TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 860
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....ervice. 3. A show cause notice dated 24.10.2009 was, therefore, issued to the appellant demanding service tax by invoking the extended period of limitation as contemplated under section 73(1) of the Finance Act. All that was stated in connection with the invocation of the extended period of limitation in the show cause notice is: "Accordingly, it appears that the party has suppressed the value of taxable service to the tune of Rs. 12,84,20,581/- shown in Sl. No. 10 of the table. (RUD-2-schedule 13 of the Profit and Loss Account for the year 2004-05 to 2007-08) as they have reflected the assessable value/taxable value of the services far less then what is shown in their balance sheet. " 4. The Commissioner in the order dated 03.08.2017 held that the extended period of limitation was rightly invoked and the observations are as follows:- "I find from the above discussion & findings that the party has evaded payment of Service Tax to the tune of Rs. 85,16,371- (including Ed. Cess and S.H. Ed. Cess) by suppressing correct value of taxable service. In view of this, it is clear that if audit of the records of the party was not undertaken by the Department, the said evasion of Servic....
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....hort-levied or short-paid or erroneously refunded by reason of- (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "one year", the words "five years" had been substituted." 10. It would, therefore, be seen that where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice. 11. The relevant date has been defined in section 73 (6) of the Act as follows; "73(6) For the purpose of this section, "relevant date" means,- (i) In the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short paid- (a) where under the rules made under this Chapter, a periodical return, showing p....
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....son requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under Section 11AA and a penalty equivalent to the duty specified in the notice." 15. In Pushpam Pharmaceuticals Co. the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11 A of the Excise Act. The proviso to section 11A of the Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of it was suppression of facts. It is in this context that Supreme Court observed that since 'suppression of fact' had been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. The observations are as follows; "4. Section 11A empowers the Department to re-open proceedings if the levy h....
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....o both the parties, the omission by one to do what he might have done not that he must have done would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act." 17. These two decisions in Pushpam Pharmaceuticals and Anand Nishikawa Company Ltd. were followed by the Supreme Court in the subsequent decision in Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur [2013 (288) ELT 161 (SC)] and the observation are: "18. We are in complete agreement with the principal enunciated in the above decisions, in light of the proviso to section 11A of the Central Excise Act, 1944." 18. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) ....
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....pression' is shown to be wilful with intent to evade the payment of service tax. 21. In the present case, as noticed above, the show cause notice merely mentions that the appellant suppressed the value of taxable service. The show cause notice does not mention that suppression was with an intention to evade payment of service tax. The submission of learned authorized representative appearing for the Department that the show cause notice also mentions that suppression was with an intent to evade payment of service tax cannot be accepted because the said allegation is in regard to levy of penalty under sections 76 and 78 of the Finance Act and not section 73(1) of the Finance Act. This is clear from the portion of the show cause notice relied upon by the learned authorized representative which is reproduced below:- " The party have also failed to pay service tax in terms of section 68 of the Act readwith Rule 6 of the Rules with intent to evade payment of service tax, therefore, it appears that they are liable to pay penalty under section 76 and 78 of the Act. " 22. The Commissioner, however, as noticed above, observed that the appellant had evaded payment of service tax by suppr....