TaxTMI 
TaxTMI 
2020 (1) TMI 187
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....led "AGREEMENT FOR PROVIDING ACCESS TO BRANCH NETWORK" was signed on 01.12.2008 and the term of the agreement was for a period of ten years. In terms of the first agreement, the appellant was paid a sum of INR 20,00,00,000/-,with the prelude "... M/s. ShriramChits who hereby agrees to grant SFSH or its nominees,the right to access to its entire branch network and agency force, both present and future ...", during the existence of the agreement. The second agreement was for the payment of INR 15,00,00,000/- and for the same reasons. 3. Picking up the above, a Show Cause Notice dated 19.10.2011 was issued by the Revenue on the ground that the consideration received by the assessee for having provided support services of business carried out by M/s. SFSH fell within the purview of 'Business Support Services' taxable with effect from 01.05.2006. It was inter alia alleged in the Show Cause Notice that the appellant had provided "operational assistance for marketing" to M/s. Shriram Capital Ltd. (formerly M/s. SFSH) or its nominees, for keeping intact entire branch network and agency force ready to use whenever requested; that the appellant was liable to pay Service Tax of Rs. 3,99,30,....
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....973 (Tri. - Mum.); (x) Mormugao Port Trust Vs. C.C.E. & S.T., Goa - 2017 (48) S.T.R. 69 (Tri. - Mum.). 5. The Adjudicating Authority, i.e., the Commissioner of Central Excise, Customs and Service Tax, Hyderabad- III vide impugned Order-in-Original dated 31.03.2013 after considering the submissions of the appellant, however, confirmed the demands as proposed in the Show Cause Notice along with interest and penalties and this has led to the present litigation before this forum. 6. Shri. S. Thirumalai, Ld. Advocate, appeared for the assessee-appellant and Shri. A.Rangadham, Ld. Departmental Representative, appeared for the Revenuerespondent. 7.1 Ld. Advocate for the appellant seriously contended that the impugned demand is not tenable primarily for the reason that up to the date of introduction of Negative List, mere agreeing to provide any service was never a taxable event. He also further emphasized that even the Business Support Service was brought into the statute with effect from 01.05.2006; the first agreement having been entered into on 01.12.2005, the alleged services cannot be taxed since the chargeability was not having retrospective effect, or for the events that h....
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....en picked up from these very statutory documents and therefore, there cannot be any scope to allege suppression of the same. 12.1 Business Support Services introduced with effect from 01.07.2012 covers only specific activities in the inclusive part of its definition and only those specific activities, if carried out, would get covered under Business Support Services. Admittedly, the appellant is nowhere alleged to have provided any of those services which are specified therein, but rather has only asked to 'keep intact ...' for access whenever required. The exclusive definition of Business Support Service clearly does not cover this service. 12.2 Further, the Revenue has nowhere endeavoured to bring on record anything as to whether the appellant did provide any other service other than merely agreeing to grant M/s. SFSH or its nominees right to access its branch network and agency force during the period under consideration. Although the consideration appears to be disproportionate, but however, in the absence of any evidence on record, we also cannot go any further. The law as it stood up to the introduction of Negative List did not take under Service Tax the agreement for pro....
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....ed, the question of taxing an attendant monetary transaction will not arise. Contributions for the discharge of liabilities or for meeting common expenses of a group of persons aggregating for identified common objectives will not meet the criteria of taxation under Finance Act, 1994 in the absence of identifiable service that benefits an identified individual or individuals who make the contribution in return for the benefit so derived." We note that all other decisions referred to/relied on by the Ld. Advocate for the appellant are in the same line as that of the above decisions. 14.3 The common takeaway from these decisions is that the scope of Business Support Service would include only such specific activities which are rendered by the service provider to promote or market to the customers and hence, merely agreeing to grant the right to access as in this case, as per agreement, would not form part of the exclusive definition of 'Business Support Service'. 15. In view of the above discussions, we are of the considered opinion that the liability has been wrongly fastened under Business Support Service. Firstly, the definition of 'Business Support Service' did not cover me....
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....fully suppressed the fact of receipt ... and thereby contravened the provision with an intention to evade payment of tax ... Hence, the proviso to Section 73 (1) of the Finance Act, 1994 ... invokable ..." 17.2 Clearly, the Show Cause Notice is issued alleging wilful 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 facts forming the basis of the demand were already within the knowledge of the Revenue. Accordingly, the pre-conditions for applicability of the proviso to Section 73 (1) ibid. cannot be said to be met. In such eventuality, the extended period of limitation cannot be invoked and the demand to be confined to the normal period of one year. 17.3 In one of the decisions of the Co-ordinate Bench of New Delhi in the case of M/s. Amway India Enterprises Pvt. Ltd. Vs. Commissioner of C.Ex., New Delhi reported in 2017 (3) G.S.T.L. 69 (Tri. - Del.), the Ld. Bench while analysing the applicability of larger period in a more or less similar set of facts, has held that the larger period could not have been invoked. The relevant portion of the findings r....
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....ble Supreme Court in the case of Pioneer Scientific Glass Works (supra) held that the Department could not have alleged suppression at a later date when all 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 judgments 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, misstatement, 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 circumsta....