There is a fallacy in above reasoning of Commissioner (Appeals). The same service for which the contractor has procured an order, does not stand actually provided by him but is passed on to sub-contractor, who provided the actual service, it cannot be said that the contractor is liable to pay duty on the same.
In this case the appellant have tried to ensure that the law is followed and is implemented properly. Therefore, as soon as the dispute arose in 2005-06, they made the payment under protest. Further, I also found from the Chartered Accountant’s certificate that the certificate clearly says that the incidence of the said service tax had not been passed on by them to any other person and it was not recovered from the clients.
After hearing the learned SDR, we find that in page Nos. 238 to 245 the appellant had produced various certificates before the adjudicating authority from the original contractor. These certificates indicate that the original contractor has discharged the service tax liability on the part of the work executed by appellant. If that be so, in our view the appellant need not be burdened with service tax liability.
As observed by the lower authorities, according to Clause 2(f), the claim has to be filed within 1 year from the date of export of goods. As already observed, this becomes a statutory requirement and a substantive requirement and therefore, the Tribunal, being a creature of law, cannot go beyond the provisions of law and statutes and give relief.
Mere publication of name of the company and name of the product along with details relating to price, packaging and dosage would not promote the sale or marketing of the product but the information would be of use only for the chemists/druggists. In fact that information would not be of use even to the chemist who was required to dispense medicines in the shop.
Provision of Section 73(3) and explanation (ii) to said Section (which was introduced from 8.5.10), specifically indicate that if Service Tax liability and interest thereof stand deposited, there is no need for issuing Show-Cause Notice even for penalty. I find that the ld. Counsel was correct in relying upon the judgment in the case of Krishna Security & Detective Services (supra). Provisions of Section 73(3) are very clear and the decision of the Tribunal in the case of Krishna Security & Detective Services (supra) also lay down the ratio that no penalty can be imposed if the Service Tax liability and interest thereof stand deposited under the Section 73(3).
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.
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.
It is undisputed that the appellant is a State Government entity and has been providing services of testing and certifying the quality of the seeds in the State. We find that the appellant was informed on 01.08.2006 by the office of the Commissioner of Service Tax that their activities would not fall under the category of services rendered and they would not be covered under the Service Tax.
Provisions of the section 73(1A) of the Finance Act, 1994 will apply in full force in this case, as there is payment of entire amount of service tax liability and interest thereof before the issuance of show cause notice (SCN). In my view, it is a fit case wherein the proceedings initiated against the assessee for the imposition of penalties, under various sections needs to be set aside and I do so.
