TaxTMI 
TaxTMI 
2021 (2) TMI 942
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....enalty of Rs. 1 lac upon her. 4. The Appellant, which is a company incorporated under the Companies Act and having its office at Lucknow, registered itself with the service tax Department under 'cleaning activity' service as defined under section 65(24)(b) of the Finance Act, 1994 [the Finance Act], which service is taxable under section 65(105)(zzzd) of the Finance Act. The Appellant claims that it provided 'cleaning activity' services to government hospitals, educational institutes and non-commercial organizations, though a sizable portion of the revenue was generated from Sanjay Gandhi Post Graduate Medical Institute, Lucknow[SGPGMI]. 5. In response to the letters issued by the Department, the Appellant submitted a letter dated August 13, 2007 to the Assistant Commissioner with a copy of the balance sheet for the financial years 2005-06 & 2006-07 and explanation for non-payment of service tax on the consideration received by the Appellant from non-commercial organizations like SGPGMI and Hindustan Aeronautics Limited [HAL]. The Department, however, was not satisfied with the explanation offered by the Appellant and issued a show cause notice dated October 28, 2009[first show....
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....ue was dismissed. The Tribunal observed as follows : "4. We have carefully gone through the records of the cases and submissions made. We first examine the limitation aspect in the present appeals. We find that the Revenue was having full knowledge of the activities of the appellant as early as 13.08.2007, however, by invoking extended period of limitation with allegation of suppression show cause notice was issued on 28.10.2009 and the said show cause notice was issued for the period from November, 2005 to January, 2008. We, therefore, find that the said show cause notice is hit by limitation and, therefore, not sustainable. Therefore, we set aside the impugned Order-in-Appeal dated 04.03.2011. We also find that the ruling by the Hon'ble Supreme Court in the case of Nizam Sugar Factory (supra) is squarely applicable in respect of the show cause notice dated 29.09.2011, therefore, show cause notice dated 29.09.2011 is not sustainable. We, therefore, set aside the confirmation of demand of Service Tax of Rs. 18,65,775/- along with all penalties sustained through impugned Order-in-Appeal dated 29.01.2014 and set aside the impugned Order-in-Appeal dated 29.01.2014 to that effect. W....
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.... Shri Harish Kapoor and Smt. Madhu Kapoor, Directors of the Appellant, were also required to show cause as to why personal penalty should not be imposed upon them under section 78A of the Finance Act. 11. The Appellant filed a reply dated December 12, 2019 contending that the extended period of limitation could not have been invoked and the relevant portion of the reply submitted by the Appellant is as follows : "24. Defence reply: 1. xxxxx xxxxx xxxxx 2. xxxxx xxxxx xxxxx 3. xxxxx xxxxx xxxxx A. That the department has issued the Show Cause Notice to the Noticee third time by invoking extended period of limitation. Before this department had issued Show Cause Notice No. 83/ADC/LKO/2009 dated 28.10.2008 & 67/ADC/LKO/ST/2011 dated 29.09.2011 by invoking extended period of limitation on same issue and both the demands were set aside by the Hon'ble CESTAT. Therefore invocation of extended period for the third time on the same issue (taxability of Cleaning Services rendered to the government organization) is unwarra....
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.... are not covered under the said Notification. Further, looking to the said fact that no document was made available by the Noticee to the Investigating Officers either at the time of Audit or during investigations by the officers of the DGGI and that the said details of the services being provided by the Noticee were collected by the officers from the service recipients clearly proves that the Noticee wanted to suppress the information from the department and thus the extended period under the proviso clause of Section 73(1) has been rightly invoked in the present SCN. 29.3 The next contention of the Noticee is regarding the fact that they had wrongly availed the benefit of Serial No. 9 of Notification No. 25/2012-ST dated 20.6.2012 in their periodical ST-3 returns during the disputed period, therefore, the issue relates to taxability and interpretation of exemption Notification. I find that I have already discussed this contention of the Noticee in the previous para, wherein I have held that provisions of the exemption Notification are quite clear and leave no doubt about inclusion or non-inclusion of any service. Further, it is also a fact that the Noticee had collected the se....
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....udgment is applicable to the present case." [emphasis supplied] 13. Shri Vineet Kumar Singh and Smt. Nisha Bineesh, learned counsel for the Appellant, made the following submissions: (i) The extended period of limitation could not have been invoked in the facts and circumstances of the case, more particularly when since August 13, 2007 all the relevant information with the balance sheets for the financial years were available with the Department, including the particulars of the exemption and the exemption notifications which were mentioned in the periodical ST-3 returns; (ii) The extended period of limitation could not have been invoked after successful completion of the audit as in the present case the demand was raised by the third show cause notice dated November 13, 2019 for the period from April 01, 2014 upto June 2017, whereas the previous audit was done on March 31, 2016; and (iii) When the demands made in the earlier two show cause notices dated October 28, 2009 and September 29, 2011 for the period from November 2005 to January 2008 and 2006-07 to 2009-10 respectively was confirmed by the Department and was set aside by the Tribunal by order dated November 20, 20....
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....Appeals) was also dismissed. A second show cause notice dated September 29, 2011 was thereafter issued to the Appellant for the period 2006-07 to 2009-10. The demand made in the second show cause notice was also confirmed, though the Commissioner (Appeals) did reduce the demand 17. It needs to be noted that the extended period of limitation was sought to be invoked in the first and the second show cause notices. When the matter came up before the Tribunal, the issue regarding invocation of the limitation period was raised by the Appellant. The Tribunal accepted this contention and held that since the Revenue had full knowledge of the activities of the Appellant since August 13, 2007, the extended period of limitation alleging suppression of facts could not have been invoked. The demand was, therefore, set aside for this reason alone and the two Appeals filed by the Appellant were allowed. 18. According to learned Counsel, the issue raised in the third show cause notice dated November 13, 2009 for the period April 01, 2014 to June 20, 2017 is the same issue which was raised in the first two show cause notices as all the three show cause notices relate to the payment of service t....
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....s are as follows : "8. Without going into the question regarding Classification and marketability and leaving the same open, we intend to dispose of the appeals on the point of limitation only. This Court in the case of P & B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in (2003) 3 SCC 599 = 2003 (153) E.L.T. 14 (S.C.) has taken the view that in a case in which a show cause notice has been issued for the earlier period on certain set of facts, then, on the same set of facts another SCN based on the same/similar set of facts invoking the extended period of limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the department. It was observed in para 14 as follows : "14. We have indicated above the facts which make it clear that the question whether M/s. Pharmachem Distributors was a related person has been the subject-matter of consideration of the Excise authorities at different stages, when the classification was filed, when the first show cause notice was issued in 1985 and also at the stage when the second and the third show cause notices were issued in 1988. At all these stages, the ....
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....e Notice was for a subsequent period and/or it cannot be taken into consideration as it is not known when that Show Cause Notice was dropped. If the Department wanted to take up such contentions it is for them to show that that Show Cause Notice was not relevant and was not applicable. The Department has not brought any of those facts on record. Therefore, the Department cannot now urge that findings of the Collector that that Show Cause Notice was on a similar issue and for an identical amount is not correct." 9. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant." 20. Similar is the position in the present case. The Department was aware of the facts when the first s....
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....at the Appellant had suppressed information or facts from the Department. 24. What is further important to note is that on July 05, 2016, the Department also issued a notice to the Appellant for conducting an audit for the period 2012-13 to 2015-16. The Appellant was required to furnish all the relevant documents, including documents relating to details of the exempted services. The audit report does not mention that the Appellant had provided any service which was not exempted under the various Notifications and the audit report was also approved by the Deputy Commissioner (Audit). 25. In regard to the audit report, the Additional Director General has even doubted whether the relevant documents were placed before the officers conducting the audit. In case the Additional Director General had any doubts, the audit report could have been called for and examined. Even otherwise, there is a detailed procedure for conducting an audit. It specifically requires physical verification of the documents and in the present case the Appellant was also required to give details of the exempted services. There was really no occasion for the Additional Director General to doubt the correctness ....
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....pellant has misstated or suppressed the facts from the departments. We find that the Hon'ble High Court of Bombay in the case of Rajkumar Forge Ltd. - 2010 (262) E.L.T. 155 (Bom.) held in paragraph No. 13. "13. It is an undisputed fact that insofar as the petitioners are concerned, audit of the petitioners' factory was carried out on three dates, i.e., 6th September, 1993, First November, 1995 and 2nd September, 1994. The petitioners vide their letter dated 6th September, 1993 have recorded the visit of the audit party and have also replied to the audit objections raised by the said audit party in respect of scrap generated and have informed the authorities that they were debiting Rs. 80,000/- at the rate of Rs. 1,000/-per Metric Ton and that they were also debiting differential duty totalling to Rs. 63,318/- in respects of Mill Rollers which was debited under PLA dated 3rd September, 1993. Therefore, the petitioners vide their letter dated 5th July, 1995 have informed the Superintendent of the respondents that they had debited Rs. 2,08,760/- against the Scrap Generation at sub-contractor end, where material is sent for processing under Rule 57F(3) for the period January, 94 to Ma....