TaxTMI 
TaxTMI 
2021 (9) TMI 897
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....S Embassy ]. The appellant claims that it was the sole and exclusive service provider for the US Embassy and operated from a desk set up within the premises of the US Embassy. On such services, the appellant was availing exemption from payment of service tax in terms of Notification dated 23.05.2007 till 30.06.2012 and, thereafter, under Notification dated 20.06.2012. These Notifications exempted services rendered to diplomatic mission or consular posts in India from payment of service tax. 3. In 2014, an investigation was initiated and audit of the records of the appellant was conducted in terms of rule 5A of the Service Tax Rules, 1994 [1994 Rules]. During the audit, it was observed that the appellant was incorrectly availing exemption on services rendered to the US Embassy. 4. The audit resulted into issuance of a show cause notice dated 16.04.2014 proposing to deny the exemption as a result of which a demand of service tax amounting to Rs. 81,11,575 was made. The allegations in the show cause notice are as follows: "12. Whereas, the party does not appear to be eligible for exemption under Notification No. 33/2007-ST dated 23.05.2007 and Notification No. 27/2012- ....
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....ing the changed address in the Registration Certificate as per the provisions of Act and if not so, whether penalty is leviable? (c) Whether the extended time period can be invoked? (d) If yes, whether the appellant is liable for payment of interest & penalty under the provisions of Act/Rules, as alleged in the show cause notice?" 8. In regard to the issue at (a), the Principal Commissioner found that the appellant had not mentioned the running serial no's and the date of undertakings on invoices issued by it. He also found that the appellant had not struck off the inapplicable portion on the face of the undertakings and on the undertakings issued by the US Embassy there was no endorsement of the name of the party. Thus, some of the mandatory conditions laid down in the Notification were not strictly followed by the appellant. 9. In regard to the issue at (b), the Principal Commissioner found that the appellant had not provided documentary proof regarding the fulfillment of the Service Tax Rules 1994 [1994 Rules ] as the appellant had not got the addresses amended and kept on doing business from the Noida address without having any valid registration certifi....
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.... appellant and the learned Authorised Representative appearing for the Department have been considered. 15. The appellant has claimed exemption from payment of service tax on services rendered to diplomatic mission or consular posts in India on the basis of the Exemption Notification dated 23.05.2007 for the period up to 30.06.2012 and for the subsequent period from 01.07.2012 on the basis of the Exemption Notification dated 20.06.2012. 16. The Notification dated 23.05.2007 is reproduced below: "In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services specified in section 65 of the said Act provided by any person, for the official use of a foreign diplomatic mission or consular post in India, from whole of the service tax leviable under section 66 of the said Act, namely:- 1. Procedure:- To claim the exemption the following procedure shall be fulfilled, namely:- (i) the foreign diplomatic mission or consular post in India, is issued with a certificate by the Protocol Division of the Ministr....
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....oreign diplomatic mission or consular post in India for personnel use of diplomatic agents or career consular officers In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services provided by any person, for the official use of a foreign diplomatic mission or consular post in India, or for personal use or for the use of the family members of diplomatic agents or career consular officers posted therein from whole of the service tax leviable under section 66B of the said Act, subject to the following conditions, namely :- (i) that the foreign diplomatic mission or consular post in India, or diplomatic agents or career consular officers posted therein, are entitled to exemption from service tax, as stipulated in the certificate issued by the Protocol Division of the Ministry of External Affairs, based on the principle of reciprocity; (ii) that in case of diplomatic agents or career consular officers posted in the foreign diplomatic mission or consular post in India, the Protocol Division of the Ministry of ....
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....of diplomatic agents or career consular officers posted in such foreign diplomatic mission or consular post in India, the unique identification number of the diplomatic agent or career consular officer, as the case may be; and (vi) that the provider of taxable service shall retain the documents referred to in the conditions (i), (ii) and (iii) alongwith a duplicate copy of the invoice issued, for the purposes of verification. 2. In case the Protocol Division of the Ministry of External Affairs, after having issued a certificate to any foreign diplomatic mission or consular post in India or as the case may be, the identification card issued to a diplomatic agent or career consular officer, decides to withdraw any one or both of them subsequently, it shall communicate the withdrawal of such certificate or identification card, as the case may be, to the foreign diplomatic mission or consular post. 3. The exemption from the whole of the service tax granted to the foreign diplomatic mission or consular post in India for official purpose or for the personal use or use of their family members shall not be available from the date of withdrawal of such certificate....
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....serially numbered and signed. US Embassy did not provide original undertakings to the appellant. The appellant furnished copies of original certificates received from the US Embassy before the Department. Copy of letter dated 10.07.2015 is enclosed of the appeal memo. The show cause notice also records submission of original undertakings in compliance with summons dated 11.01.2014. Similar observation has also given at paragraph 27 of the impugned order. 22. It would, therefore, be seen that though a submission was advanced by the appellant in regard to the allegation in the show cause notice that the US Embassy did not provide authenticated certificate to the appellant, no finding has been recorded in the impugned order. It has been pointed out by the appellant that the certificates received from the US Embassy were duly authenticated as they carried the stamp of the US Embassy. These certificates have also been enclosed in the appeal memo. It would also be seen that the impugned order recorded a finding that the format of the undertaking was not proper. The appellant had furnished copies of the original undertakings received from the US Embassy. So long as the unde....
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....eciprocity amongst the nations. It is only to ensure that there is no evasion of tax and that services have been rendered specifically to those diplomatic missions/ consular officers to whom a certificate has been issued by the Protocol Officer that the Notifications require a correlation to be established between the invoices and the undertakings. Once these two documents can be correlated, though not in a manner provided for, the substantive conditions to the Exemption Notifications stand fulfilled and the exemption cannot be denied. 28. In this connection reliance can be made to the decision of the Supreme Court in Lakshmiratan Engineering Works Ltd. vs. Assistant Commissioner (Judicial) l Sales Tax, Kanpur Range, Kanpur and Another [1967 (9) TMI 116-Supreme Court ]. The proviso to section 9 of the UP Sales Tax Act provided that no appeal against an assessment shall be entertained unless accompanied by satisfactory proof of payment of the amount of tax admitted by the appellant to be due. The corresponding rule 66(2) of the UP Sales Tax Rules provided that the memorandum of appeal shall be accompanied by a challan showing deposit in the treasury of the admitted tax. It ....
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....ered dealer to prove otherwise. 31. In the present case, as noticed above, the appellant was able to correlate the invoices with the undertakings. It can, therefore, be concluded that the appellant satisfied the substantial conditions set out in the Exemption Notifications. 32. It needs to be noted that even for the subsequent period, the appellant continued to provide such services to the US Embassy and the exemption has been allowed. 33. Learned counsel for the appellant also contented that the extended period of limitation could not have been invoked in the facts and circumstances of the present case as there is no mala fide on the part of the appellant. The learned counsel for the appellant submitted that the appellant was the only service provider to the US Embassy for air travel services and the services rendered by it were supported by certificate and undertakings. Learned counsel also submitted that details about availing the benefit under the Exemption Notification was duly declared in the ST-3 returns and this fact has been admitted by the Department at paragraph 16 of the show cause notice. The submission, therefore, is that since the ST-3 retu....
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.... Commissioner of Central Excise, Chandigarh-I [2007 (216) E.L.T. 177 (SC) ] held: "10. The expression 'suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or "collusion" and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct." 39. The Delhi High Court in Bharat Hotels Limited vs.Commissioner of Central Excise (Adjudication) [2018 (12) GSTL 368 (Del.) ] also examined at length the issue relating to the extended period of limitati....