TaxTMI 
TaxTMI 
2022 (4) TMI 302
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....anizations, government hospitals, educational institutes. On 04.04.2014, the Range Superintendent, Lucknow ask the applicant to submit the information including balance sheet for the period 2009-2010 to 2013-2014. The appellant submitted records except the balance sheet for the period 2013- 2014 as it was not readily available at that time. Thereafter, on 15.09.2014, the appellant appeared before the Superintendent and submitted all relevant information including the balance sheet for the period 2013-2014. On 30.09.2014, a show cause notice was issued to the appellant to demand service tax for the period April 2009 to March 2013 by invoking extended period of limitation. On 29.01.2016, the show cause notice was adjudicated and confirming the demand of service tax alongwith interest and penalties were also imposed on both the appellants. Thereafter, on 01.02.2016 in response to an enquiry for the recurring period, the appellant submitted the balance sheet for the period 2013-2014 and 2014-2015 and other relevant documents. On 06.05.2016, the appellant filed an appeal against the order dated 29.01.2016 before this Tribunal. On 11.09.2017 the audit through a letter asked the appellant....
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....ner of Central Excise & Service Tax, Lucknow vide Service Tax appeal No. 70075 of 2020 in Final order No. 70003-70005 of 2021 dated 15.02.2021, wherein this Tribunal held that extended period of limitation is not invokable in such a situation. He further submitted that in the proceedings it is also alleged that the appellant has collected the service tax and not paid. He submitted that the demand has been proposed to recoverable under the proviso to Section 73(1) of the Finance Act, 1994 whereas if any amount has been collected by the appellant and not paid to the exchequer, then the same can be demanded in terms of Section 73A of the Finance Act, 1994. For this contention, he took the support of the order this Tribunal in the case of M/s Fusion India INC versus Commissioner of Central Excise, Service Tax, Lucknow in appeal No. ST/51697 of 2015 wherein vide Final order No. 72390 of 2018 dated 20.09.2018, this Tribunal held that the service tax was payable by the appellant even the penalties cannot be imposed by invoking the provisions under Section 73(1)of the Finance Act, 1994 and the said provisions cannot be invoked in this case, therefore, the impugned order is to be set aside.....
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..../Hospital & Para Medix Services) and (ii) Taxable (Income from Facility Services/Manpower Services) and the year-wise taxable and Non-taxable amount shown is as shown below :- (Amount in Rs.) Financial Year Non-taxable (Income from Sanitation Services/ Hospital & Para Medix Services) Taxable (Income from Facility Services/ Manpower Services) Total revenue from operation as shown in (Balance Sheet) Total amount shown in form 26 AS 2013-14 2,96,37,485 61,24,363 3,57,61,848 3,44,37,053 2014-15 2,66,81,551 1,55,50,872 4,22,32,423 4,34,12,497 2015-16 5,81,42,120 2,93,53,989 8,76,96,109 8,63,13,640 2016-17 8,47,78,647 4,10,99,805 12,58,78,452 12,23,96,139 Total 19,92,39,803 9,23,29,029 29,15,68,832 3.3 And whereas, the Party has filed the statutory half yearly ST-3 returns for the period from April-2013 to March-2017 and has shown their gross assessable/taxable value and Service Tax liability as paid by them, as shown below :- (Amount in Rs.) Period of Return Due date of Filing of Returns Actual date of Fi....
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....pients as given below :- Sl. No. Financial Year Assessable Value (in Rs.) Service Tax at applicable rate (in Rs.) 1 2013-14 3,57,61,848 44,20,164 2 2014-15 4,22,32,423 52,19,927 3 2015-16 8,76,96,109 1,23,05,087 4 2016-17 12,58,78,452 1,88,05,767 Grand Total 29,15,68,832 4,07,50,945 As above calculated service tax liability amounting to Rs. 4,07,50,945/- for the period from F.Y. 2013-14 to 2016-17 include the service tax charged and collected amounting to Rs. 3,11,99,008/- as detailed in para 3.5 during the said period. The party had paid service tax amounting to Rs. 1,22,78,106/- as shown in their ST-3 returns against the service tax liability of Rs. 4,07,50,945/-. Accordingly, it appears that by suppressing the correct assessable value, they had evaded service tax (including all Cess) amounting to Rs. 2,84,72,839/- (Rs. Two Crores Eighty Four Lakhs Seventy Two Thousand Eight Hundred Thirty Nine Only) during the period F.Y. 2013-14 to 2016-17 and thereby, violated the provisions of Section 67 & 68 of the Finance Act, 1994 (here-in- refer referred to as "the Act') readwith Rule 6 of Service Tax Rul....
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...., RDSO were the recipient of these two services, so, they were not paying Service Tax on these services being exempted from payment of service tax. Whereas, on being asked to explain the exact nature of Para Medical Services, Shri Tiwari stated Para Medical Services in their case is nothing but supply of Man Power in respect of Patient Care Service and they supply/provide patient helpers to these two medical institutions. Whereas, from the statement of Shri Tiwari and Balance Sheets of the party, it appears that neither did they got registered with the department immediately after commencing the work, nor paid any Service Tax till 13.05.2011. It also appears that they also did not pay Service Tax on the Para Medical Service on the pretext being exempted, which is nothing but 'Man Power Supply' a fact also admitted by Shri Tiwari in his statement, besides the services of disposal of biomedical waste which became exempted after introduction of Service Tax Notification No. 12/2012-ST dated 17.03.2012. Therefore, it appears that the party also deliberately did not pay service tax on these two services. And whereas, on scrutiny of Balance Sheets of M/s S....
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....mposed equal penalty. Aggrieved by the said order appellant is before this Tribunal". On the above set of facts, this Tribunal held as under :- "5. Having considered the submission from both the sides and on perusal of record including the perusal of the show cause notice referred to above we find that it is stated in the said show cause notice that the appellant were paying service tax in respect of Manpower and Recruitment and Supply Agency Service whereas it was also stated in the said show cause notice that the service rendered by appellant as Para Medical Services were nothing but Manpower supply Services and appellant did not pay service tax. We, therefore, find that there is contradiction in the said show cause notice. We further note that the said show cause notice has simply added together the receipts by the appellant from various heads in the balance sheet and demanded service tax on the entire receipts. We find that various agreements that must have been entered into by the appellant with the service recipient were not examined by Revenue. Further the invoices raised by the appellant were not examined by Revenue. It was essential to scrutinize the agre....
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....ated above, Civil Appeal Nos. 2747 of 2001 and Civil Appeal No. 6261 of 2003 filed by the assessees are accepted and the impugned orders are set aside on the question of limitation only. The demands raised against them as well as the penalty, if any, are dropped. Civil Appeals @ Special Leave Petition (C) Nos. 9271-9278 of 2003 filed by the department are dismissed. Questions of classification and marketability are left open. Parties shall bear their own costs". We hold that the demand of service tax is barred by limitation as the service rendered by the appellant were well known to the Department in earlier proceedings, therefore, the subsequent show cause notice cannot be issued by invoking extended period of limitation. The same view was taken by this Tribunal in the case of A.N. Kapoor (Janitors) Pvt. Ltd., wherein this Tribunal observed as under :- "16. It is not in dispute that the Appellant had taken service tax registration under "cleaning activity' services on November 09, 2006 and that ever since then it has engaged itself in rendering such services. According to the Appellant, it provided both taxable and non-taxable services. The non-taxable services are tho....
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....of the activities of the Appellant from August 13, 2007, the demand raised in the third show cause notice dated November 13, 2019 also deserves to be set aside on the ground of limitation. 19. In this connection, it would be pertinent to refer to the decision of the Supreme Court in Nizam Sugar Factory vs Collector of Central Excise, A.P. [2008 (9) STR 314 (SC)]. The Department had issued a show cause notice dated February 28, 1984 demanding duty for the period February 1978 to September 1982. A second show cause notice dated July 16, 1987 was again issued for the period 1982-83 to 1986-87. A plea was taken by the Appellant, in response to the second show cause notice, that the allegations made in the second show cause notice were practically a repetition of the allegations made in the first show cause notice and so the invocation of the extended period of limitation was not justified. A third show cause notice dated September 12, 1988 for the period March 16, 1988 to June 27, 1988 was also issued on the same allegations. The Appellant again filed a reply on the same lines as was filed to the second show cause notice. The adjudicating authority, however, did not acce....
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.... it has all along been contending that they were not related persons, so, it cannot be said to be guilty of not filling up the declaration in the prescribed proforma indicating related persons. The necessary facts had been brought to the notice of the authorities at different intervals from 1985 to 1988 and further, they had dropped the proceedings accepting that M/s. Pharmachem Distributors was not a related person. It is, therefore, futile to contend that there has been suppression of fact in regard M/s. Pharmachem Distributors being a related person. On that score, we are unable to uphold the invoking of the proviso to Section 11A of the Act for making the demand for the extended period." This judgment was followed by this Court in the case of ECE Industries Limited v. Commissioner of Central Excise, New Delhi reported in (2004) 13 SCC 719 = 2004 (164) E.L.T. 236 (S.C.). In para 4, it was observed : "4. In the case of M/s. P&B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in [2003 (2) SCALE 390], the question was whether the extended period of limitation could be invoked where the Department has earlier issued show cause notices in resp....
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....llant. As noted above, the Appellant in reply to the show cause notice had made a specific reference to the two show cause notices by giving the number and the dates and the order passed by the Tribunal. Even if it is assumed that the Appellant had not placed the two show cause notices and the order passed by the Tribunal, nothing prevented the Additional Director General from perusing the records of the Department for examining the two show cause notices and the order passed by the Tribunal. The Additional Director General could have even asked the Appellant to produce the two show cause notices and the order passed by the Tribunal. The important documents referred to by the Appellant that went to the root of the matter could not have been ignored in this manner. 22. The Additional Director General has also noted in the impugned order that no document was made available by the Appellant to the investigating Officers either at the time of audit or during investigations by the Officers of the Directorate and so it was a case of suppression of information by the Appellant. This is only a bald statement as nothing has been mentioned as to what particular doc....
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.... Manual contains detailed guidelines for conducting an audit. The Additional Director General, therefore, could not have brushed aside the audit report merely on conjectures and surmises that the relevant documents may not have been placed by the Appellant or the relevant documents were not examined by the audit team. 27. The judgment of the Karnataka High Court in Commissioner of Central Excise, Bangalore-I vs MTR Foods Limited [2012 (282) ELT 196 (Kar.)] deals with this issue of limitation in a matter when an audit report has been submitted and the observations are : "4. As is clear from the material on record, the returns were filed promptly. In the returns it is clearly mentioned that they availed credit under the aforesaid rules. The audit partly accepted the same. It is only in the second audit that they noticed the mistake and initiated proceedings. Therefore, in the light of the aforesaid facts none of the other conditions prescribed in the Proviso exists in this case to extend the period of limitation of 5 years. It is in this background the Tribunal was justified in setting aside the order passed by the appellate authority and in restor....
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.... fact is conclusive insofar as the knowledge of the petitioners' activities to the respondents is concerned. Therefore, in our view, in the light of the audit carried out by the respondents off the petitioners' factory and the correspondence that is addressed by the petitioners to the respondents, it cannot be said that the petitioners have mis-stated the facts or there is a fraud practiced by the petitioners." 29. The Additional Director General has also observed that the Appellant had collected the service tax from most of the service recipients, but had mentioned in the ST-3 return that they were exempted services. This finding is also not based on the basis of records as nothing has been brought on the record to indicate that the Appellant had actually collected service tax for the exempted services. Merely because the Appellant collected an amount inclusive of taxes does not mean that service tax was included because there are many other taxes that are required to be paid. 30. Thus, for all the reasons stated above, it is not possible to sustain the demand of service tax raised against the Appellant as the extended period of limitation contemplate....
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....2301937 FAX: 0522-4060391 Mobile No. +91-9415088588, +91-9936078699 129 S.Tax Reg No.: PAN: Bill No.: To AAICS1770QSD001 Email: [email protected] AAICS1770Q GN/MU 4 2014-15 Order No.:- Website: www.sunfacilityservices.com Date 02.03.2015 GN/MU/H.K./C.A. NO.-02 The Project Director, Medical University Greater Noida Gautam Buddh Nagar, (U.P.) Particulars Amount(Rs.) Being the Amount of Service Charges for: Providing Sanitation Services at your Prestigious Institute for the Month Of February, 2015 353,356.89 Total Service Charge @7% 353,356.89 24734.98 Grand Total 378,091.87 (Rupees Three Lacs Seventy Eight Thousand Ninety One Paise Eighty Seven only) For Sun Facility Services (P) Ltd. Bank Name: Vijaya Bank Current A/c No.- 714000301000641 Branch:- Greater Noida, Uttar Pradesh IFSC Code:- VIJB0007140 MICR Code:- 110029042 Note: In the event of any query concerning this Invoice please contact the above local office quoting the Invoice number. Payment Terms: 1. Interest @ 24% p.a. is charged if the bill is not paid before the due date as per contract. Ser....