CCGST Belapur Versus Reliance Infocomm Infrastructure Ltd.
Service Tax
2019 (2) TMI 21 – CESTAT MUMBAI – [2019] 65 G S.T.R. 296 (CESTAT – Mum)
CESTAT MUMBAI – AT
Dated:- 25-1-2019
Appeal No. ST/87380/2018 – A/85193/2019
Service Tax
Dr. Suvendu Kumar Pati, Member (Judicial)
Shri Suresh, AC (AR) for the appellant
Ms. Ginita Badani, Advocate for the 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 Rs. 23,98,774/- on “business support service” and “renting of immovable property service.” Between the Financial year 2009-10 and 2011
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en to the Commissioner (Appeals) by the respondent who set aside the penalty on all scores. The said order is being challenged here by the appellant department.
3. In the memo of appeal and during course of hearing of the appeal, learned AR for the department submitted that the order passed by the Commissioner (Appeals) is erroneous inasmuch as the finding of 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 not
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proof regarding admissibility of cenvat credit on the assessee and in case of any doubt it could have sought advice from the department and should never have misstated the fact in the ST3 return for which the order of the Commissioner (Appeals) is liable to be set aside.
4. In response to such submissions, though that no Cross objection is field, the learned counsel 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
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provisions of the Act and circular no. 137/167/2006-CX – IV dated 03.10.2007 clearly stipulates that in such a situation, all proceedings are required to be concluded against the person to whom show-cause is issued under sub section (1) of section 73 if he had paid service tax in full together with interest and penalty, if applicable under sub section (1)(a). 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 un
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admissible and not supported by the Rule except that respondent had accepted the fact of such availment of such credit as inadmissible. 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.
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
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