Customs, Excise and Gold Tribunal - Delhi
Bbc World (India) Pvt. Ltd. vs Commissioner Of Service Tax on 28 June, 2006
ORDER T.V. Sairam, Member (T)
1. The learned Counsel for the applicant states that there was a delay of 12 days in filing the appeal. The delay was attributable to the fact that the concerned employee had left the firm without handing over the papers he was handling for the appellants. As sufficient ground is shown, the delay in filing the appeal is condoned.
Stay 1263/06-ST
2. The application has been filed alongwith the appeal No. 122/06-ST challenging the order of the Commissioner, Service Tax, New Delhi made on 31-1-2006. In the impugned order, the learned Commissioner had stated that the appellant cannot claim adjustment in the service tax payable for the subsequent period as a matter of right. He therefore, held that the appellant's claim was not justified confirming the demand of Rs. 1,09,628/- Under Section 73 read with Sections 68 and 66 of the Act.
3. The learned Commissioner of Service tax vide his order dated 31-1-2006, has identified the following three issues:-
(a) short payment of service tax Rs. 1,09,628/-
(b) Wrong CENVAT availment Rs. 34,11,859/-
(c) Failure in filing the ST 3 returns.
He has found that the facts are self-evident and a matter of record. Hence besides demanding the tax, he has also imposed penalty, charging interest.
4. Being aggrieved by the order of the Commissioner, the appellant have filed this appeal. The learned Counsel for the appellant stated that Rule 4(4) of Service-tax Rules, 1944 clearly stipulated that where an assessee was providing more than one taxable service, he may make single application mentioning therein the service provided by him to the concerned Superintendent of Central Excise. In this connection, he drew our attention to their letter dated 27th August, 2003 addressed to the Superintendent, Service tax wherein they had sought amendment to the existing registration certificate. In the said letter, they had also duly informed the authorities that nowhere in the registration certificate, was it mentioned that they were registered under the Broadcasting service on behalf of BBCW, in receipt of services under the broadcasting service. They had further informed that they were engaged in running service under the category of business auxiliary services for BBCW which was notified with effect from 1st July, 2003. Hence they had requested for fresh registration of this category of service.
5. The learned Counsel for the appellants relied upon the fact that the learned Commissioner in the impugned order, had also taken note of the payment made by them vide TR-6 challan under business auxiliary service which was shown as Rs. 31,64,190/-. A calculation sheet in Annexure K was also presented by the appellants according to which for the period April, 2003 to September, 2003, the net tax payable would work out to Rs 3,22,897/- and for the period October, 2003 to March, 2004, the appellants had made excess payment to the tune of Rs. 6,63,991/-. It was further submitted that the appellant enjoyed a world wide representation - for their news value and they would not violate the provisions of law and that is the reason why they themselves took up the initiative for registering themselves under the appropriate service as per law.
6. The learned Sr. Departmental Representative representing the Revenue, argued that the department had never refused for a single registration. Even in their letter addressed to the Superintendent, the appellant wanted only fresh registration for business auxiliary service and this was duly accorded. He heavily relied upon Rule 3 of Service Tax Credit Rules. He emphasized on the proviso to the said rule which reads as under:-
Provided that the differential service provider shall be allowed to take such credit on or after the date on which he makes payment of the value of input service and the service tax paid or payable as indicated in the invoice or bill or challan referred to in Sub-rule (1) of Rule 5.
7. He also relied upon the provisions contained under Rule 4 ibid. He stated that Rule 4 is very clear and is restrictive in the sense that the credit shall be utilized only to the extent, such credit is available on the last day of the month. In view of these statutory provisions, he stated that the appellants were not eligible for taking the credit. The Id. SDR also submitted that from the debit note dated 17-12-2003 issued by BBC Worldwide India Pvt Ltd., it is obvious that no bill/invoice was raised prior to 17-12-2003. On the contrary, the returns filed by the appellants indicated that they had started utilizing the credit in the months of July, 2003, August, 2003 and September, 2003, and also further in October, November and December, 2003. He also contended that the payments made were partly in bulk during 25th August, 2003 and 25th September, 2003. It was also argued that as per law, they were not allowed to make payment. It was also submitted that at the time of availment of credit, no payment was made by the appellants to that effect.
8. At this point, the learned Counsel fairly conceded that they should be liable to pay to an extent of Rs. 4 lakhs which they were ready to pay now. In appeal, they had already fairly conceded towards the demand raised by the department on the issue of adjustment which comes to Rs. 1,09,628/-. According to the learned SDR, the penalty imposed under the impugned order till date itself should work out to Rs. 9 lakhs whereas the interest would be another Rs. 13 lakhs which are also to be paid by the appellant.
9. We have examined the case record and heard both the sides. It is apparent from the record that the applicant have taken service tax credit without following the proper procedure as laid down under the Rules. We therefore, find that the applicant have not made a fit case for waiver of tax demanded under the impugned order. We therefore, direct the applicant to deposit the whole of service tax demanded from them and also deposit the service tax credit taken by them, which is ordered to be recovered from them, under the impugned order, within 8 weeks from today failing which the appeal shall stand dismissed. On deposit of the said amount, the remaining amount of penalty shall stand waived till the matter is finally taken up for hearing
10. Report compliance on 4th September, 2006. The application stands disposed of accordingly.
(Order dictated and pronounced in the open Court on 28-6-2006)