Case Law Details
Ashirwad Foundaries Pvt. Ltd. Vs. Commissioner of CGST & Central Excise (CESTAT Kolkata)
CESTAT dropped the demand of Service tax on GTA under RCM, stating revenue neutrality. Hon’ble Supreme Court in the case of CCE, Pune Vs Coca-Cola India Pvt. Ltd., 2007 (213) ELT 490 (SC) and CCE, Vadodara Vs Narmada Chematur Pharmaceuticals Ltd., 2005 (179) ELT 276 (SC), has held that if there is no revenue implication involved, then no tax is required to be paid. It has been further held that, if for the same assessee, tax paid is modavable/cenvatable, then no tax is required to be paid. Therefore, I find that the appellant is not liable to pay tax for normal period of limitation as well.
We further find that the appellant has deposited an amount of Rs. 6,50,002/- during the course of investigation, and on specific query, it has been replied by the appellant that they have taken CENVAT Credit on the same. Therefore, that amount needs to be confirmed, as they have already taken the credit. Therefore, I find that the balance service tax demand along with interest and penalty are not sustainable in the eyes of law and is hereby set aside
FULL TEXT OF THE CESTAT JUDGEMENT
The appellant has filed the present appeal against the impugned dated 24.10.2018 passed by the learned Commissioner (Appeals).
2. The appellant is manufacturer of excisable goods and duly registered with the central excise department. During the course of audit of the appellant, it was noticed that the appellant has paid an amount towards transportation of goods, therefore liable to pay service tax under the category of “Goods Transport Agency” (GTA) being a service recipient under RCM. A show cause notice dated 18.09.13 invoking extended period of limitation issued to the appellant, demanding service tax of Rs. 8,96,545/- along with interest and penalty. The appellant contested the allegations levelled in the show cause notice, however, the learned Adjudicating Authority vide order dated 27.04.16, confirmed the demand of service tax, which has been further upheld by the learned Commissioner
(A) vide the impugned order. Hence, the present appeal before the Tribunal.
3. The learned Counsel appearing for the appellant has vehemently argued that the impugned order is liable to be set aside on the following grounds:
3.1 If the appellant is liable to pay service tax on GTA, then the appellant would be entitled to get CENVAT credit of the same, hence, making the entire situation revenue neutral. The appellant would like to rely upon the judgment of this Tribunal in the case of Star Alloys & Chemicals Pvt. Ltd., 2019 (21) GSTL 174 (Tri-Del.).
3.2 It is well settled law that, extended period of limitation cannot be invoked in the case of revenue neutral situation. It is further submitted that no mala fide can be attributed to the appellant, when the entire tax payable is available as credit and placed reliance on following judgment:-
(i) Reliance Industries Vs CCE, Mumbai, 2016 (44) STR 82 (Tri-Mum).
3.3 It is well settled law that, in order to invoke extended period, the department has to prove mala-fide on the part of the appellant by adducing cogent evidence. It is further submitted that the issue being of interpretation as well. The appellant would like to rely upon the following judgments:-
(i) Deccan Printers Vs CCE&ST, Mumbai, 2019 (21) GSTL 509 (Tri-Chennai)
(ii) Uniworth Textiles Ltd. Vs CCE, Raipur, 2013 (288) ELT 161 (SC)
3.4 He argued that it is well settled law that legal issues can be raised for the first time before this Tribunal also. It is further submitted that the limitation being a legal plea and a jurisdictional issue, which can be raised at any time. The appellant would like to rely upon the following judgments:-
i. Shree Bhagwati Steel Rolling Mills Vs CCE, 2015 (326) ELT 209 (SC)
ii. CCE Vs. Monsanto Manufacturer Pvt. Ltd., 2014 (35) STR 177 (All.)
iii. CCE Vs Hiper, 1989 (41) ELT 322 (Tri) by 3 Judges Bench
iv. Kusum Ingots & Alloys Vs CCE, Indore, 2001 (137) ELT 550 (Tri-Del.)
v. Eagle Flask Industries Ltd Vs CCE, Chennai-II, 2007 (220) ELT 173 (Tri-Chennai)
vi CCE Vs. Remington Road of India Ltd. 1991 (56) ELT 435 (Tri)
3.5 He argued that, even for the period, which falls within limitation period, no tax is payable, inasmuch the entire situation is revenue neutral. It has been held by the Hon’ble Supreme Court in the following cases, that if there is no revenue implication involved, then no tax is required to be paid. It has been further held that, if for the same assessee, tax paid is modavable/cenvatable, then no tax is required to be paid.
i. CCE, Pune Vs Coca-Cola India Pvt. Ltd., 2007 (213) ELT 490 (SC)
ii. CCE, Vadodara Vs Narmada Chematur Pharmaceuticals Ltd., 2005 (179) ELT 276 (SC).
3.6 He further submitted that, if the tax is not sustainable, then the interest and penalty are liable to be set aside on this ground alone.
4. The learned AR appearing for the revenue, reiterated the findings of the impugned order and submitted that the impugned order passed by the learned Commissioner (A) is a well-reasoned order and require no interference.
5. I have heard both the parties at length and perused the material on record.
6. I find that legal plea can be raised at any time and the limitation being a legal plea and jurisdictional issue can be raised before this Tribunal also for the first time as held by the Hon’ble Supreme Court in the case of Shree Bhagwati Steel Rolling Mills Vs CCE, 2015 (326) ELT 209 (SC).
6.1 I observe that the appellant is entitled to get the benefit of cenvat credit on the GTA services, therefore, making the situation revenue neutral. It is further observed that this Tribunal in the case of Star Alloys & Chemicals Pvt. Ltd., 2019 (21) GSTL 174 (Tri-Del.), wherein in identical situation has held that in the case of GTA service, cenvat credit is available, therefore extended period cannot be invoked. I further find that the Tribunal in the case of Reliance Industries Vs CCE, Mumbai, 2016 (44) STR 82 (Tri-Mum), has held that in case of revenue neutral situation, extended period cannot be invoked. I further find that there is no evidence of mala fide on the part of the appellant, hence extended period of limitation cannot be invoked as held by Supreme Court in the case of Uniworth Textiles Ltd. Vs CCE, Raipur, 2013 (288) ELT 161 (SC). I further find that the present show cause notice is barred by limitation.
6.2 As far as the issue covered under normal period of limitation is concerned, I find that the Hon’ble Supreme Court in the case of CCE, Pune Vs Coca-Cola India Pvt. Ltd., 2007 (213) ELT 490 (SC) and CCE, Vadodara Vs Narmada Chematur Pharmaceuticals Ltd., 2005 (179) ELT 276 (SC), has held that if there is no revenue implication involved, then no tax is required to be paid. It has been further held that, if for the same assessee, tax paid is modavable/cenvatable, then no tax is required to be paid. Therefore, I find that the appellant is not liable to pay tax for normal period of limitation as well.
6.3 I further find that the appellant has deposited an amount of Rs. 6,50,002/- during the course of investigation, and on specific query, it has been replied by the appellant that they have taken CENVAT Credit on the same. Therefore, that amount needs to be confirmed, as they have already taken the credit. Therefore, I find that the balance service tax demand along with interest and penalty are not sustainable in the eyes of law and is hereby set aside
7. In view of the above discussion, I set aside the impugned order by allowing the appeal of the appellant on merits and as well as on limitation, with consequential relief to the appellant except for the confirmation of amount of Rs.6,50,002/- as discussed above.
(Pronounced in open Court on 28 February 2020)
