Case Law Details
Mahanadi Coalfields Limited Vs Commissioner of CGST & CX (CESTAT Kolkata)
The only issue involved in this appeal is whether the appellant is liable to deposit service tax under Security Service under reverse charge when the entire service tax amount has been reimbursed to the service provider who has deposited the same with the Govt. Treasury as claimed by the appellant.
I find that the original authority while confirming demand has observed that since the tax paid challans copies do not have legible bank seal, the same could not be relied. I find that the appellant has also submitted the payment confirmation from the CBEC website showing the challan wise tax payment. They have also submitted the calculation details duly supported with certificate issued by the service provider wherein it has been stated that entire tax amount has been deposited with the treasury. No finding has been given by the learned Commissioner (Appeals) with regard to the submission of said certificate and challan details. Instead the learned Commissioner (Appeals) has reiterated the findings given by the lower authority.
On perusal of the calculation details submitted by the appellant before both the authorities, I find that the payment is duly supported by way of confirmation from the CBEC website which is on record. Neither the tax calculation details nor the payment confirmation has been disputed by both the authorities below. The only reason assigned by the lower authority for not accepting the said challans is that same did not bear legible bank seal. I find that since the said challans are supported with CBEC website payment confirmation, there is no reason to doubt the payment of tax. Considering the totality of the facts of the case and that the assessee is a Public Sector Undertaking, there is no reason to confirm the demand when service tax stands already paid and there is no loss of revenue to the Exchequer.
FULL TEXT OF THE CESTAT JUDGEMENT
The instant appeal has been filed by the assessee, M/s. Mahanadi Coalfields Ltd. against the Order-in-Appeal dated 25.6.2019 passed by the learned Commissioner (Appeals), Central Excise, Bhubaneswar.
2. The facts of the case in brief are that the appellant is a PSU engaged in the business of coal mining. Apart from payment of central excise duty on coal, they are also liable to deposit service tax under the category of ‘Security Service’ under Reverse Charge Mechanism as service recipient. The requirement to deposit service tax on the portion of 75% of taxable value towards receipt of security service was made applicable for the first time w.e.f. July 2012. For the period 2012-13, the appellant reimbursed the service tax amount to the security service provider. The Department did not take into cognizance the challans submitted by the service provider evidencing payment of the entire service tax amount. The demand of service tax of Rs.6,81,863/-for the FY 2012-12 was thus confirmed by the adjudicating authority together with interest and equivalent penalty. The appellant did not succeed in appeal before the learned Commissioner (Appeals). Hence the present appeal before the Tribunal.
3. Shri Rajeev Kr. Agarwal, learned Chartered Accountant appeared for the appellant and Shri D.Halder, learned Authorized Representative appeared for the Revenue.
4. The learned Chartered Accountant submitted that they have duly reimbursed the service tax amount to the security service provider who in turn has deposited the tax amount with the treasury. He submitted that when the entire tax amount stood deposited, no further demand could be raised. He submitted that copies of the entire tax paid challans alongwith the evidences obtained from the CBEC website for said challans were submitted while filing reply to Show Cause Notice which has not been considered by the original authority. He also submitted a certificate issued by the security service provider to the effect that entire tax amount was deposited by them was duly presented before the learned Commissioner (Appeals) who has completely ignored the same and have upheld the demand raised by the Adjudicating Authority without giving any findings.
The learned Chartered Accountant relied on the decisions of the Tribunal in the case of Navyug Alloys Pvt. Ltd. v. CCE, Vadodara-II, 2009 (13) STR 421, Mandev Tubes v. CCE, Vapi 2009 (16) STR 724 (Tri-Ahm), Umasons Auto Compo (P.) Ltd. v. CCE, Aurangabad 2016 (46) STR 405 (Tri-Mum.), to submit that even if tax which is liable to be paid under RCM, but is already paid by the service provider, it was not open to the department to confirm the same against the assessee. He further contested the demand on time bar and imposition of penalty. He also contested the demand on the ground of Revenue Neutrality as the demanded tax amount will be available as Cenvat Credit by placing reliance on the decision of Nirlon Ltd. v. CCE, Mumbai 2015 (320) E.L.T. 22 (SC).
5. The learned Authorized Representative appearing for the Revenue reiterated the findings given by the learned Commissioner (Appeals) and submitted that service tax was legally liable to be paid by the appellant under reverse charge and they cannot claim any relaxation in this regard. He prayed that the appeal be dismissed.
6. Heard both the sides and perused the appeal records.
7. The only issue involved in this appeal is whether the appellant is liable to deposit service tax under Security Service under reverse charge when the entire service tax amount has been reimbursed to the service provider who has deposited the same with the Govt. Treasury as claimed by the appellant.
8. I find that the original authority while confirming demand has observed that since the tax paid challans copies do not have legible bank seal, the same could not be relied. I find that the appellant has also submitted the payment confirmation from the CBEC website showing the challan wise tax payment. They have also submitted the calculation details duly supported with certificate issued by the service provider wherein it has been stated that entire tax amount has been deposited with the treasury. No finding has been given by the learned Commissioner (Appeals) with regard to the submission of said certificate and challan details. Instead the learned Commissioner (Appeals) has reiterated the findings given by the lower authority.
9. On perusal of the calculation details submitted by the appellant before both the authorities, I find that the payment is duly supported by way of confirmation from the CBEC website which is on record. Neither the tax calculation details nor the payment confirmation has been disputed by both the authorities below. The only reason assigned by the lower authority for not accepting the said challans is that same did not bear legible bank seal. I find that since the said challans are supported with CBEC website payment confirmation, there is no reason to doubt the payment of tax. Considering the totality of the facts of the case and that the assessee is a Public Sector Undertaking, there is no reason to confirm the demand when service tax stands already paid and there is no loss of revenue to the Exchequer.
In view of the above discussions, I set aside the demand of service tax, interest and penalty by allowing the appeal with consequential relief as per law.
(Operative part of the order was pronounced in the open Court.)
