Appeal allowed for non-scheduled aircraft service tax non-payment up to 30.11.2009 without deliberate suppression intent

The CESTAT NEW DELHI allowed the appeal regarding non-payment of service tax for non-scheduled aircraft operations up to 30.11.2009. The case involved providing aircraft services to various entities for travel within India based on pre-fixed charges for duration and destination. The tribunal held that mere non-disclosure of receipts in service tax returns does not constitute suppression of facts warranting extended limitation period invocation. Following Pushpam Pharmaceuticals SC precedent, suppression must be deliberate with intent to evade payment. Without establishing such intent from record materials or assessee conduct, extended limitation cannot be invoked. The Commissioner (Appeals) order dated 31.01.2018 was set aside.

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Issues Involved:
1. Classification of services provided by the appellant.
2. Invocation of the extended period of limitation under section 73(1) of the Finance Act, 1994.

Summary:

1. Classification of Services Provided by the Appellant:
The appellant, engaged in non-scheduled operation of aircraft, believed their services were for 'air transportation of passengers' and thus did not pay service tax. However, a show cause notice dated 23.10.2013 proposed a demand of service tax under the category of 'supply of tangible goods'. The Additional Commissioner confirmed the demand, and the Commissioner (Appeals) dismissed the appellant's appeal.

2. Invocation of the Extended Period of Limitation:
The appellant contended that the extended period of limitation could not be invoked as there was no willful suppression of facts with intent to evade tax. The Additional Commissioner held that mere suppression was enough for invoking the extended period. The Commissioner (Appeals) confirmed this without examining the appellant's contention regarding the necessity of intent to evade payment of service tax.

The Tribunal referred to several decisions, including Pushpam Pharmaceutical Co. vs. Commissioner of Central Excise, Bombay, where the Supreme Court held that suppression of facts must be deliberate and with an intent to evade payment of duty. This principle was reaffirmed in subsequent cases such as Anand Nishikawa Company Ltd. vs. Commissioner of Central Excise and Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur. The Delhi High Court in Bharat Hotels Limited vs. Commissioner of Central Excise (Adjudication) and Mahanagar Telephone Nigam Ltd. vs. Union of India and others also emphasized that mere non-disclosure does not amount to willful suppression unless there is an intent to evade tax.

The Tribunal concluded that the mere non-disclosure of receipts in the service tax return does not imply an intent to evade payment of service tax. The impugned order dated 31.01.2018 by the Commissioner (Appeals) was set aside, and the appeal was allowed.

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