Custom, Excise & Service Tax Tribunal
M/S Punjab Chemicals & Crop Protection ... vs Cce, Chandigarh on 23 September, 2016
Customs, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH-160 017
Single Member Bench
COURT NO.1
Appeal No. ST/56306/2013
[Arising out of the Order-in-Appeal No. 62/ST/Appl/CHD-II/2013 dated 25.02.2013 passed by the Commissioner of Central Excise (A), Chandigarh]
,
Date of Hearing/Decision: 23.09.2016
For Approval & signature:
Honble Mr. Ashok Jindal, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
M/s Punjab Chemicals & Crop Protection ltd. Appellant
Vs.
CCE, Chandigarh Respondent
, Appearance Mr. Joy Kumar, Advocate- for the appellant Shri. G.M Sharma, Sh. R.k. Sharma, AR- for the respondent , CORAM: Honble Mr.Ashok Jindal, Member (Judicial) FINAL ORDER NO: 61413 / 2016 Per Ashok Jindal:
Pursuant to the show cause notice dated 18.04.2011, proceedings were imitated against the petitioner to recover service tax of Rs. 35,14,534/- besides the stipulated interest and penalty, for failure to file ST-3 returns and remit service tax for being the recipient of Scientific or Technical Consultancy service during 2005-06 to 2009-10. The petitioner is a manufacturer of agro chemicals which are both sold in the domestic market and exported. For facilitating its exports, the petitioner entered into agreements with Foreign Scientific or Technical Consultancy service providers for enabling registration of the petitioners products and associated matters, as per legal requirements abroad. The petitioner made remittance to the Foreign Scientific and Technical Consultancy service provider and disclosed its expenditure in foreign currency on accrual basis under heading Notes and Accounts, in the balance sheets and profit and loss account, during 2009.10.
2. During the course of investigation, these remittances came to the notice of Revenue. Proceedings were therefore initiated. Eventually an order was passed on 07.03.2012 by the Additional Commissioner of Central Excise, Chandigarh-II. The adjudicating authority rejected the petitioners claim that there was no justification for invoking the extended limitation period under the proviso to Section 73 (1) of the Finance Act, 1994. The petitioner did not contest the classification of the service received as Technical Consultancy Service nor contested its liability to service tax or the obligation to file ST-3 returns. The adjudication authority therefore, confirmed the proposed service tax liability, interest and penalties. Aggrieved, the petitioner preferred an appeal which was rejected by the Commissioner (Appeals), Central Excise, Chandigarh-II, vide order dated 25.02.2013. Hence the present appeal.
3. It requires to be noticed that after issuance of show cause notice, the Petitioner remitted Rs. 11,22,700/- which stood appropriated in the adjudication order.
4. Petitioner contends before me that since remittance were reflected in the balance sheets and PLA during the relevant period and this was noticed by Revenue during the process of investigation during 2009, there was no wilful suppression or misstatement of facts with an intent to evade duty and invocation of the extended period of limitation is thus unwarranted.
5. Ld. Counsel would also contend that the entire exercise is revenue neutral since the Petitioner is entitled to avail cenvat credit of the whole of the service tax remittable by it under the reverse charge mechanism for being the recipient of Scientific and Technical Consultancy Service.
6. As the appellant is not contended the classification of the service nor its liability to remit service tax as the recipient of the Scientific or Technical Consultancy service and remittance of service tax and availing credit for the input service. As however, the only contend the appellant is that it is the revenues situation whatever they would have paid service tax, they were entitled to take cenvat credit the same immediately. In that circumstances, the extended period of limitation is not invokable. I have seen that in the balance sheet, the appellant is disclosed the receipt of the records payment of services. The same has been accepted by the department. In that circumstance, I hold that the situation of Revenue extended period of limitation is not invokable.
7. Accordingly, the service tax for the extended period of limitation is not sustainable and no penalty is imposable on the appellant.
With these observations, the appeal is allowed.
(Dictated and Pronounced in the open court) Ashok Jindal Member (Judicial) rt 1 ST/56306/2013 Punjab Chemicals and Crop Protection ltd.
Vs. Chandigarh-II