT Credit on the depreciated value in terms of Rule 3(5A) of the CCR 2004, would arise only at the time of removal of the capital goods. It is a fact on record that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987 (32) E.L.T. 234 (S.C.)] the Hon ble Supreme Court held that removal means physical movement of the goods and it contemplates shifting of a thing from one place to another; in other words, it contemplates physical movement of goods from one place to another; in the present case, there was no physical movement of the capital goods from the place of their location to another place. The relevant part of the said decision is reproduced below: 38. It is submitted on behalf of the appellants that the Explanations to Rule 9 and Rule 49 are ultra vires the provision of Clause (b) of sub-section (4) of Section 4 of the Act inasmuch as place of removal as defined therein, does not contemplate any deemed removal, but a physical and actual removal of the goods from a factory or any other place or premises of production or manufacture or a warehouse etc. This contention is unsound and also does not follow from the definition of place of removal . Under the definition place of removal may be a factory or any other place or premises of production or manufacture of the excisable goods etc. The Explanations to Rules 9 and 49 do not contain any definition of place of removal , but provide that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h were not finished. The same equipment which was used to render the service will be continued to be used by M/s. Mythri Infra to undertake the same work which was earlier assigned to M/s. K. V. Mohana Rao Company. From the Novation Agreement it is evident that there was no intention to remove the machinery, even though the same were transferred to M/s. Mythri Infra. We agree with the inference of the Ld. Authorized Representative of the Revenue that the word removal is to be understood in the context in which it is used. In the present context, there was no need for removal of the machinery as the same were continued to be used by M/s. Mythri Infra, to execute the same Work Order. Thus, we observe that the removal of the machinery was not even intended in the Novation Agreement. Accordingly, we hold that the decisions referred by the Ld. Departmental Representative are not relevant to the present case on hand. 27.7. In view of the above discussions and by relying on the decisions cited above, we hold that the confiscation order in respect of the capital goods [48 in number] is not legally sustainable. Since, the confiscation of the capital goods is legally not sustainable, the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in respect of each invoice, details such as the name of the manufacturer, description of the capital goods are provided. On a comparison of both the said Annexures, we observe that the demands in respect of 19 invoices have been noticed in both the Annexures B2 B3 revealing that such demands figuring in Annexure B2 are double demands since they already exist in Annexure B3. The appellant submitted that this position is clearly explained in the form of a detailed statement on Pages 137 138 of Vol. I. For a fair appreciation of this issue, the said statement is reproduced hereunder. Invoice No date Description of goods Details of Demand Sl. No of Anne xure B-2 Demand Sl. No of Annex ure B-3 Demand 48/25.08.2012 BEML BH 60M Rear Dumper 1 1013520/- 32 1368252/- 50/27.08.2012 BEML BH 60M Rear Dumper 2 1013520/- 33 1368252/- 52/27.08.2012 BEML BH 60M Rear Dumper 3 1013520/- 34 1368252/- 54/28.08.2012 BEML BH 60M Rear Dumper 4 1013520/- 35 1368252/- 65/30.08.2012 BEML BH 60M Rear 5 1013520/- 36 1368252/- 66/31.08.2012 BEML BH 60M Rear 1 1013520/- 37 1368252/- 7888967/7.9.2012 EC700C L (Volvo Excavat or) 7 2419334/- 38 2244281/- 200550/15.9.2012 IDM 30 Blast hole Driller 8 12,54,540/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, the proceedings conclude and there is no need for the Revenue to issue any notice. This view has been held in the case of Shri Selvakumar Textiles Vs. Commissioner of C.Ex., Coimbatore [2005 (188) E.L.T. 334 (Tri.-Chennai)]. We observe that the appellant has paid this Rs. 1.86 crores before issue of the notice. As this amount is not being contested by the appellant, we uphold the demand of service tax of Rs. 1.86 crores along with interest. We uphold the appropriation of this amount along with interest in the impugned order. As the appellant has paid this Rs. 1.86 crores along with interest before issue of the Notice, in terms of Section 73 (3) of the Finance Act 1994, we hold that no penalty is imposable on the appellant on this amount of Rs. 1.86 crores. Demand of Rs. 5.91 crores on free supply material: 29. Regarding the remaining demands confirmed in the impugned order, we observe that demand of service tax of Rs. 5.91 Crore has been confirmed in the impugned order on account of materials supplied free of cost by the service recipient. We observe that the issue is settled against the Revenue by the Hon ble Apex Court vide judgement in the case of M/s. Bhayana Builders (P) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended and amended provisions of Section 67 ibid. Further, the appellant herein had received the entire consideration for provision of service in monetary terms. Hence, it cannot be said that it was not properly able to determine the value of taxable service, in order to attract the provisions of Rule 3 (b) of the Service Tax (Determination of Value) Rules, 2006. Similarly, the provisions of Rule 5 ibid also would not attract in this case inasmuch as no cost of fuel was charged or billed by the appellant to the recipient of service. 8. We find that the issue arising out of the present dispute is no more res integara, in view of the judgement of Hon ble Supreme Court in the case of M/s. Bhayana Builders (P) Ltd.(supra), relied upon by the learned Advocate for the appellant. The relevant paragraphs in the said judgement are extracted herein below: 11. As already pointed out in the beginning, all these assessees are covered by Section 65(25b) of the Act as they are rendering construction or industrial construction service , which is a taxable service as per the provisions of Section 65(105)(zzq) of the Act. The entire dispute relates to the valuation that has to be arrived at in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt charged and the service provided. Therefore, any amount charged which has no nexus with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable under Section 67. The cost of free supply goods provided by the service recipient to the service provider is neither an amount charged by the service provider nor can it be regarded as a consideration for the service provided by the service provider. In fact, it has no nexus whatsoever with the taxable services for which value is sought to be determined 13. A plain meaning of the expression the gross amount charged by the service provider for such service provided or to be provided by him would lead to the obvious conclusion that the value of goods/material that is provided by the service recipient free of charge is not to be included while arriving at the gross amount simply, because of the reason that no price is charged by the assessee/service provider from the service recipient in respect of such goods/materials. This further gets strengthened from the words for such service provided or to be provided by the service provider/assessee. Again, obviously, in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Authority has travelled beyond the ambit of show cause notice in as much as there is no such allegation (collection of tax) in respect of free supplies in the notice. Accordingly, we hold that confirmation of demand of Rs. 5.91 crores on the strength of this single invoice, which is not relatable to free supplies, is legally not sustainable. 29.2. The appellant has factually proved that the amount received is only on account of reimbursements and not as part of any consideration. Considering the factual matrix with the ratio laid down the cited decisions, we hold we hold that the demand of service tax amounting to Rs.5.91 crores confirmed in the impugned order on this count is not sustainable and hence we set aside the same Service tax demand of Rs. 33.84 crores: 30. Regarding the demand of service tax of Rs. 33.84 crores, we observe that this is a combined demand covering service tax on various categories. The break-up of this demand and examination of the evidence available with respect to each demand is as below: 30.1. Bauxite Ore Transportation: Demand Rs. 9.03 crores. 30.1.1. This demand has been confirmed on the Goods Transport Agency (GTA) service rendered by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the allegation against them that they have collected service tax under the category of GTA service. Further, we observe that the charge in the show cause notice is that the appellant has billed the service tax amount in the 12 RA bills / invoices raised by them. However, there is no evidence adduced by the Revenue to substantiate the allegation that the appellant has actually 'collected' service tax. On the contrary, the appellant has submitted evidence to the effect that the service tax amount mentioned in the said bills / invoices are not collected, by producing the ledger accounts and also the Payment Advices, w.r.t. these 12 RA bills / invoices. 30.1.3. We observe that the demand of service tax of Rs. 9.03 crores cannot be confirmed on the basis of a single invoice without verification of all the invoices that too when this single invoice relied upon, belies the allegation of the Revenue. In this regard, we derive support from the judgment in the case of M/s. R.S. Ispat Pvt. Ltd. Vs. CCE, Kolkata-IV and Shri Radhe Shyam Agarwal, Director M/s. R.S. Ispat Pvt. Ltd. Vs. CCE, Kolkata-IV, 2024 (9) TMI 176 CESTAT Kolkata. Since, the appellant is not the person liable to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a statutory notification, may physically consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work of fiction/non-fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative drafting and latter one is to be found in the various principles of interpretation of statutes . Vis- a-vis ordinary prose, a legislation differs in its provenance, layout and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This invoice indicates the following position. Deisel reimbursement bill Rs. 20,76,92,552/- Deisel for transportation under GTA Rs. 16,13,94,958/- Deisel for Mining work assessable amount for ST Rs. 4,62,97,594/- Service tax 12% on bill amount Rs. 55,55,711/- Education cess 2% on ST Rs. 1,11,114/- SHE Cess 1% on ST Rs. 55,557/- Total Rs. 21,34,14,935/- Service Tax amount Rs. 57,22,383/- 30.2.3. It can be seen from the above documents that the total reimbursement bill on HSD upto 17.12.2014 was Rs. 20,76,92,552/- out of which advance received upto that date amounting to Rs. 18,88,65,202/- was adjusted and the remaining amount was paid to the appellant. We observe that as per the Payment Advice No.51411435 connected to this invoice, service tax amounting to Rs. 57,22,383/- only (on a value of Rs. 4,62,97,594/-) was reimbursed but not on the entire value of Rs. 20,76,92,552/- which amount is inclusive of the advances received by the appellant under this head upto this date. The appellant submitted that except this one bill, they have not raised service tax in any other bills of diesel reimbursements. We thus observe that the investigation has not brought in any other evidence to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant furnished details of 28 final RA bills / invoices (pages 61 to 63 of Vol. I) by which the said advances were adjusted and the remaining amount was paid to the appellant as is clear from the corresponding payment advices issued by the service recipient. While this is the factual position, the Revenue demanded service tax on the entire gross value in respect of the above 28 instances as seen from the said table as well as the respective entries in the Annexures A3 to A5 of the Show Cause Notice. From the documents (payment advices) submitted by the appellant, we find that when they raise the final bill, the advance component is adjusted and the remaining amount only was paid to them. We observe that the ld. adjudicating authority has confirmed this demand by taking into account the gross value again in the impugned order without considering the factual position that the said advances were adjusted from the gross values of the said final bills / invoices that would make it as a double demand on the advances. The appellant submitted each of the above cited 28 RA bills / invoices and the corresponding payment advices issued by the service recipient in support of their stand of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany Limited vs. CCE, Hyderabad (supra) and CESTAT Mumbai in the case of Thermax Instrumental Limited vs. CCE (supra) held that mobilization advance received by the assessee is not chargeable to service tax, if it is in the nature of an advance. On this ground, the demand under this head also needs to fail 30.3.5. In view of the above factual position and the cited case law, we hold that the demand confirmed in the impugned order on this count (mobilization advance) is not sustainable. 30.3.6. In respect of mining advances, the appellant submitted the details of demands made on such advances on page 64 of Vol. I. The amount received under the mining advances head was of the order of Rs. 55,79,44,031/- and the demand from the Revenue on this count is Rs. 3,55,89,882/- as per the said details. The said advances were adjusted under 13 RA bills / invoices details of which are provided on pages 64 65 of Vol. I. The related entries of Annexures A3 to A5 indicate that tax liability is created on the total gross value of the said final bills / invoices without considering the fact that the above cited mining advances were adjusted in the said bills / invoices and the remaining amounts al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alues of the final bills / invoices, which values include the advance amounts and the appellant has been paid the remaining amount after adjusting the said advances from the final bills / invoices. This fact of double demand is corroborative from the said 3 Annexures A3 to A5 themselves since there are separate columns therein for bill amounts as well as mobilization / work advances and tax liability is created against both the entries which liabilities are confirmed by the Ld. Adjudicating Authority. We, therefore, hold that the double demand of Rs. 10.68 crores confirmed in the impugned order is not legally sustainable. 30.4. Confirmation of demand of Rs. 1.96 crores on supply of material: 30.4.1. We observe that in this regard, the appellant submitted that this is a case of demand of service tax on supply of materials. They have submitted the evidence of a specific payment advice (page no. 500 of Vol. IV) which is mentioned in S. No.5 of Annexure - A4 to the Notice, which contains the following details: Payment Advice No.51401372 dated 15.05.2014. Name of Client: M/s UAIL. Work / Service description: Supply of Material for construction of Red Mud Storage Dam. Work Order No. 2100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d road is used by the local villagers for years together even before setting up of the plant and before acquiring the ownership of the mines road by M/s UAIL. Thus, we find that the evidence available on record clearly indicates the usage of the said road by the inhabitants of 16 villages on either side of the road. 30.5.3. The issue that construction of road used by general public is not subject to service tax, has been dealt in the following case laws : i. Commr. of Cus. C. Ex., Raipur vs. National Project Construction Corpn. Ltd. [2020 (42) G.S.T.L. 75 (Tri. - Del.)] ii. Rajendra Singh Bhamboo vs. Commr. of C. Ex. S.T., JAIPUR-I [2019 (22) G.S.T.L. 278 (Tri. - Del.)] 30.5.4. The Tribunal Delhi in the case of Commr. of Cus. C. Ex., Raipur vs. National Project Construction Corpn. Ltd.(supra) has held as under : 9. Having considered the rival contentions, we hold that under the admitted facts and circumstances in this appeal, the service rendered by the appellant is taxable only and the category of works contract service in view of the law laid down by Hon ble Supreme Court in Larsen Toubro (supra). Secondly, we hold that the work relating to road construction, even in the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. We thus observe that the Revenue has not brought in any evidence to substantiate the allegation that the appellant has actually collected the service tax. While this is the factual position, the Ld. Adjudicating Authority cited the above two bills / invoices (paragraphs 5.33.2 5.33.4 of O-I-O - page nos. 243 245 of Vol. I) for the purpose of confirmation of the demand without appreciating the difference between billing and collection and without establishing that the appellant collected service tax in those two cases. 30.5.6. As the activity of construction of road is exempted from payment of service tax as per Notification No. 25/2012-ST, fortified by the cited case law and documentary evidence placed to the effect that no Service Tax was collected by the appellant, we hold that the demand of Rs.1.49 crores confirmed in the impugned order on this count is legally not sustainable. 30.6. Confirmation of demand of Rs. 1.15 crores on Commission: 30.6.1. We observe that the appellant has sub- contracted some of the work orders to the sub- contractors on back-to-back basis in which case the appellant paid service tax on the entire contract value. While disbursing this amount to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods or services, which are inputs for the client; or (v) production or processing of goods for, or on behalf of, the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision and includes services as a commission agent, but does not include any activity that amounts to manufacture of excisable goods but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of section 2 of the Central Excise Act, 1944. Explanation. For the removal of doubts, it is hereby declared that for the purposes of this clause, (a) commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person (i) deals with goods or servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reading as work in connection with railway siding for use by UAIL / ST not billed (wherein this demand was proposed) admitted that ST was not billed in this case. We observe that the services rendered to Railways are exempted under Notification No. 25/2012-ST. We observe that this demand has been confirmed in the impugned order on the ground that the services rendered by the appellant are related to private railway lines. We observe that Sl. No. 14(a) of Notification No. 25/2012-ST dated 20.06.2012 envisages that all original works by way of construction, erection, commissioning or installation in relation to Railways are exempt from service tax. As per Section 2(31)(b) of Indian Railways Act, 1989, all lines of rails, sidings, or yards, or branches used for the purpose of, or in connection with a railway; are considered as part of railways only. We observe that this definition clearly indicates that even private sidings / lines are deemed to be railway sidings / lines. Accordingly, we observe that this definition clearly confirms that the services rendered in relation to railway line / siding meant for the use of UAIL would qualify for the exemption in terms of Notification No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that this is a double demand as the same demand related to construction of Red Mud Pond has been raised in the Show Cause Notice dated 17.10.2016. We have perused the Show Cause Notice dated 17.10.2016 issued to the appellant and the Annexure 9 appended thereto (page no. 569 of Vol. IV). We observe that paragraph 108 of the present Show Cause Notice dated 18.11.2017 clearly states that the income relating to red mud pond has been covered in the Notice dated 17.10.2016 and that the same are excluded from the present proceedings. We observe that the present demand is covered by S. No. 68 of Annexure A3 and S. No. 75 of Annexure A4 wherein details of the related two invoices are provided. Exactly the same two demands figure in the last two entries in Annexure 9 to the Show Cause Notice dated 17.10.2016 clearly revealing that it is a double demand. We observe that the Ld. adjudicating authority has not given any findings on the submissions made by the appellant on this demand in the entire Order-in- Original. Thus, we hold that the demand raised in the instant notice is a double demand as the demand on this issue has already been covered in the Notice dated 17.10.2016. We accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame Payment Advice has been relied upon against both the serial numbers i.e., S. No.68 of Annexure A3 and S. No. 3 of Annexure A4. Accordingly, we hold that this is a double demand which is already a part of the demand raised in the Notice dated 17.10.2016 also as seen from the discussion in para 30.8 supra. Thus, we hold that the demand of Rs. 28,38,310/- confirmed in the impugned order is not sustainable and hence the same is set aside. 30.11. Confirmation of Demand of Rs. 78.96 lakhs: 30.11.1. The appellant submitted that this is a double demand on the advances received and the tax thereon was paid earlier at the time of receipt of advance. This demand relates to S. Nos 12, 16 17 of Annexure A3. The total demand of the 3 invoices shown as liability is Rs. 1,50,74,782/- (36,78,374 + 68,19,229 + 45,77,179). In respect of the above 3 transactions, the appellant obtained advances amounting to Rs. 7.47 crores (2cr + 4.47cr + 1cr) during the year 2011-12. The Appellant claimed that they have already paid service tax amounting to Rs. 46,85,866/- under challan no. 127 dated 30.07.2012 and Rs. 22,89,746/- under CENVAT Credit on the said amounts. The appellant submitted the related ledger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity undertaken is not liable to service tax at the hands of the appellant, the demand is not legally sustainable on merit. 30.12.2. We observe that the Original Authority cited invoice no. 40 dated 22.05.2016 in para 5.35 (vi) of the O-I-O - page 250 of Vol. I for the purpose of confirming this demand. It is on record that this invoice was cancelled and a revised invoice was issued for which no service tax was paid by the service recipient to the appellant. This citation therefore will not be of any help to the Revenue. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable and hence we set aside the same. 30.13. Works Contract Service: Confirmation of demand of Rs. 22.87 lakhs (S. No. 7 of Annexure A3 and S. Nos. 21 22 of Annexure A4 pages 123, 127 128 of Vol. V): 30.13.1. The appellant submitted that the activities undertaken by them are related to construction of boundary wall of Red Mud Pond and installation of chain link fences around Red Mud Pond. (S. No. 7 of Annexure A3 and S. Nos. 21 22 of Annexure A4 pages 123, 127 128 of Vol. V). These services are appropriately classifiable as Work Contract Service and accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.1. We observe that this demand, pertaining to 3 transactions, details of which are available on Annexure A2 appended to the notice (page 122 of Vol. V). 30.14.2. Transaction against S. No.1 relates to Earth work for Railway embankment between Tikri Station to UAIL Plant. This work in connection with railway siding is not taxable as discussed in para 30.7 supra. The appellant submitted that they have paid service tax in respect of this transaction to the exchequer in the normal course. In support of their claim, they submitted invoice no. 1 dated 03/04.09.2012 of the Annexure A2, Payment Advice No. 31403356 dated 12.09.2012 and connected tax payment challan no. 106 dated 27.09.2012 (pages 129 131 of Vol. III). We observe that these documents evidence that the appellant has paid the service tax on this transaction. 30.14.3. The next demand relating to S. No. 2 of the Annexure A2 is related to road works. In view of the discussions at paragraph 30.5 supra, the appellant is eligible for the benefit of exemption Notification No. 25/2012. Accordingly, we hold that the demand confirmed in the impugned order relating to road construction activities is not sustainable. 30.14.4. Another p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Nizam Sugar Factory v. Collector of Central Excise, A.P. [2006 (197) E.L.T. 465 (S.C.)]. Accordingly, we hold that the confirmed demand in respect of extended period, out of Rs. 55.57 lakhs is not sustainable and hence, we set aside the same on the ground of limitation. 31. Confirmation of CENVAT credit demand of Rs. 69.07 lakhs on inputs and input services: 31.1. We observe that the above demand has been raised for 3 years 2013-14, 2014-15 2015-16 - and the demand details are provided in the Annexures C-1, C-2 C-3 as Rs. 43,66,149/-, Rs. 12,15,906/- Rs. 13,25,621/- respectively. 31.2. This demand has been confirmed in the impugned order on the ground that the appellant had taken excess credit in certain cases and in some other cases availed credit without any supporting documents / proper duty paid documents. This demand has been challenged by the appellant on merit front as well as limitation front. 31.3. In respect of this demand, the appellant vehemently contended that the demand fails on limitation front in view of the successive audits and another Show Cause Notice dated 17.10.2016, issued under extended period. It is their plea, when the service tax audit raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de ST3 return: 0 14,50,755 14,50,755 Total Input / Input Service credit declared as taken during 2015-16 vide ST3 returns by M/s KVMR Co Pvt. Ltd.: 11,44,183 16,19,665 27,63,848 Input / Input Service credit pertaining to 2015-16 towards which M/s KVMR Co. Pvt. has submitted duty payment documents during the course of investigation as detailed above 22,77,863 2,94,044 25,71,907 Total Input / Input Service credit taken without support of duty payment documents / in excess of the eligible credit as evidenced by duty payment documents for the year 2015-16 0 13,25,621 13,25,621 31.7. In this regard we find that the demand has been computed as per Annexure C3. A perusal of Annexure C3 shows that there is a mismatch between the CENVAT credit availed as inputs and input services . Both inputs and input services put together the appellant produced documents evidencing availment of credit of Rs. 25,71,907/- as against the availment of credit of Rs. 27,63,848/-. This has been accepted by the department in the Annexure C3. However, we observe that the department has taken the difference between Rs. 16,19,665/- and Rs. 2,94,044/-, amounting to Rs. 13,25,621/-, as the ineligible credit for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble and non-taxable services etc., of the appellant in relation to their transactions covering the period 2011-12 to 2014-15, which the appellant complied with. Various objections were raised including payment of service tax, interest, reversal of CENVAT Credit. From the correspondence, we observe that the department is very well aware of the free supply materials, reimbursable claims, exemptions availed by the appellant on roads, railways and non- payment of service tax on Bauxite ore transportation, commission etc. 32.2. The Investigating Officer who investigated the case pertaining to the show cause notice dated 17.10.2016 also called for various documents like invoices, bills, supplementary invoices, debit notes, reimbursement claims, form 26AS and audited annual balance sheets and P L accounts for the same period as of above. This notice clearly acknowledges: .. the noticee have executed various works like construction of Road, Mining and Transportation of Bauxite .. . (para 3.2) . in as much as on many of such output services like construction of Roads, Transportation of ores, etc., which consumed the above labour expenses, they have not paid any service tax claiming exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came up with a contention that the demand for the year 2015-16 falls under the normal period. The appellant, in their comments, in response to the above, admitted the contention of the former. In dealing with this demand, the appellant, making the Annexure A5 to the notice, covering this demand, as the basis, came up with their arguments and furnished the details of demand in two annexures Annexure I II. In the Annexure I, the appellant provided the details of invoice-wise demands of Annexure A5 to the notice wherein they agreed with the tax liabilities shown by the department in the Annexure A5. In other words, they have no dispute with regard to the demand in respect of 39 invoices detailed in Annexure I made by the appellant. The appellant contested the demand in respect of the remaining 12 invoices, details of which are provided by them in the Annexure II. Broadly, the reasons for disagreement are provided as under: Mobilization advance on which the appellant paid tax when it was received, was subjected to tax for a second time in respect of 6 invoices, wherein tax liability was indicated on the total gross value of the final bill without considering the adjustment of mobilizat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 30.6 supra. 33.5. Thus, we observe that out of the total service tax liability of Rs. 11,81,97,28/- for the Financial year 2015-16, the appellant has paid service tax amounting to 8,93,40,239/-, which is not in dispute. The balance amount of Rs. 2,88,57,048/- is part of the impugned demand under various heads. These issues are discussed in various headings in Paragraph 30 supra. According to the appellant, all these demands fall under the categories of double demands / exempted services / services leviable to tax under RCM, which are discussed in paragraph 30 supra. The break-up figures for the normal period under each of the categories discussed in paras 30 needs to be verified. If they fall within the categories, held as double demands / exempted services / services leviable to tax under RCM in this order, set aside by us on merits, then there won t be any liability on the appellant. Accordingly, the demand for the normal period of limitation as quantified by the appellant is remanded back to the adjudicating authority to verify the correctness of their claim under each of the categories claimed by the appellant in terms of the above directions. 34. We observe that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en paid by the recipient, then Service Tax has been discharged by the appellant. Further, we observe that the provisions of Section 12B of the Central Excise Act, 1944 is not relevant as the same are applicable for refund of duty collected. 34.2. We examined the issues involved in the impugned order on the basis of the above observations mentioned in para 34.1 supra. We observe that in respect of some of the issues such as inclusion of the value of free supply materials and reimbursable expenditures in the assessable value, liability of service tax on road works and railway works and service tax liability on goods transportation where the liability of payment of service tax is under RCM by the service recipient, the appellant has raised service tax in some of the bills / invoices. The liability of service tax on all these activities have been discussed in paras 30.1 to 30.14. The appellant submitted that in respect of the cases where they have billed the service tax in the bills / invoices and collected the same from the service recipient, they have paid the same to the exchequer. However, in many cases, even though they have billed service tax in the bills / invoices initially, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 78A of the Finance Act, 1994. 35.1. The appellant, Shri M. V. Ravichandra, in his reply to the notice as well as the appeal filed before this Tribunal elaborately relied upon the reply / appeal filed by the main appellant, M/s K. V. Mohana Rao Co. Pvt. Ltd and came up with a plea that if the contents of the appeal are taken into consideration, no demand subsists on merit as well as on limitation, in which case there is no contravention of the provisions of the Act the Rules made thereunder. It is his further plea that in terms of Section 78A ibid, the personal liability thereunder arises only when the person concerned was knowingly concerned with the specified contraventions and that from the alleged non-payment of service tax by the main appellant the intention of the appellant to evade service tax cannot be presumed without any evidence on his involvement and intention to evade tax. According to him, there was no mala fide on his part and that the mere being Managing Director of the company itself is not a ground for imposition of penalty in terms of Section 78A ibid. 35.2. From the discussions in the foregoing paragraphs, we have set aside almost all the demands on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohana Rao Co. Pvt. Ltd. 36. In view of the above findings, we pass the following order: (i) We set aside the confiscation of the 48 numbers of capital goods and the redemption fine of Rs. 50 lakhs imposed in the impugned order. The demand of Rs. 3.51 crores confirmed on this machinery against M/s K. V. Mohana Rao Company Pvt. Ltd., is set aside. The Penalty of Rs. 3.51 crores imposed on both M/s K. V. Mohana Rao Company Pvt. Ltd., and M/s. Mythri Infra is not sustainable and hence the same are set aside. (ii) Out of the demand of Rs. 3.22 crores confirmed, we uphold the demand of Rs. 1.86 crores along with interest paid by the appellant. We set aside the demand of Rs. 1.36 crores, part of the demand of Rs. 3.22 crores, on merit as well as on time bar. No penalty is imposable on the demand of Rs. 1.86 Crores paid, as it was paid before issue of the Notice. (iii) The demand of service tax of Rs. 5.91 crores, confirmed in the impugned order on account of materials supplied free of cost by the service recipient, is set aside on merit as well as on limitation. (iv) The demand of service tax of Rs. 33,28,86,315/- crores confirmed in the impugned order on various services, is set aside o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
