Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

Comments

Print   |    |  Comment

PJ/Case Laws/2012-13/1130

Whether service tax need to be paid on Commission received by dealers of motor vehicles from finance companies?

Case:- COMMISSIONER OF C.EX. , JAIPUR VERSUS AJMER AUTOMOBILES (P) LTD

Citation: - 2012 (26) S.T.R 19 (Tri- Del)

Issue: Whether service tax need to be paid on Commission received by dealers of motor vehicles from finance companies?
 
Brief fact: - TheAppeals is against  Joint Commissioner Order No. 09/ST/JP-11/2005. The Commissioner (Appeal) by his order dated 31-03-2006 set aside the order of Joint Commissioner. 
 Aggrieved by this order the revenue has filled Appeal No. 262/2006 before the Tribunal. In the meanwhile Commissioner issued a SCN dated 30-07-2007 for review of the order dated 25-11-2005 of the Joint Commissioner. This SCN was decided by order dated 25-11-2005 of the Joint Commissioner. This SCN was decided by Order dated 23-10-2007.
Aggrieved by this Order M/s Ajmer Automobiles have filed Appeal no. ST. 46/2008-SM.

When the SCN dated 30-07-2007 was issued the Order-In- Original dated 25-11-2005 was already set aside by order dated 31-03-2006. So the review of order was not sustainable & the Order-in-Original dated 23-10-2007 issued by Commissioner is not maintainable. However, the same matter is subject matter of Appeal NO. 262/2006 filed by the Department which is maintainable.

Now the Appeal filled by the department against the order of Commissioner (Appeal) is to be decided.

Appellant Contention:- The Ld DR assails the finding of the Commissioner (Appeals) that  there was no evidence of receipt of any commission by the respondent from finance companies. He relies on the entries in the books of accounts of the Respondent.  The Ld DR replied arguing that a wrong section mentioned in the SCN cannot be fatal to the proceedings so long as there is a provision available in the statute book on the date of issue of SCN which would sustain the SCN if the facts relevant for understanding the offence and the nature of offence are stated in the SCN though with an error in section number. He relies on the following case law in the matter :-(1) C.C.E. v. Pradyumna Steel Ltd. - 1996 (82) E.L.T. 441 (S.C.). (2) C.C.E. v. Lanjekar Sales Corporation - 2007 (210) E.L.T. 79 (Tribunal) = 2007 (5) S.T.R. 272 (Tribunal). (3) LVR & Dong-In Stone Ltd. v. CC. 1994 (72) E.L.T. 377.
He also argues that  suppression of information by the respondent inasmuch as the companies were never disclosed in ST-3 return. Making records available during the course of audit is not a sufficient ground to exonerate the respondent from the charge of suppression.  He further submits that para 2 of the Show Cause Notice gives the details of suppression and the words "suppressed" and "evaded the payment of service tax." are used many times and the argument of the Appellant that there was no allegation in the Show Cause Notice regarding suppression is not correct.
Respondent contention:- The main  contention of  respondent are :-
(i) Section 73(1) (a) of the Finance Act, 1944 was substituted w.e.f. 10-9- 2004 and therefore the SCN issued on 10-8-2005 invoking, this provision  is not maintainable (ii) Under the revised provision 73(1) in force on the date of issue of SCN, it is necessary to prove suppression of information to invoke  extended period of time. No suppression of information is involved because the entire record was produced to the audit party and replies to queries raised by the Audit party were given promptly.
 
Reasoning of Judgment:  This wrong mention of the section is not fatal to the Show Cause Notice so long as the ingredients of the new provision under Section 73(1) are satisfied
 
The new section requires that Notice can be issued invoking the extended period only if there was suppression of information. In this case the in-formation regarding commission received and also about payments received from the manufacturer was not disclosed in the service tax returns. This cannot considered as suppression with intent to evade tax, because the Assessee had a bona fide belief that they were not liable to pay tax on the amount received by them out of commission received by Maruti Udyog Ltd. on which Maruti Udyog Ltd. had paid Service tax. So this is not a fit case to invoke the extended period alleging suppression. So the Appeal fails on account of time bar and also on merits.
 
Decision: -Appeal disposed off.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com