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.
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.
The appellant has placed on record the authorization letter dated 15.3.2005 addressed by PBPL to Assistant /Deputy Commissioner, Central Excise, Varanasi authorising the appellant to manufacture biscuit on their behalf. Further perusal of the terms and conditions mutually agreed upon between PBPL and the appellant would show that as per the job work contract the appellant were required to process and manufacture biscuit, carry out inspection, packing and delivery to various depot of PBPL located all over the country as directed by PBPL.
The ld. A.R. submits that penalties have been imposed because they did not pay in time the tax due. We find that there is no case for imposing penalty for an amount more than net tax liability. So the penalty under Section 78 is reduced to Rs. 18,889/-. Further, penalty under Section 76 is waived and also the appellant is given an opportunity to pay 25% of the penalty under Section 78 in 30 days of receipt of the order. If such payment is not made in such timeframe full penalty will be payable.
Learned Advocate submits that lower authorities have also taken into account the Service Tax availed on the capital goods whereas the restriction of 20% utilisation is only in respect of the input service credit. He draws my attention to two precedent decision of the Tribunal in the same appellants case being BSNL v. CCE&C [2009] 21 STT 127 (Bang.-Cestat) and BSNL v. CCE [Final Order No. A/265/2011, dated 28-3-2011]. It stands held in the said decision that the restriction to use 20% of the credit in case of non-maintenance of separate Cenvat accounts for taxable and exempted services is only in respect of inputs service credit. Matter stands remanded to the lower authorities for segregating said credit falling on the input services as also on capital goods and to decide the matter afresh.
The Counsel for the appellant submits that for the purpose of calculation, Revenue is taking into account the entire receipts of the appellants whereas the taxable value should be taken after allowing abatement of 50% in terms of Notification No. 1/-90ST and once only taxable value is taken into account, the turnover is below the value as laid down in the small scale notification and they were eligible for exemption. The Assistant Commissioner set aside the show-cause notice but Revenue filed appeal and Commissioner (Appeals) has confirmed the demand.
Once the payment of service tax had been made by service provider to Treasury, assessee may not be denied the benefit of Cenvat credit, subject to appropriate examination of the allegation in the show-cause notice and proving use of the service in accordance with law. The original authority had to be satisfied that requirement of rule 9(5) of the Cenvat Credit Rules was fulfilled and service-tax paid was relating to input service that was ultimately used in manufacture of excisable goods. If he was satisfied that there was nexus, dependability, integrity, indispensability and inevitability, there may not be a difficulty to consider the claim of the assessee.
Appellant has rented out / leased the land along with the entire building, swimming pool and restaurant, bar, parking etc. with all the facilities as provided in the base building and the amenities and facilities under an agreement on monthly rental basis and a hotel is being run in the said building by M/s. Royal Orchid Banjara Pvt. Ltd. – in view of Explanation-1, clause (d) to the entry in section 65(105)(zzzz), it cannot be said to renting of immovable property.
Hon’ble Tribunal in the case of Commissioner of Central Excise, Rajkot v. Adani Pharmachem (P.) Ltd. – 2008 (12) STR 593 (Tri-Ahmd) cited by the appellants has held that in case where the sale is on FOB/CIF basis, the place of removal has to be load port only. Further in the case of Cauvery Stones Impex Pvt. Ltd. v. Commissioner of Central Excise, Salem -2010 (18) STR 73 (Tri-Chennai) has held that since the price of the goods exported was on FOB basis and therefore the ownership of the goods exported remained with the assessee up to the port of shipment and they also bore the risk of the goods up to the port of shipment. It was further held that the place of removal is the port and GTA service from factory gate to port of shipment is an input service and hence credit of service tax paid thereon is admissible
Bench held that When the transporter is same and recipient is respondent and there is no contradiction that tax was collected from the transporter, double taxation on the same transaction is inconceivable under the present provisions of Finance Act, 1994.
