CESTAT: Burden of proof lies on Revenue w.r.t. intention of assesse to evade Excise Duty

By:

In M/S. Mahatma Gandhi University of Medical Sciences and Technology v. Commissioner, Central Excise & Central Goods and Service Tax, Jaipur [Service Tax Appeal No. 50962 of 2020 (SM) dated September 08, 2021], Mahatma Gandhi University of Medical Sciences and Technology (“the Appellant”) filed an appeal against impugning the Order-in-Appeal No. 210 (SM)/ST/JPR/2020 dated May 15, 2020 passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur (“the Respondent”).

In the impugned order, the Respondent had alleged the Appellant of intentional evasion as they were short on the payment of Service Tax under Reverse Charge Mechanism for the period of April, 2015 to March, 2016.

The Appellant is a company registered and received services like legal consultancy services, work contract service, manpower recruitment service, maintenance service and security services

The Appellant had paid Service Tax under manpower recruitment or supply agency service on 75% of gross service value under Reverse Charge Mechanism (RCM) (which was done, by the Appellant, in accordance to the Notification No. 30/2012-ST dated June 20, 2012).

The Respondent alleged that the Appellant was required to pay the Service Tax on 100% of the services availed (as per the Amended Notification No. 07/2015-ST dated March 01, 2015).

Whilst the hearing, the Appellant contended that the period in dispute is immediately after the said Amended Notification (that is April, 2015 to March, 2016) and furthermore, the amendment also took effect from April, 01 2015. In the given circumstances, the intentional evasion cannot not be alleged.

As opposed to the contentions made by the Appellant, the Respondent contended that the Appellant had failed to produce any evidence to support their submissions.

After taking perusal of all the facts and evidences, the Honorable Customs, Excise and Service Tax Appellate Tribunal (“the CESTAT”), Delhi Bench held that the non-payment by the Appellant for the said period is merely due to his bonafide belief of his liability to the extent of paying the service tax at 75%. The Tribunal was of the view that the allegations of fraud and concealment were unjust as there was so apparent malafide on the part of the Appellant.

Furthermore, the Tribunal opined that the alleged non-payment cannot be called as willful or intentional act of the appellant to evade the payment of duty. Lastly, it was adjudged that it is the burden of the Revenue to prove whether the Assessee has intended to conduct evasion.

Online GST Course by Bimal Jain

Recorded: Certified Advanced GST Course

Course Details: Certificate of Participation will be Provided, Free GST Updates on E-mail, WhatsApp, Telegram for 1 Year, Background Material and PPT will be Provided on the downloadable basis, Total 21 Recorded Sessions (60 Hours), will be available for 120 hours or 60 Days whichever expires earlier.

For Registration:- https://cutt.ly/hxjl5Cu

Recorded: GST Course on Exports, Deemed Exports, SEZ, Imports, Merchandise Exports, Inverted Duty Structure (including Refunds)

Course Details: 6 Online Recorded Sessions of 2.30Hrs each with Background Material (BGM)

For Registration:- https://cutt.ly/pvw7mzl

For more details, Call: +91-8076563802, E-mail: intern@a2ztaxcorp.com, Web: www.a2ztaxcorp.in

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

CLOSE
CLOSE