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TMI Blog2025 (2) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... d same will be workout by the Superintendent, Central Excise & Service Tax Range-II, Renukoot. 2.1 The appellant is registered under Section 69 of the Finance Act, 1994 read with Rule 4 of the Service Tax Rules, 1994 with the Department under Service Tax Registration No. AGPPS6040PSTOOI for 'Maintenance and Repair Service, Cleaning Service; Man power supply Agency Services'. 2.2 On scrutiny of profit and loss account for the period 2008-09 and 2009- 10, it was found that the party has received Rs. 59,51,793 and Rs. 94,90,971 respectively as income from work done/ services provided by them. The party have shown gross value of services in their ST-3 returns for the same period as Rs. 18,14,057/-and Rs 72,86,350/- . respectively and have paid total service tax Rs. 9,65,3737-. 2.3 M/s Hindalco the service recepient provided the details that the appellants have received Rs. 54,67,273/- in 2008-09 and Rs 90,64,603/-in 2009-10 as gross value of services received by them. 2.4 Thus the party have made short payment of service tax of Rs 6,34,493/-, out of which they have deposited Rs 4,17,179/- on 12.09.2009 without interest. The remaining amount of service tax i.e. 2,17,314/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SCN, thus are liable to be set aside. Reliance is placed on the following decisions: * Ramlala [2023 SCC Online ALL 2479] * SACI Allied Products Ltd. [(2005) 7 SCC 159] * Inoc Leisure Ltd [2022 (60) GSTL 326 (T-Hyd)] affirmed as reported at [2022 (61) GSTL 342 (SC)] * Balarpur Industries Ltd [(2007) 8 SCC 89] * Brindavan Beverages 9P) Ltd. [(2007) 5 SCC 388] * Suresh Synthetics [(2021) 19 SCC 599] * Toyo Engg India Ltd. [(2006) 7 SCC 592] * The entire demand is revenue neutral. Reliance is placed on the following decisions: * Coca Cola India Pvt Ltd. [2007 (213 ) ELT 490 (SC)] * Jamshedpur Beverages [2007 (214) ELT 321 (SC)] * Extended period is not invokable, the demand is partially time barred. * Mere non registration or non filing of returns does not amount to suppression. * Padmini Products [1989 (43) ELT 195 (SC)] * Chemphar Drugs & Liniments [1989 (40) ELT 276 (SC)] * Pushpam Pharmaceuticals Co [1995 Supp (3) SCC 462 * PVR Ltd [2021 (55) GSTL 435 (T-Del)] * Anand Nishikawa Co Ltd. [2005-TIOL-118-SC-CX] * Ajay Mishra [2023 (386) ELT 310 (T-Del)] * Arya Logistics [2024 (80) GSTL 108 (T-Ahmd)] * Continental Foundati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as even if the APPELLANT are required to pay any service tax on the services provided by the APPELLANT to Hindalco, as is the case of the Department, the said tax paid by the APPELLANT will be admissible as credit to Hindalco. 4.4 Now the following question lies before me to decide i) Whether the demand confirmed without classifying the category of the taxable service is justified? ii) Whether the activities jobs/services in relation to production or processing performed by the appellant are taxable under business auxiliary services or not ? and whether such activities amounts to manufacture in r/o principal manufacturer? iii) Whether Not. No. 08/2005 dated 01-03-2005 as claimed by the appellants is applicable in the instant case ?and whether the entire exercise is not required being revenue neutral? iv) Whether the appellants are entitled for threshold exemption as claimed by them ? v) Whether penalty proposed under section 78 and section 76 is genuine. I am taking the whole issue one by one. 4.5 I find that the appellant have no where disputed the receipts form M/s Hindalco and have acknowledged the whole differential amount, they have only claimed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t but does not include any activity that amounts to" manufacture" with in the meaning of clause (f) of section 2 of the Central Excise Act, 1944]. I am of the opinion that the job processing done by the appellants does not qualify the definition of manufacture and hence are covered under the definition of Business Auxiliary Services 4.9 In the instant case the above job are given to appellants on contract on piece rate basis within the factory at manufacturing floor is covered under Business Auxiliary Service the. . In respect of Not. No. 08/2005 dated 01-03-2005 as claimed by the appellant, it is observed from the detailed chart that the appellant have charged service tax on these activities on several occasions and hence this will dis-entitle them from the said exemption. 4.10 The appellants has sought threshold exemption under notification no. 06/2005 S.T. dated 01-032005, but I observe that they are charging service tax from the starting which debar them from availing the threshold exemption as claimed. 4.11 In view of above finding I came to the conclusion that amount of gross value as claimed to be received on the portion of activities of Branding and Etching etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10 as gross value of services. However as per Profit & Loss Account for the period 2008-09 and 2009-10, it was found that assessee has received Rs 5951793/- and Rs 94,90,971/- respectively as income from work done/ services provided by them which indicates that party has provided services somewhere else other than M/s Hindalco Industries Ltd. Renukoot. Hence the total service tax of Rs 217,314/- (including Ed. Cess and Secondar Higher Education Cess) remains unpaid to trhe credit of Central Govt. by doing so, they have made themselves liable for penalty under Section 76 of the Act." Show cause notice at Annexure A encloses the Calculation Chart which is reproduced below: Calculation sheet for non-payment of service tax in r/o M/s Shyam Construction, Murdhawa, Renukoot based on FAR NO. 25/Alld/S.T/Gr.04/2010-10 and Profit Loss account of the party period gross value received by the party as per profit-loss account gross value received from M/s HIL as per details provided by M/s HIL gross value shown by the party in their ST-3 return service tax included in gross value differential amounts of gross value Due service tax Rate of service tax 1 2 3 4 5 2-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his amount to the exchequer. Hence the proceedings demanding interest in respect of this amount and consequent penalties imposed under section 76 of the Finance Act, 1994 cannot be justified. Thus we set aside the demand of interest made in respect of this amount along with the penalty imposed. 4.8 In respect of the remaining amount we do not find any merits in the submissions made by the appellant that the demand is barred by limitation. As observed in para 4.6 the demand for the entire period 2009-10 is well within the normal period of limitation, hence all the decisions relied upon by the appellant challenging the invocation of extended period of limitation will be of no avail. However we find that while filing the ST-3 return the appellant has clearly suppressed the value of the gross consideration received. Against the gross consideration of Rs 94,90,971/- they have declared only Rs. 72,86,350/- in their ST-3 return for the period 2009-10 and for the period 2008-09 they declared Rs 18,14,057/- in their ST-3 return against an amount of Rs 59,51,793/- received by them as depicted in their profit and loss account. Thus appellant has clearly suppressed the value of taxable servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice cannot be held to be beyond limitation in terms of proviso to Section 11A of the Act. The findings recorded by the Tribunal being not vitiated by any error of law or mis-reading of evidence do not raise any substantial questions of law." 4.10 In case of ITC Ltd. [2014 (36) S.T.R. 481 (Del.)] Hon'ble Delhi High Court held as follows: "12. What is apparent from the order-in-original, is the fact that the Commissioner had drawn attention of the assessee to Section 65(19), which defines 'Business Auxiliary Services'. In the show cause notice, it was pleaded that the services provided were covered under 'Business Auxiliary Services' under Section 65(19) since it appeared to satisfy all definitional ingredients spelt out. The assessee had entered into agreements with service receivers namely M/s. Srinivasa Resorts Ltd., M/s. Laxmi Distributors P. Ltd., Adyar Gate Hotels owner of Park Sheraton Hotels and Grand Bay. It was stated that M/s. Srinivasa Resorts Ltd. and M/s. Laxmi Distributors P. Ltd., had agreed to make payment of service tax; whereas, Adyar Gate Hotels owner of Park Sheraton Hotels and Grand Bay had raised a dispute. Their submission was that they were not li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Adyar Gate Hotels owner of Park Sheraton Hotels and Grand Bay would understand that reference was with regard to sub-clauses (vi) and (vii). The question was whether the activities performed and undertaken by the respondent-assessee under the agreement would fall in the category and within the meaning of Business Auxiliary Service. It was obvious that sub-clauses (i) to (iv) were not applicable. This leaves only sub-clause (v) and (vi). Sub-clause (vii) relates to service incidental or auxiliary to the activities specified in sub-clauses (i) to (vi). Read in the manner we do not think that it can be said that respondent-assessee was in dark or unaware as to what he had to answer and argue. Any ambiguity in such circumstances would have been removed at the time of oral hearing. Para 13 of the order of the Tribunal dated 24-7-2013 clearly indicates that the order is premised on the fact that the principles of natural justice were violated as the assessee did not have full opportunity to meet the case of the revenue for taxation of the services under the head 'Business Auxiliary Services', in respect of the agreements mentioned above. As noted above, we find that the notices we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e must be given a reasonable and real opportunity and made aware as to what he has to meet. But, the notice cannot be read as a legislative enactment which is to the point, precise and required to show exceptional lucidity. What is required to be seen is whether the allegations made have been conveyed and set forth, to enable the recipient/assessee to get an opportunity to defend himself against the charges. Notice should not suffer from obscurity and unintelligibility as to deny a fair and adequate chance to the recipient/assessee to get himself fully exonerated and avoid incidence of tax. What transpired after the notice was served, conduct of the parties thereafter, hearing given, are all factors that have to be examined to ascertain as to any prejudice was caused resulting in an arbitrary and unjust decision. Principle of prejudice resulting from vagueness and uncertainty has to be examined in pragmatic and a reasonable manner." This decision of Hon'ble Delhi High Court has been affirmed by the Hon'ble Supreme Court as reported at [2015 (38) S.T.R. J362 (S.C.)]. 4.10 Summarizing our findings: * Demand of Service Tax to the tune of Rs 2,17, 314/- along with interest (Sectio ..... 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