Custom, Excise & Service Tax Tribunal
M/S.Zenith Studio & Colour Lab vs Commissioner Of Central Excise & ... on 27 September, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Stay Petition No.SP-877/11
&
Appeal No.S.T. 355/11
(Arising out of Order-in-Original No.05/ST/Section/84/Commr./2011 dated 02.06.2011 passed by the Commissioner of Central Excise & Service Tax, Patna.)
FOR APPROVAL AND SIGNATURE
HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Zenith Studio & Colour Lab
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise & Service Tax, Patna
Respondent (s)
Appearance:
Shri A.K.Banerjee, Sr.Advocate & Shri Malay Dhar, Advocate for the Appellant (s) Shri Sanjam Pal, Supdt.(A.R.), for the Revenue (s) CORAM:
Honble Dr. D.M. Misra, Member(Judicial) Date of Hearing/Decision :- 27.09.2013 Date of Pronouncement :- 27.09.2013 ORDER NO.FO/A/71070/2013 Per Dr. D.M. Misra.
1. This is an application seeking waiver of pre-deposit of Service Tax of Rs.5.59 Lakhs and equal amount of penalty imposed under Section 78 and penalty under Section 76 (not quantified) of Finance Act, 1994.
2. At the outset Shri A.K.Banerjee, Ld.Sr.Advocate along with Shri Malay Dhar, Advocate for the Applicant has submitted that the Applicant are engaged in providing service under the category of Photography Services which has been taxable during the period April, 2007 to March, 2008. The Ld.Advocate fairly submitted that the Applicant incorrectly availed the benefit of Notification No.1/2006-ST dated 01.03.2006 and accordingly discharged their Service Tax liability after availing the abatement of 60% from the gross taxable value of the services received by them. A show cause notice was issued for recovery of the Service Tax short paid by them. In response to the to the show cause notice the Applicant had filed their reply claiming that even though they are not entitled to the benefit of abatement prescribed under Notification No.1/2006-ST, but they are entitled to the Cenvat Credit involved on the input and capital goods used in or in relation to the provisions of said services. On adjudication, the Ld.Additional Commissioner accepted in principle that the Applicant are entitled to the benefit of Cenvat Credit and directed the Superintendent to scrutinize necessary documents submitted by the Applicant on eligibility of Cenvat Credit for the relevant period. In the meantime pending verification before the Superintendent of Central Excise the Applicant was issued a show cause notice by the Commissioner invoking the revisionary jurisdiction. The show cause notice issued by the Commissioner proposed penalty and interest which had not been imposed/levied by the Additional Commissioner in the order-in-original. It is his grievance that the Ld.Commissioner while deciding the said show cause notice travelled beyond the show cause notice in observing that the Applicant are not entitled to the Cenvat Credit as they failed to produce necessary documents before the Superintendent.
3. The Ld.A.R. for the Revenue has submitted that the Additional Commissioner in the adjudication order has directed the Applicant to file all the relevant documents before the Superintendent, Central Excise within one month but they failed. However, he has fairly accepted after going through the records that the Applicant though submitted necessary documents along with Chartered Accountants Certificate the same could not be verified by the Superintendent for a long period. He has no objection for remanding the case to the adjudicating authority for deciding the issue afresh.
4. After hearing both sides for some time I find that the Appeal itself could be disposed of at this stage. Hence, after waiving the requirement of pre-deposit of dues adjudged, I take up the Appeal itself for disposal with consent of both the sides.
5. I find that initially show cause notice was issued to the Appellant for recovery of Service Tax short paid on account of wrong availment of abatement under Notification No.1/2006-ST dated 01.03.2006. However, in response to the show cause notice the Appellant had though admitted that they have incorrectly availed the benefit of said Notification and paid Service Tax after wrongly claiming abatement of 60%, but claimed benefit of Cenvat Credit on inputs and capital gods which they have not availed. It was their claim before the adjudicating authority that in the event the Cenvat Credit component is taken into consideration and allowed to them, the Service Tax liability would not be there even if benefit of Notification No.1/2006-ST is denied to them. The Additional Commissioner while adjudicating the case accepted the submission of the Appellant and for verification directed the Appellant to file all necessary documents before the Superintendent within a period of one month. On this condition he dropped the show cause notice. Even though I do not find merit in the said order of the Additional Commissioner in remanding the matter to the Superintendent for verification of the document on the one hand and dropping the demand against the Appellant pending verification of the said documents, however, neither side has appealed the said order of the Additional Commissioner. But, later the Commissioner has issued a show cause notice exercising his revisionary jurisdiction on the ground that the adjudicating authority has failed to impose penalty and levy interest under the relevant provisions of the Finance Act, 1994. I find that while adjudicating the case the Ld.Commissioner has denied the Cenvat Credit claimed by the Appellant which has been allowed in principle by the Additional Commissioner. I agree with the Ld.Advocate that the Ld.Commissioner has travelled beyond the scope of the revisionary show cause notice. It also remains a fact that the documents on which the Appellant claimed Cenvat Credit remained un-verified/unscrutinized by the Superintendent till date. In these circumstances, in the interest of justice, it is necessary that these documents need to be verified by Superintendent about the admissibility of the Cenvat Credit. In the result the impugned order passed by the Commissioner of Service Tax is set aside and the case is remanded to the adjudicating authority for deciding the issue afresh relating to verification of documents and pass an appropriate order. Needless to mention a reasonable opportunity of hearing be granted to the Appellant. In the result the Appeal is allowed by way of remand. Stay Petition also gets disposed of.
(Pronounced and dictated in the open court.) SD/ (D.M.MISRA) MEMBER(JUDICIAL) sm 5 Appeal No.S.T. 355/11