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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 ..... the comparison of the figures in the profit and loss account of the appellant and the amount of consideration received by the appellant from M/s Hinndalco. As the return for the period October 2009 to March 2010 would have been due only in the month of April 2010, the Show Cause Notice issued for the period 2009-10 on 16.03.2011 is well within the normal period of limitation and cannot be disputed on any account. Demand of interest for the period 2008-09 - appellant has deposited the tax for the period on 12.09.2009 - HELD THAT:- From the appellant has deposited the after receiving the same from the M/s Hindalco as per Voucher No 960611770, 222SKS-UCOT-02-09-2009 dated 02.09.2009. The service tax has been deposited as soon as the same was received by the appellant. At the relevant time the service tax was payable on the receipt basis and not the accrual basis. Thus there are no delay in the payment of this 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 the demand of interest made in respect of this amount along with the penalty imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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/- is to be paid by the party. 2.5 The appellants deposited Rs 417179/- on 12.09.2009 without interest The department asked to the party to deposit the interest on delayed payment of Rs 4,17,179/-, but they did not deposit, so they are not entitled to get the benefit of section 73(1 A ) and are liable for penalty u/s 76 of the Act. 2.6 The appellants have never disclosed these facts in their statutory ST-3 returns, thereby suppressing the material facts regarding taxable value with intent to evade payment of Service tax and thus have contravened the provisions of Section 68 read with Rule 6 of the Service tax Rules, 1994. 2.7 A show cause notice dated 29-03-2011 was issued to the appellant asking them to show cause as to why: 1. The service tax amounting to Rs 2,17,314/- (including Education Cess and Secondary & Higher Education Cess) should not be demanded and recovered from them along with appropriate Interest under the proviso to Section 73(1) of the Act r/w Section 75 of the Act. 2. Penalty should not be imposed upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Co Ltd. [2005-TIOL-118-SC-CX] * Ajay Mishra [2023 (386) ELT 310 (T-Del)] * Arya Logistics [2024 (80) GSTL 108 (T-Ahmd)] * Continental Foundation Jt Venture [2007 (216) ELT 177 (SC)] * No interest is recoverable and no penalty is imposable. 3.3 Authorized Representative re-iterated the findings recorded in nthe impugned order. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 Impugned order records findings as follows: "4.2 The adjudicating authority has confirmed demand of the alleged short paid of service tax of Rs. 2,17,314/- under proviso to Section 73(1) of the Act alongwith due interest and imposed a penalty of Rs. 2,17,314/- u/s 78 of the act. He also imposed penalty under Section 76 of the Act for delayed payment of Service Tax of Rs. 4,17,179/- to be worked out by jurisdictional range officer. 4.3 In this regard mainly contended (as detailed in para 3.3 to 3.20 supra) that, (i) the basis of quantification of demand proposed in the SCN is merely the difference between the gross amount received from Hindalco and amount shown by Appellants is their ST-3 and there has been no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant have no where disputed the receipts form M/s Hindalco and have acknowledged the whole differential amount, they have only claimed that an amount of Rs. 36,44,290/- received by them is non taxable. Although they themselves have not segregated classified the differential amount and proceeded to deposit Rs. 4,17,179/- in 2009-10 for the F.Y. 2008-09 on their own after due date. 4.6 I have keenly gone through the technical write up literature submitted by the appellant at the time of personal hearing, Copy of the purchase orders and Copy of the Bills raised by appellants in favor of Ms Hindalco. I found that the processing of Branding, Caustic Etching are part and partial of the process of manufacture of M's Hindalco. The portion of activities processing of Branding and Etching performed by the appellants will not tantamount to manufacture on itself. 4.7 I do not find force in contention of the appellants that the activities of branding and etching are mandatory and also incidental or ancillary to the completion of process of manufacture of aluminum. The Branding Process is done by printing trade mark or by sticking holograms bearing trade marks.. The proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. i.e. Rs. 36,44,290/- is non taxable under service tax. The appellant could not produce any valid evidence in support that they have not charged service tax on the such activity the. The chart submitted alongwith appeal is not supporting the defence adduced by the appellant. It is depicted from the chart that the appellant has charged Service Tax on such activities which contrary to the contention of the appellants. The chart submitted is not even supported by the bills and invoices. 4.12 I find that demand is sustainable and has rightly been confirmed by the adjudicating authority. The appellant has also suppressed the taxable value from the department by not declaring the full taxable value in their ST-3 return. The correct figures came to knowledge of department when the same was procured from the service receiver Ms Hindalco. The proviso to Section 73(1) of the Act has been appropriately invoked and penalty imposed under section 78 for this suppression of taxable value. 4.13 I find that the Penalty imposed under section 76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir 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 2-4-5 2008-09 5951793 5467273 1814057 222026 3915710 483982 12.36% 2009-10 9490971 9064603 7286350 743347 1461274 150511 10.30% Total due service tax 634493 services tax deposited in 2009-10 for the F.Y. 2008-09 417179 Net service tax payable 217314 4.4 From the above paras reproduced from the show cause notice and the calculation chart as above it is evident that the demand is not even in respect of the consideration received from M/s Hindalco, Renukoot, as the appellant has paid the service tax due on the said consideration. Appellant had been issuing the invoices to M/s Hindalco for the services provided and have been receiving the gross consideration along with the service tax due against the provision of the said services. They also had been providing the services else where on which service tax was not paid. This amount has been found from the comparison of the figures in the profit and loss account of the appellant and the amount of consideration received by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 services provided by them with intent to evade payment of service tax and extended period of limitation has been rightly invoked against them. As we hold that the appellant has suppressed the value of taxable service with intent to evade payment of tax, penalty imposed under Section 78 in respect of these amounts is justified in view of the decision of Hon'ble Apex Court in the case of Rajasthan Spinning and Weaving Mill [2009 (238) ELT 3 (SC)]. 4.9 Appellant has contended that the show cause notice is vague. We do not find any merits in the said submission. The opening paragraph of the show cause notice records the services provided by the appellant "Maintenance & Repair Service, Cleaning Services, and Man Power Supply Agency Services." The relevant detail of the services provided by the appellant during the period of dispute has been disclosed in the Show Cause Notice. The value of the services has been worked out and disclosed. The calculation chart provides the relevant detail of calculation. The law laid down by the various decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 liable to pay Service Tax because the agreements in question were entered into before introduction of the Finance Act. After the issue of show cause notice and the reply filed by the assessee, personal hearing, was given and issue discussed. The order-in-original specifically refers to clauses (vi) and (vii) of Section 65(19) of the Finance Act, which were finally relied upon by the Commissioner to give his findings. 13. In the light of the aforesaid factual matrix, we do not think, that the Tribunal was right in quashing the show cause notices itself, observing that there was violation of principles of natural justice. It is not a case wherein, the respondent-assessee was taken by a surprise, as relevant facts on which, the Commissioner relied and provisions of Section 65(19) invoked, were set out and mentioned in the show cause notices itself. Further, personal hearing was given in which the question whether the services were covered and could be treated as 'Business Auxiliary Service' was discussed. In case, the assessee wanted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the services under the head 'Business Auxiliary Services', in respect of the agreements mentioned above. As noted above, we find that the notices were clear and do specify the activities which were sought to be brought to tax as services under the head 'Business Auxiliary Services'. 16. Learned counsel for the respondent-assessee has relied upon decision of the Supreme Court in Amrit Foods v. Commissioner of Central Excise, U.P., 2005 (190) E.L.T. 433 (S.C.). In the said decision, the Tribunal had set aside the order of the Commissioner, in respect of the classification of milk shake mix etc. The Supreme Court while examining the appeal filed by the revenue against the order of the Tribunal, deleting the imposition of penalty under Rule 173Q of the Central Excise Rules, 1944, observed that the said Rule i.e. Rule 173Q had six clauses, the ingredients of which are not same, and it was therefore necessary for the assessee to be put on notice as to the exact nature of contravention for which the assessee was liable. Similarly, in Kaur and Singh (supra), the Supreme Court, was dealing with the situation wherein, Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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