TaxTMI 
TaxTMI 
2019 (10) TMI 1109
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....the compliances to be followed by the service providers. The appellant obtained registration with the authorities on 11.02.1999 belatedly, and started discharging service tax on own ascertainment basis. There were existing service contracts entered well before the date of introduction of service tax in respect of which clients were not reimbursing the service tax amount. The fact regarding nonpayment of service tax by clients was duly informed by the assessee to the Superintendent vide letter dated 07.02.2000 wherein it was stated that the levy of service tax was new and therefore there had been delay in obtaining registration and making other compliances. It was also stated in the said letter that they were depositing service tax which was being reimbursed by the clients and in cases, where the tax amount could not be collected, the same was not being deposited. The appellant wrote another letter dated 14.06.2001 informing that despite repeated reminders, the clients were not reimbursing the service tax amount and accordingly, they were not depositing the tax amount which could not be collected. The appellant also requested that in case the department desired any documents for ver....
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....ne and therefore there was suppression on the part of the appellant to evade payment of tax and accordingly, the Ld. Commissioner held that extended period of limitation was righty applicable. Based on the aforesaid observation, the Ld. Commissioner vide De-novo Order dated 16.03.2010 confirmed the demand of service tax of Rs. 87,54,969/- alongwith interest u/s 75 and imposed penalty u/s 76 & 78 of the Act. 3. Sri Rajeev Agarwal, CA, appeared for the appellant and Sri H S Abedin, Ld. Asst. Commissioner, (DR) appeared for the Revenue. 4.0 The Ld. CA fairly submitted that the appellant is not disputing the applicability of service tax on security services rendered by them. It is his only submission that the very Show Cause Notice dated 17.01.2005 issued for the extended period of limitation is legally not sustainable and hence the entire proceeding is liable to be set aside. To substantiate his contentions he made the following submissions:- 4.1 That the appellant had the understanding that only the service tax component which was paid by the service recipient needs to be deposited and wherever the tax amount could not be collected, the same was not to be deposited. This unders....
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....tax and never raised any objection nor referred the matter to the jurisdictional Asst. Comm / Dy Commissioner, as was required under the said provision when there was short payment of tax. Accordingly, he submitted that when the scrutiny of the returns was undertaken and the facts were known, invoking the extended period of limitation in the impugned SCN and sustaining the same by the Ld. Commissioner is bad in law. 4.4 That though the said understanding of the appellant was not in consonance with the legal provisions, at best it can be said that there was ignorance on the part of the assessee appellant more so when the tax on security service was newly introduced. He relied on the Tribunal's decision in Sterlite Telelink Ltd. vs. CCE Vapi 2014 (312) ELT 353 (Tri-Ahm) to state that though ignorance of law cannot be pleaded as a valid ground,yet it is not sufficient to prove willful suppression for justifying extended period of limitation. 4.5 To further his arguments on time bar, he also submitted that the entire proceedings have been initiated in the impugned SCN on the basis of Balance Sheet of the appellant Company which the authorities compared with the service tax returns ....
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.... Abedin, the Ld. DR, reiterated the findings made by the Ld. Commissioner in the impugned order. He submitted that since the appellant is not contesting the levy of service tax, they cannot be absolved from the demand merely because they choose to write letters to the Department. He also submitted that since they have not disclosed the total amount of invoices raised in the periodical returns, they suppressed the value of taxable services. He accordingly submitted that the appellant cannot be given relief on the ground of time bar and hence, their appeal is liable to be dismissed. 6. Heard both sides and perused the appeal records. 7. We find that the issue for consideration before us, in this second round of litigation, is whether the appellant has wilfully suppressed information so as to justify invocation of extended period of limitation. The Tribunal vide Final Order dated 26.10.2007 directed the adjudicating authority to compute the service tax liability by extending cum-tax benefit where the service tax amount has not been realised by appellant and also to decide the issue on limitation. The Ld. Commissioner in de-novo adjudication vide the impugned order has reduced th....
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.... appellant in respect of the goods described in the communication, it was open for the Department to question the classification suggested by the appellant and take suitable steps against the appellants on the ground that as per the Chapter Note, the activity indicated in the communication amounted to manufacture. The material placed in the communication was sufficient to alert the Revenue on the aspect, whether the activity should be treated as 'manufacture' and necessary action initiated as required by Section 11A of the Act. It transpires from the record that, the Deputy Commissioner had made an order on 3-2-1998 (41/98), on the basis of the said letter dated 28-7-1992, in respect of one of the items covered thereunder and held that, there was no suppression of facts in the case as the assessee has already brought the matter to the notice of the jurisdictional Asstt. Commissioner under the said letter. If under the same communication, the Revenue considered that there was no suppression of facts in respect of one of the items, namely, 8A RED, it does not stand to reason as to why a different stance should be adopted by the Revenue for the said two products in respect of which th....
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....ressed to Addl. Commissioner, CESTAT, Kolkata, wherein it is stated that the authenticity of the above referred letters are not verifiable. We find that the said issue is purely a factual issue and being raised for the first time in this appeal. We are unable to accept the said pleadings for the reason that the Ld. Commissioner,in the discussions and findings part of the impugned denovo adjudication order, has not disowned the communications made vide letters dated 07.02.2001 and 14.06.2011. Had there been doubt regarding the authenticity of the said letters of the assessee, which is not disowned by Ld. Commissioner in the order, the Department being an 'aggrieved person' could have preferred an appeal which has not been done. In any case, the Addl. Commissioner's letter dated 24.08.2012, issued after more than 2 years of the issue of impugned order dated 16.03.2010, is a communication from an Officer below the rank of Commissioner cannot be entertained at this stage, since not disowned by the Ld. Commissioner himself. In any case, the very fact that the Ld. Commissioner on being satisfied that tax amount could not be recovered by appellants from its clients, he reduced the tax dem....
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....section (1) of Section 73 of the Finance Act, 1994. A survey of the different components of Section 73(1) would clearly show that action could follow within the limit of time prescribed under that sub-section only on the existence of the vitiating elements which are enumerated therein. No such ground has been found by the authorities below and the power to invoke Section 73 has not been done within the time prescribed in sub-section (1) thereof which was the only provision which governed the parties at that relevant point of time i.e. to say till the end of the financial year 2007-2008. In this view of the matter, the appellant is entitled to succeed on this ground as well. 6. Since reference was made during submissions to sub-section (2A) of Section 73 of the Finance Act, 1994, we may note that what is attempted to be resurrected through that provision is what could have loss otherwise to the Revenue if action proceeded under Section 73(1) would fail before the Appellate Authority or Tribunal or Court on a ground that the notice issued under sub-section (1) is not sustainable for the reason that the different vitiating elements enumerated therein are not established. 7. The ....