Hemkunt Infratech (P) Ltd., New Delhi V. DCIT, Circle- 2, Gurgaon

ITA 6683/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2795 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 06-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Application of stay; Additional evidence
• Section: 43B; 32; 145; 12

Judgement Text

FIT FOR PUBLICATION IN THE INCOME-TAX APPELLATE TRIBUNAL, SD/- SD/- DELHI BENCH C, NEW DELHI (JM) (AM) BEFORE : SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 6683/DEL./2017 AND S.A. NO. 748/DEL./2017 ASSESSMENT YEAR: 2013-14 M/S. HEMKUNT INFRATECH (P) LTD. F-13, CENTRAL PLAZA, DLF GOLF COURSE ROAD, SECTOR-53, GURGAON. (PAN: AABCH6402R) (APPELLANT) VS. D.C.I.T., CIRCLE - 2, GURGAON. (RESPONDENT) ASSESSEE BY SH. RAKESH GUPTA, ADVOCATE, SH. SOMIL AGARWAL, ADVOCATE REVENUE BY MS. ASHIMA NEB, SR. DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-I, GURGAON DATED 12.09.2017 FOR THE ASSESSME NT YEAR 2013-14 ON THE FOLLOWING GROUNDS : 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING T HE ACTION OF LD. AO IN MAKING DISALLOWANCE OF RS.85,26,467/- ON ACCOUNT OF SERVICE TAX PAYABLE U/S 43B AND THAT TOO BY RECORDING INCORRECT FACTS A ND FINDINGS AND WITHOUT APPRECIATING/CONSIDERING THE SUBMISSIONS AN D. EVIDENCES FILED DURING THE COURSE OF APPELLATE PROCEEDINGS. DATE OF HEARING 07.02.2018 DATE OF PRONOUNCEMENT 23 .03.2018 ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 2 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, A CTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MAKING DISALLOWA NCE OF RS.85.26,467/- ON ACCOUNT OF SERVICE TAX PAYABLE U/S 43B IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS . 2. FROM THE ABOVE TWO GROUNDS, IT IS CLEAR THAT THE AS SESSEE HAS RAISED THE ONLY ISSUE OF DISALLOWANCE OF RS.85,26,467/- ON ACC OUNT OF SERVICE TAX PAYABLE U/S. 43B WHICH HAS ALSO BEEN CONFIRMED BY THE LD. C IT(A).THE BRIEF FACTS OF THECASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUI LDING AND CONSTRUCTION INDUSTRIES WITH A SOLID REPUTATION AT THE FOREFRONT OF QUALITY, SAFETY AND ENVIRONMENT MANAGEMENT. THE ASSESSEE FILED RETURN D ECLARING INCOME AT RS.3,69,73,797/- ON 05.10.2013. THE CASE WAS SELECT ED FOR SCRUTINY THROUGH CASS AND STATUTORY NOTICES WERE ISSUED TO THE ASSES SEE. THE BOOKS OF ACCOUNT WERE PRODUCED IN THE ASSESSMENT PROCEEDINGS ALONG W ITH BILLS AND VOUCHERS. THE LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAS RECEIVED SERVICE TAX TO THE TUNE OF RS.1,16,09,924/-, OUT OF WHICH THE ASSE SSEE HAD DEPOSITED A SUM OF RS.30,83,457/- BEFORE FILING OF RETURN OF INCOME IN THE IMPUGNED YEAR. THE BALANCE OF RS.85,26,467/- WAS NOT PAID BY THE ASSES SEE BEFORE FILING THE RETURN AS PER ANNEXURE-VI OF THE AUDIT REPORT. THE ASSESSI NG OFFICER ASKED THE ASSESSEE WHY THE SERVICE TAX AS CLAIMED PAYABLE SHO ULD NOT BE TREATED AS INCOME OF THE ASSESSEE AS IT WAS NOT PAID. IN RESPO NSE, THE ASSESSEE MADE WRITTEN SUBMISSIONS BEFORE THE ASSESSING OFFICER AN D THE LD. ASSESSING OFFICER ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 3 WAS NOT SATISFIED FROM THE SUBMISSIONS MADE BY THE ASSESSEE AND DISALLOWED THE SERVICE TAX PAYABLE OF RS.85,26,467/- AND ADDED THE SAME BACK TO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE ABOVE ADDI TION, THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO AF TER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, UPHELD THE ACTION OF T HE ASSESSING OFFICER AND THE ASSESSEE ALSO FURNISHED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A), WHICH WERE ACCEPTED BY HIM. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE ASSESSEE HAS ALSO FILED A STAY PETITION ARIS ING OUT OF THIS APPEAL, BUT SINCE, THE APPEAL IS BEING DECIDED ON MERITS, THE S TAY PETITION FILED BY THE ASSESSEE STANDS DISMISSED. 4. ARGUING THE APPEAL, THE LD. AR OF THE ASSESSEE S UBMITTED THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MAKING DISAL LOWANCE U/S. 43B OF THE ACT BECAUSE THE ASSESSEE HAS NOT DEBITED THE EXPENDITUR E AS SERVICE TAX TO THE PROFIT AND LOSS ACCOUNT. SECTION 43B CONTEMPLATES T HAT IF ANY EXPENDITURE HAS BEEN DEBITED AND WHICH HAS NOT BEEN PAID/REMITTED T O THE GOVT. WITHIN DUE TIME, OR UPTO THE DATE OF FILING THE RETURN OF INCO ME, THEN SUCH EXPENDITURE CAN ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 4 BE DISALLOWED. IT WAS SUBMITTED THAT THE SERVICE T AX RECEIVED FROM THE SERVICE RECIPIENTS ARE SEPARATELY CREDITED AND IT HAS BEEN USED FOR THE PURPOSE OF AVAILING REVERSE CHARGE MECHANISM UNDER THE SERVICE TAX RULES AND CREDIT FOR DUTY PAID ON CAPITAL GOODS. HE FURTHER SUBMITTED TH AT THE ASSESSEE HAS PAID SERVICE TAX IN A SUM OF RS.30,83,457/- BEFORE DUE D ATE OF FILING THE RETURN. THE SERVICE TAX DEPARTMENT HAS ALSO CONDUCTED A SERVICE TAX AUDIT ALSO. HE FURTHER SUBMITTED THAT THE ASSESSEE IS ENTITLED TO TAKE CENVAT CREDIT ON THE SERVICE TAX RECEIVED FOR THE PURPOSE OF UTILIZATIO N FOR DUTY PAID ON THE PURCHASE OF CAPITAL GOODS. HE ALSO REITERATED THE S UBMISSIONS MADE BEFORE THE LD. CIT(A) AND RELIED ON SOME CASES. THE ASSESSEE H AS ALSO FILED TWO PAPER BOOKS. HE ALSO RELIED ON THE DECISION OF ITAT IN MA CRO NIRMAN PVT. LTD. VS. ITO (ITA NO.2105/DEL./2013 DATED 27.04.2015). 5. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE IS A LI MITED COMPANY REGISTERED UNDER THE COMPANIES ACT AND IT HAS NOT APPLIED PROP ER METHOD OF ACCOUNTING AS PER SECTION 145 AND SECTION 145A OF THE INCOME-T AX ACT, 1961. HE ALSO REFERRED TO SECTION 43B AND AS PER SECTION 43B(A) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATE VER NAME CALLED, UNDER ANY LAW FOR THE TIME BEING IN FORCE. HE SUBMITTED THAT THE ASSESSEE SHOULD HAVE ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 5 PAID THE SERVICE TAX LYING IN THE BOOKS AS PAYABLE AS PER PROVISIONS OF THE IT ACT, OTHERWISE THE UNPAID AMOUNT LYING IN THE BOOKS OF ACCOUNT SHALL BE TAXED IN THE IMPUGNED YEAR. THE LD. DR SUBMITTED THAT THE CASE LAWS RELIED BY THE LD. AR ARE NOT APPLICABLE IN THE PRESENT CASE DUE TO DI FFERENT FACTS. 6. AFTER HEARING BOTH THE SIDES AND PERUSING THE EN TIRE MATERIAL AVAILABLE ON RECORD, WE OBSERVE THAT THERE IS A CREDIT BALANC E OF RS.1,16,09,924/- AT THE END OF THE YEAR TOWARDS EXPENSES PAYABLE. THE ASSES SEE SUBMITTED THAT IT IS SERVICE TAX LIABILITY, WHICH AROSE DUE TO CREDITING THE SERVICE TAX RECEIVED FROM THE SERVICE RECIPIENTS. THE ASSESSEE HAS CHALLENGED BEFORE US, THE DISALLOWANCE OFRS.85,26,467/- DISALLOWED U/S. 43B OF THE ACT. WE OBSERVE THAT THE ASSESSEE HAS RECORDED HIS TURNOVER AFTER DEDUCTING THE SERVI CE TAX RECEIVED AND THE SERVICE TAX HAS BEEN CREDITED SEPARATELY. IN SECTIO N 145, OF THE ACT FOR DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD PR OFITS AND GAINS OF BUSINESS OR PROFESSION OR INCOME FROM OTHER SOURCES , THE SAME IS TO BE COMPUTED IN ACCORDANCE WITH EITHER CASH OR MERCANTI LE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. THE SAID PROVIS IONS WERE SUBSTITUTED BY THE FINANCE ACT, 1995 W.E.F. 01.04.1997. UNDER SECT ION 145A OF THE ACT, IT IS PROVIDED THAT NOTWITHSTANDING ANYTHING TO THE CONTR ARY CONTAINED IN CLAUSE (A) TO SECTION 145, THE VALUATION OF PURCHASE AND S ALE OF GOODS AND INVENTORY, ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 6 FOR THE PURPOSE OF DETERMINING THE INCOME CHARGEABL E UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, SHALL BE (I) I N ACCORDANCE WITH METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE; AND (II) FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX, DUTIES, CESS OR FEES , BY WHATEVER NAME CALLED, ACTUALLY PAID OR INCURRED BY THE ASSESSEE, TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION, AS ON THE DATE OF VALUATION . AS PER THE EXPLANATION UNDER THE SAID CLAUSE, IT IS POINTED OUT THAT FOR T HE PURPOSE OF THIS SECTION, ANY TAX, DUTIES, CESS OR FEES, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BEING IN FORCE, SHALL INCLUDE ALL SUCH PAYMENTS, NO TWITHSTANDING ANY RIGHT ARISING AS A CONSEQUENCE TO SUCH PAYMENTS. SUB-CLAU SE (B) TALKS OF INTEREST RECEIVED BY THE ASSESSEE ON COMPENSATION OR ENHANCE D COMPENSATION, WHICH IS NOT RELATABLE TO THE ISSUE BEFORE US. THE AFOR ESAID PROVISIONS OF SECTION 145A OF THE ACT HAVE BEEN SUBSTITUTED BY THE FINANC E (NO.2) ACT, 2009 W.E.F. 01.04.2010. PRIOR TO ITS SUBSTITUTION, WHICH WAS IN SERTED BY THE FINANCE (NO.2) ACT, 1998 W.E.F. 01.04.1999, THE SECTION PROVIDED T HE PROVISION RELATABLE TO THE VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTO RY, FOR THE PURPOSE OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD PR OFITS AND GAINS OF BUSINESS OR PROFESSION AND NO CLAUSE (B) WAS PROVID ED I.E. IN RESPECT OF INCOME RECEIVED BY THE ASSESSEE ON COMPENSATION OR ON ENHA NCED COMPENSATION. IN VIEW OF THE AMENDED PROVISIONS OF THE ACT, WHICH CA ME INTO EFFECT FROM ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 7 01.04.1999 FOR VALUING THE PURCHASES AND SALES OF G OODS AND ALSO FOR VALUING THE INVENTORY, WHILE DETERMINING THE INCOME CHARGEA BLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, IT HAS BEEN PROVIDED THAT THE SAID VALUATION WOULD BE IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE I.E. EITHER MERCANTILE OR CASH. FURTHER, ADJUSTMENT IS TO BE MADE TO INCLUDE THE AMOUNT OF ANY TAX, DUTIES , CESS OR FEES, BY WHATEVER NAME CALLED, ACTUALLY PAID OR INCURRED BY THE ASSES SEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION, AS ON THE VALUATION DATE. IN OTHER WORDS, WHERE ANY EXPENDITURE IS ACTUALLY PAID OR IN CURRED BY THE ASSESSEE BY WAY OF ANY TAX, DUTIES, CESS OR FEES, BY WHATEVER N AME CALLED, THEN ADJUSTMENT IS TO BE MADE BOTH IN THE VALUATION OF PURCHASE AND SALE OF GOODS AND ALSO IN THE VALUATION OF INVENTORY TO INCLUDE THE AFORESAID AMOUNTS WHILE DETERMINING THE INCOME CHARGEABLE UNDER HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. THE ASSESSEE HAS SEPARATELY ACCOUNTED FOR THE SERVI CE TAX COLLECTED IS ALSO THE INDIRECT PART OF TURNOVER BECAUSE IT IS RECEIVED AL ONG WITH TURNOVER. THE ASSESSEE HAS NOT SHOWN ANY INVOICE RAISED BY HIM BE FORE US AS PER SERVICE TAX RULES, WHICH IS MANDATORY FOR THE SERVICE PROVIDER TO ISSUE INVOICE TO THE SERVICE RECIPIENT. HE HAS ALSO NOT PRODUCED ANY EVI DENCE REGARDING PAYMENT RECEIVED FROM SERVICE RECIPIENTS AS TO HOW THEY HAV E PAID SEPARATELY OR INCLUSIVE OF SERVICE TAX. HE HAS ALSO NOT PRODUCED ANY EVIDENCE REGARDING ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 8 WHETHER THE TDS HAS BEEN REMITTED ON PAYMENT AFTER EXCLUDING THE SERVICE TAX. AFTER GOING THROUGH THE PAPER BOOK FILED BY TH E ASSESSEE, WE OBSERVE THAT THE ASSESSEE HAS UTILIZED SERVICE TAX CREDIT TOWARD S PAYMENT OF DUTY ON CAPITAL GOODS AND AS PER REVERSE CHARGE MECHANISM. THEREFOR E, IT IS NECESSARY TO DISCUSS THE RELEVANT PROVISIONS OF THE CENVAT CREDI T RULES, 2004 AS WELL AS SECTION 43B OF THE IT ACT. 7. SECTION 43B(A) IS AS UNDER : 43B. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PR OVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN R ESPECT OF (A) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BE ING IN FORCE, OR 8. RULE 4 OF THE CENVAT CREDIT RULES, 2004 READS AS UN DER : RULE 4. CONDITIONS FOR ALLOWING CENVAT CREDIT.- (1) THE CENVAT CREDIT IN RESPECT OF INPUTS MAY BE TAK EN IMMEDIATELY ON RECEIPT OF THE INPUTS IN THE FACTORY OF THE MANUFAC TURER OR IN THE PREMISES OF THE PROVIDER OF OUTPUT SERVICE: PROVIDED THAT IN RESPECT OF FINAL PRODUCTS, NAMELY, ARTICLE S OF JEWELLERY FALLING UNDER HEADING 7113 OF THE FIRST SCHEDULE TO THE EXCISE TARIFF ACT, THE CENVAT CREDIT OF DUTY PAID ON INPUTS MAY BE TAKE N IMMEDIATELY ON RECEIPT OF SUCH INPUTS IN THE REGISTERED PREMISES O F THE PERSON WHO GET SUCH FINAL PRODUCTS MANUFACTURED ON HIS BEHALF, ON JOB WORK BASIS, SUBJECT TO THE CONDITION THAT THE INPUTS ARE USED IN THE MA NUFACTURE OF SUCH FINAL PRODUCT BY THE JOB WORKER. (2) (A) THE CENVAT CREDIT IN RESPECT OF CAPITAL GOODS RECEIVED IN A FACTORY OR IN THE PREMISES OF THE PROVIDER OF OUTPUT SERVIC E AT ANY POINT OF TIME IN A GIVEN FINANCIAL YEAR SHALL BE TAKEN ONLY FOR AN A MOUNT NOT EXCEEDING FIFTY PER CENT. OF THE DUTY PAID ON SUCH CAPITAL GO ODS IN THE SAME FINANCIAL YEAR: ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 9 PROVIDED THAT THE CENVAT CREDIT IN RESPECT OF CAPITAL GOODS SHALL BE ALLOWED FOR THE WHOLE AMOUNT OF THE DUTY PAID ON SU CH CAPITAL GOODS IN THE SAME FINANCIAL YEAR IF SUCH CAPITAL GOODS ARE C LEARED AS SUCH IN THE SAME FINANCIAL YEAR. PROVIDED FURTHER THAT THE CENVAT CREDIT OF THE ADDITIONAL DUT Y LEVIABLE UNDER SUB-SECTION (5) OF SECTION 3 OF THE CUSTOMS T ARIFF ACT, IN RESPECT OF CAPITAL GOODS SHALL BE ALLOWED IMMEDIATELY ON RECEI PT OF THE CAPITAL GOODS IN THE FACTORY OF A MANUFACTURER. PROVIDED ALSO THAT WHERE AN ASSESSEE IS ELIGIBLE TO AVAIL O F THE EXEMPTION UNDER A NOTIFICATION BASED ON THE VALUE OF CLEARANC ES IN A FINANCIAL YEAR, THE CENVAT CREDIT IN RESPECT OF CAPITAL GOODS RECEIV ED BY SUCH ASSESSEE SHALL BE ALLOWED FOR THE WHOLE AMOUNT OF THE DUTY P AID ON SUCH CAPITAL GOODS IN THE SAME FINANCIAL YEAR. EXPLANATION .- FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIE D THAT AN ASSESSEE SHALL BE 'ELIGIBLE' IF HIS AGGREGATE VALUE OF CLEARANCES OF ALL EXCISABLE GOODS FOR HOME CONSUMPTION IN THE PRECEDI NG FINANCIAL YEAR COMPUTED IN THE MANNER SPECIFIED IN THE SAID N OTIFICATION DID NOT EXCEED RUPEES FOUR HUNDRED LAKHS. (B) THE BALANCE OF CENVAT CREDIT MAY BE TAKEN IN ANY FINANCIAL YEAR SUBSEQUENT TO THE FINANCIAL YEAR IN WHICH THE CAPIT AL GOODS WERE RECEIVED IN THE FACTORY OF THE MANUFACTURER, OR IN THE PREMI SES OF THE PROVIDER OF OUTPUT SERVICE, IF THE CAPITAL GOODS, OTHER THAN CO MPONENTS, SPARES AND ACCESSORIES, REFRACTORIES AND REFRACTORY MATERIALS, MOULDS AND DIES AND GOODS FALLING UNDER HEADING 6805, GRINDING WHEELS A ND THE LIKE, AND PARTS THEREOF FALLING UNDER HEADING 6804 OF THE FIRST SCH EDULE TO THE EXCISE TARIFF ACT, ARE IN THE POSSESSION OF THE MANUFACTURE R OF FINAL PRODUCTS, OR PROVIDER OF OUTPUT SERVICE IN SUCH SUBSEQUENT YEARS . ILLUSTRATION .- A MANUFACTURER RECEIVED MACHINERY ON THE 16TH DA Y OF APRIL, 2002 IN HIS FACTORY. CENVAT OF TWO LAKH RUPE ES IS PAID ON THIS MACHINERY. THE MANUFACTURER CAN TAKE CREDIT UPTO A M AXIMUM OF ONE LAKH RUPEES IN THE FINANCIAL YEAR 2002-2003, AN D THE BALANCE IN SUBSEQUENT YEARS. ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 10 (3) THE CENVAT CREDIT IN RESPECT OF THE CAPITAL GOODS SHALL BE ALLOWED TO A MANUFACTURER, PROVIDER OF OUTPUT SERVICE EVEN IF TH E CAPITAL GOODS ARE ACQUIRED BY HIM ON LEASE, HIRE PURCHASE OR LOAN AGR EEMENT, FROM A FINANCING COMPANY. (4) THE CENVAT CREDIT IN RESPECT OF CAPITAL GOODS SHA LL NOT BE ALLOWED IN RESPECT OF THAT PART OF THE VALUE OF CAPITAL GOODS WHICH REPRESENTS THE AMOUNT OF DUTY ON SUCH CAPITAL GOODS, WHICH THE MAN UFACTURER OR PROVIDER OF OUTPUT SERVICE CLAIMS AS DEPRECIATION U NDER SECTION 32 OF THE INCOME-TAX ACT, 1961( 43 OF 1961). (5) (A) THE CENVAT CREDIT SHALL BE ALLOWED EVEN IF A NY INPUTS OR CAPITAL GOODS AS SUCH OR AFTER BEING PARTIALLY PROCESSED AR E SENT TO A JOB WORKER FOR FURTHER PROCESSING, TESTING, REPAIR, RE-CONDITI ONING, OR FOR THE MANUFACTURE OF INTERMEDIATE GOODS NECESSARY FOR THE MANUFACTURE OF FINAL PRODUCTS OR ANY OTHER PURPOSE, AND IT IS ESTABLISHE D FROM THE RECORDS, CHALLANS OR MEMOS OR ANY OTHER DOCUMENT PRODUCED BY THE MANUFACTURER OR PROVIDER OF OUTPUT SERVICE TAKING THE CENVAT CRED IT THAT THE GOODS ARE RECEIVED BACK IN THE FACTORY WITHIN ONE HUNDRED AND EIGHTY DAYS OF THEIR BEING SENT TO A JOB WORKER AND IF THE INPUTS OR THE CAPITAL GOODS ARE NOT RECEIVED BACK WITHIN ONE HUNDRED EIGHTY DAYS, THE M ANUFACTURER OR PROVIDER OF OUTPUT SERVICE SHALL PAY AN AMOUNT EQUI VALENT TO THE CENVAT CREDIT ATTRIBUTABLE TO THE INPUTS OR CAPITAL GOODS BY DEBITING THE CENVAT CREDIT OR OTHERWISE, BUT THE MANUFACTURER OR PROVID ER OF OUTPUT SERVICE CAN TAKE THE CENVAT CREDIT AGAIN WHEN THE INPUTS OR CAPITAL GOODS ARE RECEIVED BACK IN HIS FACTORY OR IN THE PREMISES OF THE PROVIDER OF OUTPUT SERVICE. (B) THE CENVAT CREDIT SHALL ALSO BE ALLOWED IN RESPEC T OF JIGS, FIXTURES, MOULDS AND DIES SENT BY A MANUFACTURER OF FINAL PRO DUCTS TO,- (I) ANOTHER MANUFACTURER FOR THE PRODUCTION OF GOODS; O R (II) A JOB WORKER FOR THE PRODUCTION OF GOODS ON HIS BEH ALF, ACCORDING TO HIS SPECIFICATIONS. (6) THE DEPUTY COMMISSIONER OF CENTRAL EXCISE OR THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, AS THE CASE MAY BE, HAVING JURISDICTION OVER THE FACTORY OF THE MANUFACTURER OF THE FINAL P RODUCTS WHO HAS SENT THE INPUT OR PARTIALLY PROCESSED INPUTS OUTSIDE HIS FACTORY TO A JOB-WORKER ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 11 MAY, BY AN ORDER, WHICH SHALL BE VALID FOR A FINANC IAL YEAR, IN RESPECT OF REMOVAL OF SUCH INPUT OR PARTIALLY PROCESSED INPUT, AND SUBJECT TO SUCH CONDITIONS AS HE MAY IMPOSE IN THE INTEREST OF REVE NUE INCLUDING THE MANNER IN WHICH DUTY, IF LEVIABLE, IS TO BE PAID, A LLOW FINAL PRODUCTS TO BE CLEARED FROM THE PREMISES OF THE JOB-WORKER. (7) THE CENVAT CREDIT IN RESPECT OF INPUT SERVICE SHA LL BE ALLOWED, ON OR AFTER THE DAY WHICH PAYMENT IS MADE OF THE VALUE OF INPUT SERVICE AND THE SERVICE TAX PAID OR PAYABLE AS IS INDICATED IN INVO ICE, BILL OR, AS THE CASE MAY BE, CHALLAN REFERRED TO IN RULE 9. 9. AS PER RULE 6(1) OF THE SERVICE TAX RULES, 1994, IN CASE OF COMPANY, SERVICE TAX IS TO BE PAID ON A MONTHLY BASIS BY 5 TH OF THE FOLLOWING MONTH (IN CASE OF E-PAYMENT, BY 6 TH OF THE MONTH IMMEDIATELY FOLLOWING THE RESPECTIVE MONTH). HOWEVER, THE PAYMENT FOR THE MONTH OF MARCH IS REQUIRED TO BE MADE BY 31 ST OF MARCH ITSELF. AS PER RULE 6(4) OF THE SERVICE T AX RULES, 1994, THE ASSESSEE CAN PAY FOR PROVISIONAL PAYMENT OF SERVICE TAX IN CASE HE IS NOT ABLE TO CORRECTLY ESTIMATE THE TAX LIABILITY. IN SUCH A SITUATION, HE MAY REQUEST IN WRITING TO THE JURISDICTIONAL ASSISTANT/DY. COMMISS IONER FOR THE SAME. 10. AS PER SECTION 73A OF THE FINANCE ACT, 1994, AN Y PERSON WHO HAS COLLECTED ANY SUM ON ACCOUNT OF SERVICE TAX, IS UND ER OBLIGATION TO PAY THE SAME TO THE GOVERNMENT. HE CANNOT RETAIN THE SUM SO COLLECTED WITH HIM BY CONTENDING THAT THE SERVICE TAX IS NOT PAYABLE. ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 12 11. AS PER SECTION 173A OF THE SERVICE TAX ACT, IN CASE, THE SERVICE TAX IS COLLECTED, THE PROVISION IS AS UNDER : 173A. SERVICE TAX COLLECTED FROM ANY PERSON TO BE D EPOSITED WITH CENTRAL GOVERNMENT:- (1) ANY PERSON WHO IS LIABLE TO PAY SERVICE TAX UNDE R THE PROVISIONS OF THIS CHAPTER OR THE RULES MADE THEREUNDER, AND HAS COLLECTED ANY AM OUNT IN EXCESS OF THE SERVICE TAX ASSESSED OR DETERMINED AND PAID ON ANY TAXABLE SERV ICE UNDER THE PROVISIONS OF THIS CHAPTER OR THE RULES MADE THERE UNDER FROM THE RECI PIENT OF TAXABLE SERVICE IN ANY MANNER AS REPRESENTING SERVICE TAX, SHALL FORTHWITH PAY THE AMOUNT SO COLLECTED TO THE CREDIT OF THE CENTRAL GOVERNMENT. (2) WHERE ANY PERSON WHO HAS COLLECTED ANY AMOUNT, WHICH IS NOT REQUIRED TO BE COLLECTED, FROM ANY OTHER PERSON, IN ANY MANNER AS REPRESENTING SERVICE TAX, SUCH PERSON SHALL FORTHWITH PAY THE AMOUNT SO COLLECTED TO THE CREDIT OF THE CENTRAL GOVERNMENT. (3) WHERE ANY AMOUNT IS REQUIRED TO BE PAID TO THE C REDIT OF THE CENTRAL GOVERNMENT UNDER SUB-SECTION (1) OR SUB-SECTION (2) AND THE SAM E HAS NOT BEEN SO PAID, THE CENTRAL EXCISE OFFICER SHALL SERVE, ON THE PERSON LIABLE TO PAY SUCH AMOUNT, A NOTICE REQUIRING HIM TO SHOW CAUSE WHY THE SAID AMOUNT, AS SPECIFIED IN THE NOTICE, SHOULD NOT BE PAID BY HIM TO THE CREDIT OF THE CENTRAL GOVERNMENT. (4) THE CENTRAL EXCISE OFFICER SHALL, AFTER CONSIDE RING THE REPRESENTATION, IF ANY, MADE BY THE PERSON ON WHOM THE NOTICE IS SERVED UNDER SU B- SECTION (3), DETERMINE THE AMOUNT DUE FROM SUCH PERSON, NOT BEING IN EXCESS OF THE AMOUNT SPECIFIED IN THE NOTICE, AND THEREUPON SUCH PERSON SHALL PAY THE AMOUNT SO D ETERMINED. (5) THE AMOUNT PAID TO THE CREDIT OF THE CENTRAL GO VERNMENT UNDER SUB-SECTION (1) OR SUBSECTION (2) OR SUB-SECTION (4), SHALL BE ADJUSTED AGAINST THE SERVICE TAX PAYABLE BY THE PERSON ON FINALISATION OF ASSESSMENT OR ANY OTH ER PROCEEDING FOR DETERMINATION OF SERVICE TAX RELATING TO THE TAXABLE SERVICE REFERRED TO IN SUB-SECTION (1). (6) WHERE ANY SURPLUS AMOUNT IS LEFT AFTER THE ADJU STMENT UNDER SUB-SECTION (5), SUCH AMOUNT SHALL EITHER BE CREDITED TO THE CONSUMER WELF ARE FUND REFERRED TO IN SECTION 12C OF THE CENTRAL EXCISE ACT, 1944 OR, AS THE CASE MAY BE, REFUNDED TO THE PERSON WHO HAS BORNE THE INCIDENCE OF SUCH AMOUNT, IN ACCORDANC E WITH THE PROVISIONS OF SECTION 11B OF THE SAID ACT AND SUCH PERSON MAY MAKE AN APP LICATION UNDER THAT SECTION IN SUCH CASES WITHIN SIX MONTHS FROM THE DATE OF THE P UBLIC NOTICE TO BE ISSUED BY THE CENTRAL EXCISE OFFICER FOR THE REFUND OF SUCH SURPL US AMOUNT.] ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 13 12. WE FURTHER OBSERVE THAT THE POINT OF TAXATION AS PE R RULE 3 OF POINT OF TAXATION RULES, 2011 IS AS UNDER : RULE 3. DETERMINATION OF POINT OF TAXATION. (NOTIFICATION NO. 18/2011- ST DT. 01.03.2011 AS AMENDED). FOR THE PURPOSES OF THESE RULES, UNLESS OTHERWISE P ROVIDED, POINT OF TAXATION SHALL BE,- (A) THE TIME WHEN THE INVOICE FOR THE SERVICE PROVI DED OR AGREED TO BE PROVIDED IS ISSUED : PROVIDED THAT WHERE THE INVOICE IS NOT ISSUED WITHIN THE TI ME PERIOD SPECIFIED IN RULE 4A OF THE SERVICE TAX RULES, 1994, THE POINT OF TAXATION SHALL BE THE DATE OF COMPLETION OF PROVISION OF THE SERVICE. (B) IN A CASE, WHERE THE PERSON PROVIDING THE SERVI CE, RECEIVES A PAYMENT BEFORE THE TIME SPECIFIED IN CLAUSE (A), THE TIME, WHEN HE RECEIVES SUCH PAYMENT, TO THE EXTENT OF SUCH PAYMENT : PROVIDED THAT FOR THE PURPOSES OF CLAUSES (A) AND (B), - (I) IN CASE OF CONTINUOUS SUPPLY OF SERVICE WHERE T HE PROVISION OF THE WHOLE OR PART OF THE SERVICE IS DETERMINED PERIODICALLY O N THE COMPLETION OF AN EVENT IN TERMS OF A CONTRACT, WHICH REQUIRES THE RE CEIVER OF SERVICE TO MAKE ANY PAYMENT TO SERVICE PROVIDER, THE DATE OF COMPLE TION OF EACH SUCH EVENT AS SPECIFIED IN THE CONTRACT SHALL BE DEEMED TO BE THE DATE OF COMPLETION OF PROVISION OF SERVICE; (II) WHEREVER THE PROVIDER OF TAXABLE SERVICE RECEI VES A PAYMENT UP TO RUPEES ONE THOUSAND IN EXCESS OF THE AMOUNT INDICAT ED IN THE INVOICE, THE POINT OF TAXATION TO THE EXTENT OF SUCH EXCESS AMOU NT, AT THE OPTION OF THE PROVIDER OF TAXABLE SERVICE, SHALL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE (A). EXPLANATION - FOR THE PURPOSE OF THIS RULE, WHEREVER ANY ADVANC E BY WHATEVER NAME KNOWN, IS RECEIVED BY THE SERVICE PRO VIDER TOWARDS THE ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 14 PROVISION OF TAXABLE SERVICE, THE POINT OF TAXATION SHALL BE THE DATE OF RECEIPT OF EACH SUCH ADVANCE. 13. AFTER CONSIDERING THE ABOVE PROVISIONS, IT IS C LEAR THAT THE ASSESSEE HAS TO PAY SERVICE TAX WITHIN DUE DATE AS SET OUT UNDER THE ABOVE PROVISIONS EITHER BY WAY OF CASH/CHEQUE OR BY WAY OF AVAILING CENVAT CREDIT AS PER RULES AS STATED ABOVE, BUT THE ASSESSEE DID NOT DO SO. THE L IABILITY OF SERVICE TAX HAD ALSO ARISEN AS PER THE POINT OF TAXATION RULES, AS STATED ABOVE. 14. NOW, WE HAVE TO EXAMINE THE CASE OF THE ASSESSE E IN THE LIGHT OF THE ABOVE PROVISIONS. DURING THE IMPUGNED YEAR, THE ASS ESSEE HAS CREDIT BALANCE OF SERVICE TAX PAYABLE AS ON 31.03.2013 OF RS.1,16, 09,924/- WHICH WAS TO BE PAID UPTO 31.03.2013 BY THE ASSESSEE, BUT HE DID NO T PAY. FURTHER, THE ASSESSEE HAD PAID A SUM OF RS.30,83,457/- BEFORE FI LING OF IT RETURN. AS PER SECTION 43B(A), THE ABOVE OUTSTANDING PAYMENT WAS T O BE PAID UPTO THE DATE OF FILING OF RETURN OF INCOME. AS PER METHOD OF ACC OUNTING, THE ASSESSEE HAS ALSO NOT INCLUDED THE SERVICE TAX RECEIVED BY HIM I N THE TURNOVER. IN FACT, THE ASSESSEE WAS LEGALLY OBLIGED TO DECLARE ITS TURNOVE R INCLUSIVE OF SERVICE TAX RECEIVED. THE ASSESSEE CANNOT BE EXONERATED FROM IT S LIABILITY BY SAYING THAT HE ACCOUNTED FOR THE SERVICE TAX RECEIVED SEPARATEL Y. SINCE THE ASSESSEE DID ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 15 NOT PAY SERVICE TAX AS CONTEMPLATED U/S. 43B(A) AND AS PER ABOVE PROVISIONS OF SERVICE TAX ACT WITHIN THE STIPULATED TIME, THER EFORE, THE LD. CIT(A) HAS RIGHTLY DISALLOWED THE SAME U/S. 43B OF THE IT ACT. THE CASE LAWS RELIED BY THE ASSESSEE ARE BASED ON DIFFERENT FOOTINGS AS IN ALL THE DECISIONS IT WAS HELD THAT SERVICE TAX WAS NOT AT ALL PAYABLE BECAUSE THE SERV ICE TAX WAS NOT RECEIVED FROM THE CUSTOMER. THE LAW PREVAILING AT THAT PART ICULAR TIME WAS THAT SERVICE TAX WAS TO BE PAID TO THE GOVERNMENT ONLY WHEN SERV ICE TAX IS RECEIVED FROM THE SERVICE RECEIVER TO THE SERVICE PROVIDER. SUBSE QUENTLY, THERE IS CHANGE IN THE LAW WHICH PROVIDES THAT SERVICE TAX IS TO BE DE POSITED BY THE SERVICE PROVIDER EVEN IF SERVICE TAX IS NOT PAID BY THE SER VICE RECEIVER TO THE SERVICE PROVIDER. THEREFORE, IN ALL THOSE DECISIONS IT WAS HELD THAT SERVICE TAX OUTSTANDING IS HIT BY THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT. 1961. DUE TO THE CHANGE IN THE LAW NOW THOSE DECISI ONS DOES NOT HELP TO THE ASSESSEE. MOREOVER, THE ASSESSEE HAS FILED THE SERV ICE TAX RETURNS BELATEDLY, I.E., FOR APRIL TO JUNE ON 16.04.2015, FOR JULY TO SEPTEMBER AND HALF YEARLY FROM OCTOBER TO MARCH, 2013 ON 08.07.2015. IN VIEW OF AL L THESE FACTS, THE LD. CIT(A) HAS RIGHTLY DEALT WITH THE ISSUE IN QUESTION BY GIV ING ELABORATE FINDINGS IN THE IMPUGNED ORDER REGARDING CONFIRMATION OF ADDITION U /S. 43B OF THE ACT, WHICH WE DO NOT FIND FIT TO BE INTERFERED WITH. ACCORDING LY, THE APPEAL OF THE ASSESSEE DESERVES TO BE DISMISSED. ITA NO. 6683/DEL./2017 & SA NO. 748/DEL/2017 16 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE AND T HE STAY APPLICATION FILED ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MARCH, 2018. SD/- SD/- (H.S. SIDHU) (L.P . SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23.03.2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI