KJS Cement Ltd Vs Commissioner of CGST (CESTAT Delhi)
Summary: M/s KJS Cement Ltd filed Service Tax Appeal No. 51642 of 2018 before the Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, challenging the order dated 08.03.2018 passed by the Commissioner, Central GST, Central Excise & Customs, Jabalpur, confirming recovery of service tax of Rs.3,95,60,896/- with interest and penalty. The appeal was heard and decided on 07.12.2023 by a Bench comprising Justice Dilip Gupta, President, and P.V. Subba Rao, Member (Technical).
The appellant was engaged in manufacture of cement clinker and cement and obtained raw materials and inputs from various suppliers. Following an audit, the Department alleged that service tax had not been discharged on certain amounts treated as “declared services” under Section 66E(e) of the Finance Act, 1994. A show cause notice dated 17.10.2017 covered the period from 01.07.2012 to 31.03.2017 and alleged that the appellant had recovered penalties from raw-material suppliers for poor quality of materials through adjustments in supplier ledger accounts, recovered cheque-return penalties, recovered notice pay from staff and recovered liquidated damages, without paying service tax.
The four activities forming the subject matter of the demand were: (i) debit notes raised to offset excess credit in the supplier ledger account; (ii) notice pay recovery; (iii) cheque return penalty; and (iv) liquidated damages.
