TaxTMI 
TaxTMI 
2017 (3) TMI 616
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....n convertible foreign exchange on account of taxable services namely, "Intellectual Property Service' and 'Business Auxiliary Services' received from the associate company M/s Amserve. The appellant agreed with the audit objection and deposited Rs. 46,08,759/- and Rs. 1,60,68,000/- respectively. Further, the audit team also observed that the appellant had not paid service tax of Rs. 8,01,78,254/- under the taxable category of 'Franchise Service' in respect of income earned by it during the period October' 2003 to March' 2007 under the heads of accounts namely, 'Joining and Business Fee', 'Business Renewal Fee' and 'Back to Future Fee'. On the basis of such audit objection, the Department issued Show Cause Notice dated 12.03.2009, proposing demand of service tax along with interest and imposition of penalties on the appellant. The said SCN was adjudicated vide the impugned order dated 31.01.2011, wherein service tax demand of Rs. 8,01,68,254/- was confirmed along with interest under the taxable category of 'Franchise Service' by invoking the extended period of limitation under the proviso to Section 73(1) of the Finance Act....
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.... entries, would have only prospective effect and cannot be applied retrospectively. Thus, he argued that the amounts deposited on that account, which were appropriated as service tax in the impugned order is not legally sustainable and that the interest liability confirmed on such account is accordingly, not proper and justified. 3.1 On the other hand, the ld. A.R. appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that since on the basis of audit of the appellant's unit in 2008, the Department became aware of the activities, which the appellant had suppressed, the proceedings initiated thereafter are not barred by limitation of time. He relied on the judgment of Hon'ble Supreme Court in the case of CCE, Visakhapatnam -Vs.- Mehta & Co.- 2011 (264) ELT 481 (S.C.) and CCE, Mumbai -Vs.- Kalvert Foods India Pvt. Ltd.- 2011 (270) ELT 643 (S.C.) and also the judgment of Hon'ble Allahabad High Court in the case of CCE, Gaziabad -Vs.- Rathi Steel Power Ltd.-2015 (321) ELT 200 (All.) and of Hon'ble Gujarat High Court, in the case of CCE, Surat -Vs.- Neminath Fabrics Pvt. Ltd.- 2010 (256) ELT 369 (Guj.). 3.2 The ld. A.R. f....
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....ion of fact was issued in 2009. While we are aware that the relevant date for issue of demand is with reference to periodical returns to be filed, the Department has to allege and establish with supporting evidence, the existence of factors indicating wilful mis-statement/suppression of facts. It should be a positive act of the appellant. The particulars, which formed basis of demand were all maintained and recorded in books of the appellant. 7. The show cause notice in this case has been issued by the Department alleging 'wilfull and intentional suppression' of facts by the appellant. It is trite in law that the suppression (intentional and deliberate) can never be said to exist when material and relevant fact forming the basis of the demand were already within the knowledge of the department. Accordingly, the pre-conditions for applicability of the proviso to Section 73 (1) ibid cannot be said to be made and in such eventuality, the extended period of limitation cannot be invoked and the demand to be confined to the normal period of one year. 8. In context with issuance of show cause notice, where there is no involvement of suppression on the part of the assessee, the Hon'ble S....
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....ll the relevant facts were within the knowledge of the Department. Further, in the case of Loyd Chiles Offshore Ltd. (supra), the Hon'ble Supreme Court held that since the Department was all throughout aware of the Appellant's operations, the extended period of limitation under proviso to Section 28 of the Customs Act cannot be invoked. In the case of Chemphar Drugs & Liniments (supra), it has been held by the Hon'ble Supreme Court that when the Department had full knowledge and the assessee's non-disclosure was based on its interpretation of the law, the extended period of limitation could not have been invoked. 9. The judgment of Hon'ble Supreme Court and High Courts relied upon by the Revenue are distinguishable from the facts of the present case, inasmuch as the assessees in those cases were indulged in suppression, mis-statement, fraud, collusion etc., with intent to evade payment of duty and only on the basis of proceedings initiated by the Department, the desired information/particulars were furnished. In such circumstances, it has been held by the judicial forums that once it is established that pre-conditions of the proviso to Section 73(1) ibid/Section 11A ibid (i.e.....