Hon’ble Supreme Court in the case of Singh Enterprises v. Commissioner 2005 (189) ETL A-113 (SC) has held that Commissioner (Appeals) has no power to condone the delay beyond the period of 90 days. We also refer to a listed decision of the Hon’ble Supreme Court in the case of Rajasthan Mechanical Works vide which Delhi High Court judgement was upheld.
There is no dispute about role of consignment agent attributing to the promotion of the sale. Once sale promotion falls within Rule 2 (l) of Cenvat Credit Rules 2004, admissibility of cenvat credit of the service tax paid in respect of such service availed is permissible.
The appellants were engaged in the business of renting out low-floor buses to Rajasthan State Road Transport Corporation (RSTRC) on contract basis. RSTRC was using the buses as stage carriers for transportation of persons. The appellants did not pay service tax on the consideration received from RSTRC during the period 01-06-2007 to 31-12-2007.
The activity rendered by the assessee was of purchasing of prepaid SIM cards from mobile company and selling them to the ultimate customers or through dealers. For doing such an activity, the mobile company given an amount as a commission which according to the revenue was liable for service tax. The issue involved in the instant case was of service tax liability on the commission received which was the question in dispute before the Tribunal in various matters.
In this appeal of the department, the short question to be considered is whether the view taken by the lower authorities that the respondent was entitled to take CENVAT credit on stockbroker’s service which was used by the respondent for acquiring shares in another company with which the respondent had entered into an agreement for purchase of electricity for the purpose of manufacture of excisable product is correct or not.
The assessee contested that the impugned activity was a joint business involving no service from one party to other. Therefore in view of CBEC circular 108/2/009 dated 29-1-2009 no service tax arises in such context. The main contention was there that was a joint venture between the landowners and the assessee where profit of the joint venture was shared by both the parties. The landowner made available his land and the assessee did construction activity and constructed flats were divided in a ratio agreed at the time of execution of Joint Development Agreement. It could not be considered that the assessee was providing any service to the landowners. The assessee was paying back the consideration for his share of the land which he bought through the Development Agreement by compensating in the form of flats constructed and handed over to the landowners.
Applicants have availed the taxable services and the persons which were supplied like Yoga teacher, Poojari, Cook, Compounder, Nurse, helper etc. have no direct nexus with manufacture of final product. Therefore, prima facie, we find that the applicant has not made out a case for total waiver of pre-deposit of duty. Hence, the applicant is directed to deposit an amount of Rs.15 lakhs within a period of six weeks. On deposit of the said amount, pre-deposit of the balance amount of duty, interest and penalty shall stand waived and recovery thereof stayed during pendency of the appeal.
If the intention of the legislature was to align the exemption with section 26 of the SEZ Act or Rule 31 of the SEZ Rules, then notification No. 4/2004-ST would have been amended to reflect the same. No such amendment has been carried out in the said notification. In these circumstances, we are of the view that if the services are not consumed within the Special Economic zone, then the benefit of notification No. 4/2004-ST will not be available.
As regards the penalty set aside by first appellate authority under section 76 of Finance Act, 1994, for the quarter ending 30.09.2006, I find from the Form ST-3 return produced by ld. Counsel for the assessee, that the said form specifically indicate the taxable service rendered from April 2006 to September 2006 is Nil. Such return has been filed with the lower authorities on 25.09.2006.
Any order for imposing penalty specially the heavy once qas provided under Section 76 and 77, of the Act should show the reason justifying the imposition of penalty and thus following the principles of justice done. It is a fact on record that the Appellants had asked for clarification regarding availability of benefit of exemption Notification No. 12/2003 dated 20.6.03 from the department time and time again but as no response was made to their request under a bona fide belief of availability of said exemption notification had availed the benefit of said exemption notification.
