1. The appellant is in appeal against the impugned order wherein the ld. Commissioner (Appeals) has remanded matter back to the adjudicating
authority for denovo adjudication.
2. The facts of the case are that the appellant is the provider of works contract service and was paying service tax thereon. An investigation was
conducted. Thereafter two show cause notices were issued as under:
Show Cause Notice dated 12.10.2018 for the period 2013-14 to 2015-16 for demand of service tax of Rs. 1,10,22,913/- and Show Cause Notice dated
12.04.2019 for the period April 2016 to June 2017 for demand of service tax of Rs. 98,14,976/-. The matter was contested and a demand of Rs.
1,58,59,847/- was dropped and demand of Rs. 50,04,042/- was confirmed. In adjudication, the adjudicating authority gave the benefit of valuation rules
as the contract was with material and hence, allowed abatement @60%. Further, the adjudicating authority accepted the plea in certain cases that the
benefit of Notification No. 30/2012-ST dt. 20.06.2012 was available to the appellant as the appellant has provided the services to companies, but in
certain cases, the benefit of the above said notification was not given to the appellant on the ground that the appellant has charged 100% amount of
service tax from the service recipients. Further, the adjudicating authority has taken the amounts as per Form 26-AS or Balance Sheets whichever is
higher for charging the service tax. Findings of the adjudication authority were challenged before the ld. Commissioner (Appeals) who considered
certain pleas of the appellant but not considered other pleas and remanded the matter back to the adjudicating authority for denovo adjudication.
Against the said order, the appellant is before me.
3.1 The ld. Counsel, Sh. Vikrant Kackria appearing on behalf of the appellant submits that the appellant is not contesting the demand of service tax of
Rs. 1,19,262/- and 25% penalty amounting to Rs. 29,815/- in their appeal. It is his contention that the ld. Commissioner (Appeals) fell in error by
remanding the matter back to the adjudicating authority to decide the issue on its merit. He further submits that the adjudicating authority has not given
the benefit of Notification No. 30/2012-ST dt. 20.06.2012 to the appellant because in some cases, the appellant has recovered the excess amount from
the service recipients and the same amount is recoverable from the appellant under Section 73 of the Finance Act, 1994. It is his submission that if the
appellant has recovered the full amount of service tax from the service recipients, in that circumstance, the said amount is recoverable from the
appellant under Section 73-A of the Act instead of Section 73 of the Act. As the order of the adjudicating authority has not been challenged by the
Revenue before the Commissioner (Appeals), the demand under Section 73 of the Act is not sustainable and the appellant is not liable to pay the
service tax on the entire amount.
3.2 He further submits that the adjudicating authority has taken the figures of Form 26-AS as well as Balance Sheet. in fact, in certain cases the
figures of Form 26-AS were higher and in certain cases the figures of Balance Sheet were higher. Therefore, the adjudicating authority cannot take
the figures both of Form 26-AS and Balance Sheet whichever is higher. The adjudicating authority could have taken only one parameter and could
have demanded the tax on the amount as per Form 26-AS or Balance Sheet. Therefore, there is a mistake apparent on record by the adjudicating
authority while calculating the excess service tax on services provided by the appellant.
3.3 Further, he submits that there is no intent to evade payment of service tax suppression of facts, fraud or willful mis-statement, therefore, the
extended period of limitation is not invokable. Thus, the demand beyond the period of limitation is to be set aside.
3.4 In view of this, he submits that the impugned order is bad in law and deserves to be set aside.
4. On the other hand, the ld. AR submits that the excess amount collected by the appellant is paid to the department as the appellant has not
authorised to retain the excess amount received by him as service tax. He further submits that the adjudicating authority already given the benefit of
60% of the turnover as works contract and also allowed the benefit of Notification No. 30/2012-ST dt. 20.06.2012. He also submits that the figures of
the Balance Sheets has been taken for consideration to calculate the impugned demand. He also stated that extended period of limitation is rightly
invoked as the facts were not in the knowledge of the department. Only during the investigation, it came to the knowledge of the department.
5. Heard both the sides and considered the submissions.
6. After considering the facts and submissions, following issues are emerged:-
(i) Whether the excess recovery of the service tax can be recovered under Section 73 of the Finance Act, 1994 or Section 73-A of the
Finance Act, 1994?
(ii) Which figures are to be taken for computation of demand of service tax, (a) Form 26-AS or (b) Balance Sheet?
(iii) Whether extended period of limitation is invokable in the facts and circumstances of the case or not?
(iv) Whether the penalty can be imposed on the appellant or not?
7.1 Issue No. (i) :- The adjudicating authority after considering the arguments advanced by the appellant and documents produced gave the abetment
of 60% of the total turnover being works contract and also extended the benefit of Notification No. 30/2012-ST dt. 20.06.2012 in certain cases, the
appellant has paid 50% of the service tax (themselves) and 50% of the service tax was recoverable from the service recipients. These facts are not in
dispute.
7.2 Only dispute is with regard certain amounts where the appellant collected the full tax from the service recipients instead of 50% of the tax and
paid only 50% of the tax. Whether the said demand can be recovered from the appellant under Section 73 of the act or not?
7.3 For better appropriation, the provisions of Section 73 and Section 73-A of the Finance Act, 1994 are extracted herein below:
SECTION 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. â€
(1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, Central Excise
Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the service tax which has not been
levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring
him to show cause why he should not pay the amount specified in the notice :
Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason
of â€
(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the
person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words “thirty
monthsâ€, the words “five years†had been substituted.
Explanation.â€" Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the
aforesaid period of thirty months or five years, as the case may be.
(1A) Notwithstanding anything contained in sub-section (1) except the period of thirty months of serving the notice for recovery of service
tax), the Central Excise Officer may serve, subsequent to any notice or notices served under that sub-section, a statement, containing the
details of service tax not levied or paid or short levied or short paid or erroneously refunded for the subsequent period, on the person
chargeable to service tax, then, service of such statement shall be deemed to be service of notice on such person, subject to the condition
that the grounds relied upon for the subsequent period are same as are mentioned in the earlier notices.
(1B) Notwithstanding anything contained in sub-section (1), in a case where the amount of service tax payable has been self-assessed in the
return furnished under sub-section (1) of section 70, but not paid either in full or in part, the same shall be recovered along with interest
thereon in any of the modes specified in section 87, without service of notice under sub-section (1).
(2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-
section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount
specified in the notice) and thereupon such person shall pay the amount so determined.
(2A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section (1) is not
sustainable for the reason that the charge of,â€
(a) fraud; or
(b) collusion; or
(c) wilful misstatement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or therules made thereunder with intent to evade payment of service tax, has not
been established against the person chargeable with the service tax, to whom the notice was issued, the Central Excise Officer shall
determine the service tax payable by such person for the period of thirty months, as if the notice was issued for the offences for which
limitation of thirty months applies under sub-section (1).
(3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person
chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax,
chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise
Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the [Central Excise Officer] of such
payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid :
Provided that the Central Excise Officer may determine the amount of short-payment of service tax or erroneously refunded service tax, if
any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in
the manner specified in this section, and the period of “thirty months†referred to in sub- section (1) shall be counted from the date of
receipt of such information of payment.
Explanation.1â€" For the removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the amount paid by
the person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may
be determined by the [Central Excise Officer], but for this sub-section.
Explanation 2. â€" For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made
thereunder shall be imposed in respect of payment of service tax under this sub-section and interest thereon.
(4) Nothing contained in sub-section (3) shall apply to a case where any service tax has not been levied or paid or has been short-levied or
short-paid or erroneously refunded by reason ofâ€
(a) fraud; or
(b) collusion; or
(c) wilfulmis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax.
(5) The provisions of sub-section (3) shall not apply to any case where the service tax had become payable or ought to have been paid
before the 14th day of May, 2003.
(6) For the purposes of this section, “relevant date†means, â€
(i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid â€" (a)
where under the rules made under this Chapter, a periodical return,showing particulars of service tax paid during the period to which the
said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is
filed, the last date on which such return is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be
paid under this Chapter or the rules made thereunder;
(ii) in a case where the service tax is provisionally assessed under this Chapter or the rules made there under, the date of adjustment of the
service tax after the final assessment thereof;
(iii) in a case where any sum, relating to service tax, has erroneously been refunded, the date of such refund.
SECTION 73A. Service tax collected from any person to be deposited with Central Government. â€
(1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any
amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules
made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected
to the credit of the Central Government.
(2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as
representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government.
(3) Where any amount is required to be paid to the credit of the Central Government under sub- section (1) or sub-section (2) and the same
has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause
why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government.
(4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under
sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such
person shall pay the amount so determined.
(5) The amount paid to the credit of the Central Government under sub-section (1) or sub- section (2) or sub-section (4), shall be adjusted
against the service tax payable by the person on finalisation of assessment or any other proceeding for determination of service tax relating
to the taxable service referred to in sub-section (1).
(6) Where any surplus amount is left after the adjustment under sub-section (5), such amount shall either be credited to the Consumer
Welfare Fund referred to in section 12C of the Central Excise Act, 1944 (1 of 1944) or, as the case may be, refunded to the person who has
borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an
application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer
for the refund of such surplus amount.
7.4 On going through the said provisions, I hold that if any amount is collected more than the actuals, the said amount is recoverable from the assessee
under Section 73-A of the Act. Although show cause notice invoked the provisions of Section 73-A of the Act, but the adjudicating authority has not
invoked the provisions of Section 73-A of the Act and the said findings of the adjudicating authority have not been challenged by either of the side
before any appellate authority. In these circumstances, I hold that the confirmation of the excess amount recovered by the appellant cannot be
demanded under Section 73 of the Act. Therefore, the demand confirmed under Section 73 of the Act excess recoveries made by the appellant on
account of service tax cannot be demanded under Section 73 of the Act.
8. Issue No. (ii) :- While adjudicating the matter, the adjudicating authority chose the figures from Form 26-AS or Balance sheets, whichever is
higher. In fact, the adjudicating authority could have demanded the service tax either on the figures of Form 26-AS or from the figures of Balance
Sheets. In fact, Balance sheets figures records all the transactions done by the appellant by way of issuing invoices and receipts amounts thereof and
the said Balance sheets have been certified by the Chartered Accountant. In that circumstance, figures of the balance sheets are more authenticate to
compute the service tax recoverable from the appellant. But the adjudicating authority chose the figures whichever is higher comfortable to him/her
which is not correct. As balance sheets’ figures are certified by the Chartered Accountant and the same are more authentic figures, therefore, I
hold that service tax demand is to be computed on the basis of balance sheets figures. Accordingly, impugned order qua computation on the basis of
balance sheets needs examination at the end of the adjudicating authority.
9. Issue No. (iii) :- In this case, extended period of limitation is not invokable as it is a case of availment of benefit of Notification No. 30/2012-ST dt.
20.06.2012 and computation of taxable turnover and no fact has been suppressed by the appellant from the respondent. The activity as well as
payment of service tax were in the knowledge of the department, therefore, in the absence of any malafides on the part of the appellant, extended
period of limitation is not invokable. Therefore, any demand pertaining to extended period of limitation is set aside.
10. Issue No. (iv) :- As extended period of limitation is not invokable, therefore, no penalty is imposable on the appellant.
11. Conclusion - In view of the above, the following order is passed:
a) As excess recovery of service tax can be demanded under Section 73-A of the Act, only which has not done by the adjudicating authority,
therefore, the said demand cannot be confirmed under Section 73 of the Act.
b) Figures of the balance sheets are more authenticate for computation, therefore, ther computation of demand of service tax is to be done as per
balance sheets figures.
c) Extended period of limitation is not invokable.
d) Penalty on the appellant is not imposable
12. In view of above observations, the appeal is disposed of.
(Order pronounced in the court on 26.08.2021)
