TaxTMI 
TaxTMI 
2016 (12) TMI 1279
X X X X Extracts X X X X
X X X X Extracts X X X X
....s in that regard and eventually in 2009 it registered itself as a service tax assessee, and started filing returns. The proceedings culminated in a Show Cause Notice (SCN) under Sections 75/83 of the Finance Act, 1994 and Section 11A of the Central Excise Act, 1944 asking the appellant to show cause why assessments for the years that it had not filed returns (by invoking the extended period) should not be completed. During the course of these proceedings, the assessee admitted its liability and, of the demand forRs.44,04,621/-, it appears to have deposited Rs. 28 lakhs. These facts are not in dispute. What the assessee did, however, was to contest its liability under Section 78 of the Finance Act, 1994, which enjoins a mandatory penalty of 100% of the tax demanded. It, however, did not succeed on this score. Both the Commissioner (Service Tax) and the CESTAT ruled against the appellant. 4. Learned senior counsel for the appellant, Mr. Hari Shankar, urges that the controlling expression applicable - and found in both Section 78 of the Act and second proviso to Section 11A is "fraud", "collusion", "wilful misstatement", "suppression of facts" or "contravention of any of the provisio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....TAT). 6. The preceding discussion on facts reveals that even though the assessee had established its business earlier, it started filing service tax returns only in 2009, i.e. more than three years after the levy was introduced for the first time. Concededly, this case does not concern itself with the post 2009 conduct but rather with what the assessee did after receipt of notice under Sections 75/78. The SCN received by the assessee culminated in an order, dated 07.05.13 by the Additional Commissioner. In reply to the show cause notice, the assessee did not dispute its liability; however, its reply stated that there was no awareness about its liability before 2009 and that it did not indulge in suppression or misstatement of fact. The reply stated inter alia, as follows: "Sub: Reply to Show Cause notice dated 23.04.2012 Sir, With reference to the above said subject in the matter of Future link India, it is submitted as under: 1. M/s Future Link India is my proprietorship concern. I am doing business of Direct Sales Agent for the products of ICICI Bank (Home Finance). This was my first business venture for livelihood of myself and my family. 2. Like me several other Direct Sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed and I could not believe that term 'Business Auxiliary Service' would include the type of business I was doing therefore this mistake happened. Even IHFC never informed me during their frequent meetings that these services were covered under Service Tax provisions and I should include Service Tax in the Invoices raised on them. 9. I can say that I had no intention of evading Service Tax and I have paid following amount of Service Tax and filed the Returns: S.No. Year Period Receipts inclusive of Tax Rate of Tax Taxable Amount Tax Due Tax Paid Tax Pending 1. 2006-07 09.2006 707042.00 12.36% 591500.00 73109.00 77109.00 0.00 2. 2006-07 03.2007 203984 4.00 12.36% 1799700.00 222444.00 222444.00 0.00 3. 2007-08 09.2007 4246527.00 12.36% 3779394.00 467133.00 468741.00 0.00 4. 2011-12 09.2011 2235397.00 10.3% 2026651.00 208746.00 226782.00 0.00 5. 2011-12 03.2012 919395.00 10.3% 833540.00 85855.00 87143.00 0.00 10. It is submitted that there is no cause for making best judgment assessment. I am ready to produce all the documents required for the purposes of assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nnot be termed "suppression", The Party had an obligation to comply with the statutory provisions and to furnish the information as required there under. Section 68(1) of the Act, as stood during the relevant period, provides that every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed, Section 66 provides the rate of tax as well as levy of the tax on the services specified therein. Undoubtedly, the Party has abused the facility of self-assessment provided under Section 70, which directs that every person liable to pay the Service Tax shall himself assess the tax due on the services provided by him and shall furnish the periodical returns as prescribed. Thus, the afore mentioned statutory provisions of service tax cast an obligation upon the noticee to get registration; to pay service tax: and to file proper periodical returns. All these facts narrated above go to show that the noticee did not discharge the proper Service Tax liability by non-compliance of the obligations cast upon them by the statutory provisions. 5.3.10 It is needless to recapitulate that this case h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing demand of Service Tax for the period in dispute through show cause notice dated 3-6-1998. The ratio of law laid down in Pushpam Pharmaceuticals Co. v. CCE, Bombay [1995 (78) E.L.T 401 (S.C.)] and MIs Ultra Flax (P) Ltd. v. CCE, Faridabad [2004 (167) E.L.T. 354 (Tri. Del.)]referred by the Counsel, is not attracted to the facts of the present case. There cases were under the Central Excise Act and there was material on record to suggest therein that there was no suppression of facts by the party from the department. But such is not the position in this case." 5.3.12 In the case of Mysore Rolling Mills Private Limited Vs. Collector of Central Excise, Belgaum reported in 1987(28) E.L.T. 50 (S.C.), the appellant manufactured aluminum wire rods out of duty paid E.C. grade aluminum ingots on job basis on behalf of various customers. Between September 1974 and May 1977, it recovered a sum of more than Rs. 6 lakhs as handling charges from customers by issue of debit notes over and above under regular invoices, which were includible in the assessable value being pre-manufacturing cost. Accepting the findings at the lower authorities, the Hon'ble Supreme Court field that non-disclosu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e available in the specified records, penalty shall be reduced to fifty per cent of the service tax so not levied or paid or short-levied or short-paid or erroneously refunded. Provided further that where such service tax and the interest payable thereon is paid within thirty days from the date of communication of order of the Central Excise Officer determining such service tax, the amount of penalty liable to be paid by such person under the first proviso shall be twenty-five per cent of such service tax; Provided also that the benefit of reduced penalty under the second proviso shall be available only if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso. Provided also that in case of a service provider whose value of taxable services does not exceed sixty lakh rupees during any of the years covered by the notice or during the last preceding financial year, the period of thirty days shall be extended to ninety days." 9. The first issue is whether the appellant is right in contending that there was no suppression of material facts, or fraud or collusion, justifying invocation of the extended period of 5 years in t....