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TMI Blog2024 (12) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... cts in any manner with an intention to evade payment of service tax. Moreover, for the very same service, demand was made for different periods by issuing different show-cause notices by invoking extended period of limitation. Similar demand was made for the period from 2012-13 to 2015-16 and after considering the submissions, adjudication authority vide Order-in-Original No. 38/2021 dated 30.07.2021 dropped the demand. As held by Hon ble Supreme Court in the matter of Pushpam Pharmaceuticals Company Vs. CCE, Bombay [ 1995 (3) TMI 100 - SUPREME COURT] , wilful suppression does not mean any omission and that the act must be deliberate - thus, demand by invoking the extended period of limitation is unsustainable. Whether the Appellant is liable to pay service tax on 'Cleaning activity' services provided to Indian Railway and other public sector undertaking? - HELD THAT:- The issue is no more res integra. As per the decision of the Hon ble Madras High Court in the matter of M/s. Premier Garment Process Vs. CCE ST, Chennai [ 2022 (10) TMI 881 - MADRAS HIGH COURT] , the issue is settled and the activities of the Appellant are subject to service tax. Similar view was taken in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of law, the service tax is payable by the service recipient under reverse charge. Whether the appellant is eligible for the benefit of Notification No. 30/2012-ST dated 20.06.2012? - HELD THAT:- The appellant is eligible for the benefit of N/N. 30/2012-ST dated 20.06.2012 and cum-tax benefit as held by adjudication authority as per Section 67(2) of the Finance Act, 1994. Adjudication Authority is directed to complete the De-novo Adjudication within 3(three) months after the receipt of this order by extending a reasonable opportunity for personal hearing to the appellant. Conclusion - The matter remanded to the Adjudication Authority to quantify the service tax liability against 'cleaning activity' services, Manpower Recruitment or Supply Agency' Services for the normal period considering the date of issue of each show cause notice - As regards gross amount as consideration, the adjudication authority shall consider the contract against each service to ascertain whether the contract entered between Appellant and recipient of service are falling under the category of pure agent and if falling under the category of pure agent, said consideration should be excluded from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax, Rs. 25,449/- as education cess and Rs. 2778/- as short paid against service tax under the category of Manpower Recruitment or Supply agency' Services for the same period. Though the adjudication authority confirmed demand of interest, he refrained from imposing penalty. Aggrieved by said order, an appeal was filed before Commissioner (Appeals) and Commissioner (Appeals) as per order dated 12.05.2015 rejected the appeal. Aggrieved by the said order, Appeal No. ST/21947/2015 was filed by the Appellant before this Tribunal. 3. Appeal No. ST/21861/2018 was filed by the Department against show-cause notice dated 31.03.2015 issued alleging that the appellant had short paid service tax to the tune of Rs. 14,99,660/- under the category of Cleaning activity' Services and Manpower Recruitment Services . Further on the same issue, subsequent notice was issued for the period from April 2015 to March 2017 on 13.04.2018 demanding service tax of Rs. 11,09,18,143/- along with interest and proposing penalties, alleging that the service rendered by the appellants is falling under the category of other Taxable Services . However, the Adjudication Authority dropped the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus it is intended for locomotion and service tax demanded for the above activity under the said heading is unsustainable. 7. As regarding the activity of secondary packing of the Condoms carried out for M/s HLL Life Care, Learned counsel submitted that the condoms are manufactured and primarily packed in Aluminium foils and then each condom is packed into small packets, which are further packed as per the market requirement. These packings are essential requirement of manufacturing and as per the definition of packing activity under Section 65(76b), packing activity means 'packaging of goods including pouch filling, bottling, labelling or imprinting of the package, but does not include any packaging activity that amounts to manufacture within the meaning of Clause (f) of section 2 of the Central Excise Act, 1944. The Learned Counsel further submitted that for the very same service, show-cause notice was issued and service tax was confirmed in Appeal No. ST/21947/2015 under the category of 'Manpower recruitment or supply agency' services and for the subsequent period in Appeal No. ST/23314/2014, demand was confirmed under the category of 'Packaging activity' se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween Appellant and M/s HLL Life Care Ltd, it clearly indicate that the same is provided as a pure agent. The impugned order rejected the valuation adopted by the Appellant and considered the gross amount, which is illegal and unsustainable. Learned Counsel further drew our attention to the judgment of Hon ble Supreme Court in the matter of Union of India Vs. Intercontinental Consultants and Technocrats Pvt., Ltd., 2018 (10) G.S.T.L 401 (S.C.) where it is held that:- 24. In this hue, the expression such occurring in Section 67 of the Act assumes importance. In other words, valuation of taxable services for charging service tax, the authorities are to find what is the gross amount charged for providing such taxable services. As a fortiori, any other amount which is calculated not for such taxable service cannot a part of that valuation as that amount is not calculated for providing such taxable service . That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasized that Rule 5 of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue in brief and category under, as Non/Short payment of Service Tax under 'Man Power Recruitment or Supply Agency' Services and Cleaning activity' Services and for the period of 01.04-.2015 to 31.03.2017, which falls within the ambit of 'taxable services' under Section 65B(44) read with Section 65(B)(51) of the Finance Act, 1994 (as amended). 12. Learned counsel for the Assessee further submitted that the service recipients for the period of show cause notice were all Central Government Institutions or undertakings such as M/s. HLL Lifecare Ltd., Peroorkada, M/s. HLL Lifecare Ltd., Akkulam, IISER, BSNL, CTCRI, IIST and Southern Air Command, Trivandrum. Learned counsel for the Assessee also drew our attention to the sample copies of the invoices issued, which clearly shows that partial reverse charge existed and afterwards full charges under reverse charge. Thus, it is clear that activity of the Appellant during the relevant period of show cause notice was carried out for Central Government undertaking, whose accounts are audited by the C AG. M/s. HLL Lifecare Ltd., Peroorkada, M/s. HLL Lifecare Ltd., Akkulam, and BSNL are the body corporate institutions tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me allegation as in the show-cause notice without adducing any evidence. Learned counsel for the Assessee further submitted that the finding in the impugned order allowing exemption envisaged under Notification No. 25/2012-ST for cleaning services provided to M/s IISER, an educational institution is also sustainable. Learned Counsel further submitted that similar demand was made for the period from 2012-13 to 2015-16 and after considering the submissions, adjudication authority vide Order-in-Original No. 38/2021 dated 30.07.2021 dropped the demand. Thus in the absence of any contrary finding adduced in the review order or in the Grounds of Appeal, the Appeal ST/21868/2018 merits to be dismissed. 14. Learned Authorised Representative (AR) for the Revenue reiterated the finding in the impugned order and also relied on the judgment of Hon ble High Court of Kerala in the matter of M/s Security Agency Association Vs. Union of India -2012 (28) STR 3(Ker.) and submitted that the Appellant is liable for payment of service tax on gross amount received by the appellant. In Appeal No. ST/21868/2018, Learned AR submitted that the Adjudication authority committed a gross error in dropping the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. 17. Considering the above facts, demand by invoking the extended period of limitation is unsustainable. 18. Regarding demand of service tax under cleaning activity' services provided by the appellant to Railways and other Central Government Departments, though the appellant has not collected the same, appellant was liable to pay service tax for the service under Cleaning Service . The issue is no more res integra. As per the decision of the Hon ble Madras High Court in the matter of M/s. Premier Garment Process Vs. CCE ST, Chennai-2022 (10) TMI 881 Madras, the issue is settled and the activities of the Appellant are subject to service tax. Similar view was taken in the matter of M/s Hakamichand D Sons Vs. CST-ST-Ahmedabad-2022 (5) TMI 481 CESTAT, Ahmedabad. Thus, even if the appellant failed to collect service tax, service tax liability for providing such services is well settled and the impugned order is sustainable. Hence, demand for the normal period against the show-cause notices issued to the appellant is confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any payable by the appellant for the 'Cleaning activity' services as applicable for normal period against both the notices. As regarding the activity of secondary packing of the condoms carried out for M/s HLL Life Care, demand of service tax considering said activity both under Packaging activity or Manpower Recruitment or Supply Agency' Service is set aside. The demand of service tax under 'Manpower Recruitment or Supply Agency' Service against appellant for delivery of documents provided to HLL Lifecare is set aside. As regarding penalty, in the absence of any allegation regarding fraud or suppression of fact and considering the ratio of the judgment of Hon ble Supreme Court in catena of cases, penalty imposed by the adjudication authority is set aside. 23. As regarding the demand under ST/21861/2018, it is evident that the adjudication authority has considered the submission made by the appellant and considering the crucial facts regarding payment of service tax by recipient of service, which is not considered while issuing the show-cause notice, we hold that it is erroneously included in the present demand. Further the adjudication authority has given a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Cross Objection Memorandum No. 20138 of 2019 are disposed by partially allowing the appeal filed by the Department. Appeal No. ST/2331/2014 and ST/21947/2015 filed by the Assessee are partially allowed and remanded to the Adjudication Authority to quantify the service tax liability against 'cleaning activity' services, Manpower Recruitment or Supply Agency' Services for the normal period considering the date of issue of each show cause notice. As regards gross amount as consideration, the adjudication authority shall consider the contract against each service to ascertain whether the contract entered between Appellant and recipient of service are falling under the category of pure agent and if falling under the category of pure agent, said consideration should be excluded from the consideration. Further, the appellant is eligible for the benefit of Notification No. 30/2012-ST dated 20.06.2012 and cum-tax benefit as held by adjudication authority as per Section 67(2) of the Finance Act, 1994. Adjudication Authority is directed to complete the De-novo Adjudication within 3(three) months after the receipt of this order by extending a reasonable opportunity for persona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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