2019 (2) TMI 1309 – CESTAT CHENNAI – TMI – Short-payment of service tax – freight charges – consulting engineering service to the concerned persons / clients as per the Slump Sale Agreement – time limitation – Held that:- When the appellant has taken up the business of NEPC, which includes assets as well as liabilities, they have to establish with concrete evidence that the liability to discharge service tax is retained by NEPC. In the present case, as agreed by the Slump Sale Agreement, the appellants have to pay up the amount to the clients under GTA service as well as Consulting Engineering Service. Therefore, they are liable to pay the service tax on these amounts under reverse charge mechanism – on merits, the apellant falls.
–
Time Limitation – Held that:- In the present case, the services were availed by NEPC and thereafter the payments were made by appellant pursuant to the Slump Sale Agreement. It is also seen that there is no specific stipulation in the agreement with re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
at Puducherry. Based on intelligence that appellant was engaging transporters for transporting their goods and had also engaged consultants for their Wind Energy Division and had not registered themselves for the purpose of payment of service tax under GTA service or Consulting Engineering Service, the officers of DGCEI collected details under summons proceedings. It was noticed that the appellant had engaged transporters for transporting their goods from their factory to the site and from the port of import to the site. Further, that they had taken over the Wind Energy Division from NEPC India Ltd. vide Slump Sale Agreement dated 16.1.2006. As per Slump Sale Agreement effective from 16.1.2006, the freight charges involved from January 2006 to April 2006 as per the details furnished by NEPC vide letter dated 2.4.2007 is payable by the appellant. Though the appellant had discharged the said freight charges, they had not paid the service tax upon such freight charges. It was also noticed
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ed service tax fully, show cause notice was issued proposing to demand service tax of ₹ 10,02,786/- along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed equal penalty under section78 of the Finance Act, 1994 apart from ₹ 1,000/- penalty under section 77 of the Act. The appellant filed appeal before Commissioner (Appeals) who vide order impugned herein upheld the same. Hence this appeal. 2. The ld. counsel Shri V.S. Manoj submitted that as per the Slump Sale Agreement, the entire assets and assumed liabilities are taken over by the appellant. Merely because the appellant has undertaken to pay up the liability to the creditors / customers who have provided the services, it cannot be said that the appellant is obliged to discharge the service tax liabilities also. There is no provision in Slump Sale Agreement to pay up the service tax liability. Therefore, the appellant has no obligatio
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
liability for service tax, the appellant vide letter dated 31.1.2007, 28.3.2007, 2.4.2007 and 24.4.2007 had furnished all details. In the letter dated 28.3.2007, the appellant had specifically stated that all the payments made by the appellant pertain to the liability accrued to NEPC and the appellant has discharged such payment only as per the Slump Sale Agreement. It is submitted by him that since the services were not received by the appellant and the liability towards the clients have been discharged as per the Slump Sale Agreement, the appellant cannot be fastened with suppression of facts with intent to evade payment of service tax. That the invocation of extended period therefore is incorrect. 4. The ld. AR Shri B. Balamurugan supported the findings in the impugned order. He submitted that the appellant has made the payments under freight charges and consulting engineering service to the concerned persons / clients as per the Slump Sale Agreement. When the appellant has made th
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
pay up the service tax in connection with these payments and therefore they are not liable to pay the service tax. We are not impressed by this contention raised by the appellant. When the appellant has taken up the business of NEPC, which includes assets as well as liabilities, they have to establish with concrete evidence that the liability to discharge service tax is retained by NEPC. In the present case, as agreed by the Slump Sale Agreement, the appellants have to pay up the amount to the clients under GTA service as well as Consulting Engineering Service. Therefore, they are liable to pay the service tax on these amounts under reverse charge mechanism. We find that on merits the appellant fails. 8. The ld. counsel has vehemently argued on the ground of limitation also. In the present case, the services were availed by NEPC and thereafter the payments were made by appellant pursuant to the Slump Sale Agreement. It is also seen that there is no specific stipulation in the agreement
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =