In this case, the appellants had Calculated and paid the entire amount of credit with interest and on finding that there was a short-fall in payment, the proviso of Sec.73 (3) of the Finance Act, 1994 would come into play and, therefore, the concerned Central Excise Officer should have informed the assessee instead of issuing show-cause notice. Though the Revenue had one year time for issue of show-cause notice, instead of intimating the appellants who would have been willing to deposit the amount without any notice, they have issued show-cause notice in this case. The appellant was not disputing the merit of the stand taken by the revenue. Show-cause notice has been issued which in accordance with the provisions of Sec.73 (3) of the Finance Act, 1994, need not have been issued at all.
Appellants had procured iron ores during the period April 2007 to March, 2009, which were used in the manufacture of their final product, namely, sponge iron. In bringing the said iron ores, which were used as input, the appellants had paid service tax on GTA services. Consequently, they had availed cenvat credit on the amount of service tax paid on GTA service as the same satisfies the definition of input service prescribed under Section 2 (I) of Cenvat Credit Rules, 2004. During the course of manufacture of sponge iron, the said iron ore was subjected to the process of screening and after completion of the said process, iron ore fines were generated.
Vide stay order No.ST/S/177/12-Cus dated 8.2.2012 the appellant was directed to deposit an amount of Rs. 30 lakh. Subsequently, the matter came up for ascertaining compliance and as the appellant expressed his desire to file modification application, the matter was adjourned and listed on 20.7.2012.
In the case of activities sought to be classified under site formation service our prima facie view is that this activity is classifiable as mining activity and liable to service tax only from 1-6-2007 and such tax is being paid. Demand of service tax under site formation service does not appear to be prima facie maintainable in this case where during the relevant period the definition did not cover the activity specifically and later a specific entry is introduced to cover the activity. So at this prima facie stage, we find that the appellants have made out a strong case for waiver of pre-deposit of dues arising from the impugned order for admission of appeal. We order so and there shall be waiver on collection of such dues during the pendency of the appeal.
It is the contention of the applicant that they have paid the amount in excess in the month of April 2004 and May 2004. We are therefore of the view the fact regarding excess payment is required to be verified by the Commissioner (Appeal). Accordingly we waive the pre-deposit and remand the case back to Commissioner for decision on merit after ascertaining the excess deposit of Rs. 14,451/- as service tax as contended by the applicant. Stay petition as well as Appeal are disposed of by way of remand.
Considering the fact that the entire amount of service tax and interest has been paid before the issuance of the show-cause notice, I reduce the penalty under section 78 to 25% of the service tax but confirm the penalty imposed under section 77 by the impugned orders. The appellants are directed to pay penalty under section 78 confirmed by this order within 30 days of the communication of this order. Failing which, the appellants shall be liable to pay 100% of penalty as imposed in the impugned orders. The appeals are disposed of in the above terms.
Notice of dismissal was issued on 29-2-2012 to show cause as to the reason why appeal of the appellant should not be dismissed for non-compliance with the stay order.
In absence of any particular format prescribed under the respective notifications, the department insisting for declaration on each consignment note for allowing the abatement under the said Notifications is un-sustainable in law. In these circumstances the declarations filed by the Goods Transport Agencies (GTA) in their letter-heads or in the respective payment bills certifying that they have not availed Cenvat credit on puts or capital goods nor availed the benefit of exemption Notification 12/2003 S.T., dated 20-6-2003 should have been accepted by the department in extending the benefit of Notification Nos. 32/2003- S.T. and 1/2006-S.T. In view of the above findings, we do not see any merit in the impugned orders passed by the ld. Commissioner. Consequently the order is set aside and the Appeals are allowed.
The order impugned before the Commissioner was received by the appellant on 04.09.2010 and the appeal was filed on 11.08.2011. Commissioner (Appeals) has observed that there is no provision under Section 85 of the Finance Act, 1994 to condone the delay beyond the period of three months on expiry of the limitation period.
The disputed issue relating to inclusion of cost of materials used for providing photographic services, which stands decided against the appellant by a Larger Bench decision of the Tribunal in the case of Aggarwal Colour Advance Photo System v. CCE [2011] 33 STT 33.
