| | | |
| Availing of ITC cannot
be termed as illegal
when Tax was paid
under RCM on
services which were
exempted from tax | Petro Carbon &
Chemicals (P.) Ltd.
v. Commissioner of
CGST & CX, Haldia
[2021] 130
taxmann.com 252
(Kolkata - CESTAT) | The issue involved was whether appellant was entitled to Cenvat credit of Service Tax under Reverse Charge on services when as per lower authorities
the said services were exempted from levy of Service Tax.
The Tribunal observed that it was an admitted fact that the Appellant was not liable to pay Service Tax under RCM on the transportation of goods by
vessel services. However, the tax was paid and accordingly the Appellant had availed Cenvat credit of the same. Tribunal relied upon the judgement in
the matter of CCE & ST v. Tamil Nadu Petro Products Ltd. [C.M.A. No. 2939 of 2008, dated 4-9-2015, wherein it was held that If, upon a misconception
of the legal position, the assessee had paid the tax that he was not liable to pay and such assessee also happens to be an assessee entitled to certain
credits such as Cenvat credit, the availing of the said benefit cannot be termed as illegal. Tribunal by following the aforesaid judgement held that the
Appellant assessee cannot be asked to reverse the Cenvat credit availed on tax paid under Reverse Charge basis when the payment is not disputed.
Further, the Revenue was not able to prove beyond reasonable doubt, presence of fraud, collusion, wilful misstatement or suppression of facts on the
part of the appellant assessee. Therefore, imposition of penalty under section 11AC of the Act was held to be unwarranted. |
| When relevant facts
are in the knowledge
of the authorities,
when the first SCN
was issued, the
subsequent SCN
cannot allege
suppression of facts | Petro Carbon &
Chemicals (P.) Ltd.
v. Commissioner of
CGST & CX, Haldia
[2021] 130
taxmann.com 252
(Kolkata - CESTAT) | Appellant's unit was audited by the department during Jan 2009. Thereafter, two SCN vide SCN No.39/2007 dt. 05.03.2007 and SCN No. 143/2007,
dt. 23.08.2007 were issued for the period July, 2003 to March 2006 and April, 2006 to March, 2007. Proposed demands were confirmed by adjudicating
authority and same were duly paid. Thereafter, liability was worked out for April 2008 to December 2008 and that was also discharged. Thereafter,
although entire service tax demand from April, 2008 to December 2008 along with applicable interest was paid, appellant were issued SCN on 28.3.2011
invoking extended period. Department contended that under self-assessment scheme, it was onus of the tax payer to discharge liability without any flaw
and it is the responsibility to discharge tax and not take shelter under the same though blaming the department based on some procedural irregularities.
The Tribunal observed that this was a repetitive SCN and Supreme Court held in the case of Nizam Sugar Factory v. Collector of Central Excise 2006
(197) ELT 465, when relevant facts are in the knowledge of the authorities, when the first SCN was issued, the subsequent SCN cannot allege
suppression of facts. The ratio appeared to be applicable to the appellant's case. The penalty under Section 78 could be imposed only when there was
fraud or collusion or wilful misstatement or suppression of facts. In the instant case when tax along with interest stood paid, the need for imposition of
penalty was unsustainable. The appellant succeeded in so far as imposition of penalty under Section 78. |
| Extended period not
invokable when the
relevant entry itself is
subject matter of
litigation at various
Judicial Forums | Krishi Upaj Mandi
Samiti v.
Commissioner of
Central Excise &
Service Tax [2017]
84 taxmann.com 160
(New Delhi -
CESTAT) | The issue involved was regarding levy of tax on letting out of land and shops to traders and collection of allotment fee/lease amount for such land/shop.
The Tribunal held that tax entry "renting of immovable property service" itself was subject matter of serious litigation in various judicial forum. In fact,
the Hon'ble Delhi High Court in the case of Home Solutions (India) Retail Ltd. v. Union of India [2011] 13 taxmann.com 188/33 STT 95 held that the
activity of the rent per se cannot be subjected to service tax levy, whereas the activities in relation to renting are liable to service tax. The decision of
the Delhi High Court led to legislative changes including retrospective amendment of the concerned legal provisions in the Finance Act, 1994. In fact,
for non-payment of service tax under this tax entry, special provision was made under Section 80(2) to waive the penalties. Considering the background
and the status of the appellant as a Government Organisation, it was held that ingredients for invoking demand for extended period were not present. |
| Initial burden is on
department to prove
that the situations
visualised by the
proviso existed.
However, once it is
discharged, burden
shifts upon assessee | ICRA Ltd. v.
Commissioner of
Central Excise,
Chennai [2017] 79
taxmann.com 148
(Chennai - CESTAT | Tribunal observed that the proviso to Section 73(1) extended the period of limitation from six months to five years, therefore it had to be construed
strictly. The initial burden was on the department to prove that the situations visualised by the proviso existed. But once the department was able to
bring on record material to show that the appellant was guilty of any of those situations which are visualised by the section, the burden shifted and then
applicability of the proviso had to be construed liberally. When the law requires an intention to evade payment of duty then it is not mere failure to pay
duty. It must be something more. That is, the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. The word
'evade' in the context means defeating the provision of law of paying duty. It is made more stringent by use of the word 'intent'. In other words the
assessee must deliberately avoid payment of duty which is payable in accordance with law. Thus, where there was scope for doubt whether case for
duty was made out or not the proviso to Section 11-A of the Act would not be attracted. |
| When entire dispute
is revenue neutral,
there could be no
intention to evade
payment of duty | Reliance Industries
Ltd. v.
Commissioner of
Central Excise &
Service Tax LTU,
Mumbai [2016] 72
taxmann.com 6
(Mumbai - CESTAT) | Tribunal observed that entire dispute being revenue neutral, there could be no intention to evade payment of duty and consequently extended period
of limitation was per se not invokable. In case where credit is available to an assessee itself it cannot be said that there is any intention to evade payment
of duty, which is a pre-requisite for invoking the extending period of limitation. In the instant case, if any tax was payable, it could have been available
immediately to Appellant, thereby rendering entire dispute revenue neutral. Thus, invocation of extended period of limitation was clearly not justified.
Cases Referred-Reliance Industries Ltd. v. CCE & C 2009 (244) ELT 254 (Tri. - Ahd.), CCE & C v. Indeos ABS Ltd. 2010 (254) ELT 628 (Guj.), Mafatlal
Industries Ltd. v. CCE 2009 taxmann.com 493 (Ahd. - CESTAT); affirmed by the Apex Court by dismissing the Civil Appeal reported in 2010 (255) ELT
A77 (SC), Nirlon Ltd. v. CCE [2015] 58 taxmann.com 28/51 GST 177 (SC |
