2019 (2) TMI 21 – CESTAT MUMBAI – TMI – Penalty u/s 77 and 78 of the Finance Act read with 15(3) of Cenvat Credit Rules – short payment of service tax – appellant already paid the said tax along with interest – requirement to issue SCN – appellant was not issued with show-cause under section 73(1) of the Finance Act – Held that:- Though admissibility or inadmissibility of the credit in respect of renting of immovable property and business support service is a mixed question of fact and law, the same requires no discussion here in view of admission by the respondent except to the extent that there is a difference between compliance of audit report and discharge of duty liability in respect of imposition of tax as per Section 265 of the Constitution of India. Moreover, appellant was given a written promise before commencement of Audit that if any discrepancy in the audit is pointed out and the same is complied with, no further litigation would ensue.
–
When show-cause does not conta
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
respondent ORDER Order passed by the Commissioner of CGST & CE, (Appeals), Raigad setting aside the penalty imposed by the adjudicating authority on the respondent under section 77 and 78 of the Finance Act read with 15(3) of Cenvat Credit Rules is assailed by the appellant department before this forum. 2. Factual backdrop of the case, in a nutshell, is that respondent Reliance Infocomm Infrastructure Ltd. was pointed out by the audit team to have availed ineligible cenvat credit of ₹ 23,98,774/- on business support service and renting of immovable property service. Between the Financial year 2009-10 and 2011-12, it was also discovered by the said EA 2000 audit that there was mismatch between profit and loss account and balance sheet with ST3 returns for the Financial year 2010-11 and reconciliation of the same brought a difference of ₹ 48,69,069/- in the taxable value which was less shown in the ST-3 returns and accordingly service tax liability of ₹ 5,01,483/-
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
which he arrived at such conclusion is illogical. While admitting that show-cause notice does not reveal that proviso to Section 73(1) was invoked for imposition of penalty under section 78 of the Finance Act. Learned AR Shri Suresh submitted that during the corresponding period 2009 to 2012 no such provision in the Finance Act 1994 other than Section 73(1) or Rule 15 of Cenvat Credit Rules 2004 could be pressed into service to make such demand in the show-cause for which Section 73(1) is implicit in the show-cause though not expressly referred inasmuch as Section 15(3) of the Cenvat Credit Rules was invoked in the show-cause notice itself and ingredient of the offence constituting suppression misstatement and intention to evade payment of service tax on the part of respondent was squarely made out in the OIO as discussed in para 1.3 and 1.4. of the order. He placed his reliance on the order of the CESTAT Ahmedabad bench in the case of Geedelon Texo Twist Pvt. Ltd. reported in 2009 (2
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ounsel for the respondent Ms. Ginita Badani submitted that the respondent had received an intimation later from the appellant department on 06.12.2012 intimating the respondent to cooperate in the proper audit to be conducted in its concern and produce relevant documents before it. It also requested that payment of service tax with interest with furtherance of the audit objection by the respondent would help conclude all proceedings and put an end to the litigation. Referring to relevant para of the said audit report produced vide Exhibit A, the learned counsel for the respondent submitted that the respondent was instructed that for voluntary compliance of the audit objection raised by the audit parties, there exist a provision under section 73(3) Chapter V of the Finance Act 1994 wherein only applicable service tax and interest can be paid and a letter seeking waiver of penalty/show-cause notice can be given by the assessee thus leading to better compliance and less litigation. The re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
She further prayed for affirmation of the order passed by the Commissioner (Appeals). 5. Heard from both sides at length, and gone through the case record and relevant case laws produced by both parties. The grounds on which Commissioner (Appeals) had set aside the order of the first appellate authority are mainly two. First, for differential short payment of service tax, no show-cause notice was issued as appellant had already paid the said tax along with interest; Second, appellant was not issued with show-cause under section 73(1) of the Finance Act for which it has to be presumed that department has accepted the liability under section 73(3). Going by the OIO, para 1.3 and 1.4 on which the learned AR for the department placed his reliance, it cannot be said that the adjudicating authority has indicated the manner in which suppression of fact or misstatement has been established against the appellant except that he pointed out that short payment was noticed while making reconciliati
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
respondent except to the extent that there is a difference between compliance of audit report and discharge of duty liability in respect of imposition of tax as per Section 265 of the Constitution of India. Moreover, appellant was given a written promise before commencement of Audit that if any discrepancy in the audit is pointed out and the same is complied with, no further litigation would ensue. 6. When show-cause does not contain the rule violated by the respondent while proposing penalty which Commissioner (Appeals) found from the factual aspect of the case to have been covered under Section 73(2) and held that in such an event proceeding is to be concluded under section 73(3) in view of the judicial decisions referred above by the respondent, there is nothing left before this court to interfere with the finding of the Commissioner (Appeals). 7. In respect of penalty imposed under section 77 by the adjudicating authority the Commissioner (Appeals) clearly referred in his order th
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =