Custom, Excise & Service Tax Tribunal
Reliance Securities Ltd vs Commissioner Central Goods And Service ... on 28 June, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH
Service Tax Appeal No. 86623 of 2022
(Arising out of Order-in-Original No. 101/MG/Pr.COMMR/ME/2021-22 dated
28.03.2022 passed by the Principal Commissioner of CGST & Central Excise,
Mumbai East.)
M/s. Reliance Securities Ltd. ........Appellant
11th Floor, R-Trade Park,
Nirlon Compound,
Western Express Highway,
Goregaon East, Mumbai - 400 063
VERSUS
Commissioner of CGST, Mumbai East ........Respondent
9th Floor, Lotus, Parel, Lotus Infocentre, Near Parel Station, Parel East, Mumbai - 400 012 APPERANCE:
Shri Parth Parikh, Advocate for the Appellant Shri A.K. Shrivastava, Assistant Commissioner, Authorised Representative for the Respondent CORAM:
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) HON'BLE MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) FINAL ORDER NO. 85644/2024 Date of Hearing: 10.05.2024 Date of Decision: 28.06.2024 PER: DR. SUVENDU KUMAR PATI Legality of the adjudication proceeding concluded by the Principal Commissioner on the basis of subsequent show-cause notice issued covering the period for which earlier show-cause notice was issued and adjudication was pending, is assailed in this appeal, while questioning also the confirmation of duty, interest and penalty ST/86623/2022 2 proposed in the second show-cause notice against differential amount on Income Tax Statement and Service Tax Return.
2. Facts of the case, in a nutshell, is that Appellant has been providing stock broking and trading facilities to its customers through online trading platform and when customers did not pay the amount against purchase of securities within the time frame of trading plus one day, Appellant makes the payment on its behalf and collects delayed payment interest from its customers. Holding the same amount as consideration received for a declared service under Section 66E(e) of the Finance Act, 1994 for agreeing to tolerate the act of its customers for not discharging their obligation on time, show-cause notice was issued to the Appellant by the DGGI for the period from July, 2012 to March, 2017 proposing payment of Service Tax of ₹16,47,07,800/- alongwith applicable interest and equal penalty that was adjudicated and decided in favour of the Appellant on 26.07.2023. Appellant had also received a second show-cause notice on dated 24.12.2020 for the period from April, 2015 to March, 2016 on the basis of differential amount, noticed while comparing Service Tax Returns with Income Tax Returns filed by the Appellant before those two Authorities, demanding Service Tax for ₹2,46,75,862/- alongwith interest and equal penalty that was adjudicated vide Order-in-Original dated 28.03.2022 and resulted in confirmation of duty demand of ₹2,38,82,631/- alongwith interest and equal penalty and the rest was set aside. Legality of this order ST/86623/2022 3 confirming demand with interest and penalty is assailed by the Appellant before this forum.
3. During course of hearing of the appeal learned Counsel for the Appellant Mr. Parth Parikh submitted that going by the adjudication order made in respect of subsequent show-cause notice, it is quite noticeable that the same differential amount between Income Tax Statement and Service Tax Returns had arisen due to the income received towards delayed payment, which is not subjected to Service Tax in view of consistent decision of this Tribunal including those reported in 2024 (2) TMI 967 - CESTAT Mumbai in the case of IIFL Holding Ltd. Vs. CGST, Mumbai Central, 2014 (36) STR 937 (Tri.- Del.) in the case of Religare Securities Limited Vs. Commissioner of Service Tax, Delhi, but apart from going into the merit of the case wherein extended period of limitation can also be challenged in view of service of show-cause notice for the earlier period, legality of this subsequent show-cause notice is questionable since the same is issued in gross violation of the right against double jeopardy and the same right is affirmed consistently by various judicial forums including this Tribunal, Hon'ble High Courts and Hon'ble Supreme Court. He placed his reliance on the following decisions to support his stand. They are Commissioner of Central Excise, Meerut-II Vs. Prince Gutka Ltd. & Ors. 2015 (7) TMI 964 - SC, Duncan Industries Ltd. Vs. CCE, New Delhi 2006 (8) TMI 185 - SC, Ambey Mining Pvt. Ltd. Vs. CST 2023 (7) TMI 876 - Jharkhand HC, Anglo French Textiles Vs. CESTAT Chennai 2018 (362) ELT 576 (Mad.). He further ST/86623/2022 4 pointed out that the fact of existence of previous proceeding and pendency of show-cause notice issued by the DGGI was not only brought to the notice of the Adjudicating Authority but also he has noted the same in para 10.2 of his order while confirming duty, interest and penalty which is unsustainable in both law and facts apart from the fact that for the said period through adjudication proceeding completed in respect of the first show-cause notice. Appellant was granted relief against such demand though ordered belatedly, the same would be binding on the Department as no appeal has been preferred, to his best of knowledge.
4. In response to such submission learned Authorised Representative Mr. A.K. Shrivastava argued in support of the reasoning and rationality of the order passed by the Commissioner and pointed out that the grounds on which both show-cause notices were issued were different from each other and this adjudication being done prior to completion of the other adjudication, its validity cannot be challenged on the ground of double jeopardy.
5. We have gone through the submissions and relied upon judgments cited in the case. We do not consider it proper to discuss and analyse the issue of adjudication that was completed prior to the subsequent adjudication and its effect on the parties. What we intent to place on record is that the issue of legality of service of second show-cause notice before the first one got adjudicated has been settled way back in 2007 by the Hon'ble Punjab & Haryana High ST/86623/2022 5 Court in the case of Osaka Alloys and Steels Pvt. Ltd. reported in 2007 (211) ELT 543 (P & H) and the same has been affirmed by the Hon'ble Supreme Court, as could be noticed from its reported decision in 2008 (221) E.L.T.A150 (S.C.) (10.09.2007). The relevant portion of the order reads:
"Delay condoned.
The Special Leave Petition is dismissed on facts."
The Punjab & Haryana High Court in its impugned judgment-in-question had held that show cause notice dated 1-4-1998 under Rule 96ZP(1) of erstwhile Central Excise Rules, 1944 was issued for raising demand for duty. Another show cause notice dated 20-9-2001 was issued raising demand of duty in respect of same period once again the first show cause notice was not adjudicated, hence second show cause notice issued after four years is without jurisdiction and also time-barred. Appeal was dismissed by High Court as no substantial question of law arises from Tribunal's order."
6. Going by the judicial precedent set by the Hon'ble Supreme Court which is the law of the land, we have got no hesitation to give a finding that show-cause notice dated 24.12.2020 issued for the period from April, 2015 to March, 2016 proposing a demand for payment of Service Tax, when show-cause notice dated 17.10.2017 making demand covering the same period, was issued without jurisdiction and therefore, the adjudication order passed on the basis of the said show-cause notice dated 24.12.2020 is unsustainable in law. Hence the order.
ST/86623/2022 6 THE ORDER
7. The appeal is allowed and the order passed by the Principal Commissioner of CGST & Central Excise, Mumbai East vide Order-in- Original No. 101/MG/Pr.COMMR/ME/2021-22 dated 28.03.2022 is hereby set aside with consequential relief, if any.
(Order pronounced in the open court on 28.06.2024) (Dr. Suvendu Kumar Pati) Member (Judicial) (Anil G. Shakkarwar) Member (Technical) Prasad