TaxTMI 
TaxTMI 
2023 (9) TMI 930
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....from 01.07.2010, added an Explanation to section 65(105)(zzzh) and provided that construction of a complex intended for sale by a builder shall be deemed to be a service provided by the builder to the buyer. Thus, such services rendered by builders to prospective buyers were also subjected to levy of service tax. 3. It is in this context that the Government issued a Notification No. 36/2010-ST dated 28.6.2010 [the Notification], corrected by Corrigendum dated 29.6.2010, providing exemption from payment of service tax on the advances received before 01.07.2010 towards the services taxable under section 65(105)(zzq) and section 65(105)(zzzh) of the Finance Act, i.e., commercial or industrial construction services, and construction of complex services. 4. The appellant claims that it received an amount of Rs. 2,71,61,037/- as advances towards construction of residential complex through various cheques from the buyers of dates prior to 01.07.2010 and these cheques had also been received prior to 01.07.2010. The appellant further asserts that it issued receipts cum invoices detailing the name, property details, cheque details towards all these payments prior to 01.07.2010. Accordi....
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....10/30.06.2010 and confirmed the service tax demand with interest and imposed penalty amounting to Rs. 6,99,373/- under section 78 of the Finance Act. The order also justified the invocation of the extended period of limitation. 10. The appellant filed an appeal before the Commissioner (Appeals) against the order dated 13.10.2014 submitting that the exemption was correctly claimed under the Notification and in any case, the extended period of limitation could not have been invoked in the facts and circumstances of the case. 11. The Commissioner (Appeals), by the impugned order dated 13.03.2018, upheld the order dated 13.10.2014 passed by the Additional Commissioner on merits as well as on limitation. 12. This appeal has been filed to assail the order passed by the Commissioner (Appeals). 13. Ms. Sukriti Dass and Ms. Masuma Rizvi, learned counsel appearing for the appellant made the following submissions: (i) The date of receipt of cheque is the relevant date for availing benefit under the Notification. Hence, the appellant is entitled to the benefit of exemption as it received the cheques prior to the cut-off date 01.07.2010. In support of this contention learne....
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....ce Tax Appeal No. 51787 of 2022 dated 21.08.2023]. 14. Shri P.K. Sinha, learned authorised representative appearing for the department, however, supported the impugned order and submitted that it does not call for any interference in this appeal. Learned authorised representative submitted that the appellant was clearly not eligible to the benefit of the Notification as all the cheques were deposited in the bank after the cut of date i.e, 01.07.2010 and the cheques were realized/credited to the government account after 01.07.2010. Thus, the service tax was liable to be levied on the appellant. Learned authorised representative also submitted that the extended period of limitation was correctly invoked in the facts and circumstances of the case. 15. The submissions made by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 16. The issues that arise for consideration in this appeal are as to whether the appellant was entitled to claim exemption from payment of service tax under the Notification made effective from 01.07.2010 in respect of advance payment received through cheques issued on or befo....
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....epartment Therefore, it appeared that the assessee had suppressed this fact from the department with intent to evade payment of service tax and as such the proviso to Section 73(1) of the Finance Act, 1994 for extended period appeared to be invokable in the instant case. xxxxxxxxx" (emphasis supplied) 19. The relevant portion of the order passed by the Additional Commissioner denying the benefit of the Notification is reproduced below: "23. A perusal of the above notification read with the corrigendum makes it clear that the said notification, inter alia exempt service on construction of residential complex service to the extent of Service tax calculated on consideration received before 01.07.2010. In the facts of the present case, the Noticee received payment towards construction of residential complex service vide cheques dated 30.06.2010. The SCN has proposed to deny exemption on the basis of the reasoning that in case of cheques the date of honouring of cheques is relevant date for receipt of payment. In this regard, the SCN has placed reliance on CBEC letter F. No. 137/10 2000-CX.4 dated 16.07.2001, wherein it was clarified that, "AS PER RBI INSTRUCTION....
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....sit reveals that though receipt date of all the cheques is 30.06.10, yet the deposit-dates in bank are different and the same have been deposited in 15 spans, which have been credited at later dates. For instance, 8 cheques have been deposited on 03.7.2010 for the first time and the last cheque has been deposited on 18.9.2010. It is not comprehendible that cheques of so high denomination kept for months together without depositing in the bank and losing interest thereon. Thus, from the pattern, it infers that receipt of cheque on 30.6.2010 is a clear after- thought and the appellant has taken the cheques of 30.6.2010 in later dates, with an intention to avoid service tax." (emphasis supplied) 22. Regarding the invocation of the extended period of limitation, the Commissioner (Appeals) observed as follows: "13. Regarding imposition of the extended period of limitation, the appellant has misinterpreted the version. The extended period of limitation has not been imposed on the ground that the Applicant did not approach the department seeking clarification. The inference is that the facility of approaching the department was always available to the appellant for any clar....
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....n deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded. It is as follows; "73.(1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: PROVIDED that where any service tax has not been levied or paid or has been short-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", th....
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.... before us on behalf of the appellant that the cheque for Rs.6,02,000 was tendered in Court on 29 May, 1980 and that it was duly honoured by the Bank and money was realised under the cheque, and therefore it must be taken that payment had been effected by the appellant on 29 May, 1980 within the time stipulated by this Court in its order dated 29 November, 1979. In Commissioner of Income Tax, Bombay South, Bombay v. Messrs Ogale Glass Works Ltd. Ogale Wadi, A.I.R. 1954 S.C. 429 it was laid down by this Court that payment by cheque realised subsequently on the cheque being honoured and encashed relates back to the date of the receipt of the cheque, and in law the date of payment is the date of delivery of the cheque. Payment by cheque is an ordinary incident of present-day life, whether commercial or private, and unless it is specifically mentioned that payment must be in cash there is no reason why payment by cheque should not be taken to be due payment if the cheque is subsequently encashed in the ordinary course." (emphasis supplied) 32. In view of the aforesaid decision of the Supreme Court, the appellant may have been under a bonafide belief that even though the cheque ma....
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....e this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since "suppression of facts‟ has 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 has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of court the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is....
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....Act." (emphasis supplied) 37. 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) E.L.T. 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." 38. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) E.L.T. 177 (SC)] also 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....
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.... an intent to evade payment of service tax. However, the impugned show cause notice does not contain any allegation of fraud, collusion, or wilful misstatement on the part of MTNL. The impugned show cause notice alleges that the extended period of limitation is applicable as MTNL had suppressed the material facts and had contravened the provisions of the Act with an intent to evade service tax. Thus, the main question to be addressed is whether the allegation that MTNL had suppressed material facts for evading its tax liability, is sustainable. xxxxxxxxx 41. In the facts of this case, the impugned show cause notice does not disclose any material that could suggest that MTNL had knowingly and with a deliberate intent to evade the service tax, which it was aware would be leviable, suppressed the fact of receipt of consideration for rendering any taxable service. On the contrary, the statements of the officials of MTNL, relied upon by the respondents, clearly indicate that they were under the belief that the receipt of compensation/financial support from the Government of India was not taxable. Absent any intention to evade tax, which may be evident from any material....
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....cation proceedings and is before us that it is entitled to the CENVAT credit. Thus, we find that it is a case of difference of opinion between the appellant and the Revenue. The appellant held a different view about the eligibility of CENVAT credit than the Revenue. Naturally, the appellant self-assessed duty and paid service tax as per its view. Such a self-assessment, cannot, by any stretch of imagination, be termed deliberate and wilful suppression of facts. 16. Another ground for invoking extended period of limitation given in the impugned order is that the appellant was operating under self-assessment and hence had an obligation to assess service tax correctly and take only eligible CENVAT credit and if it does not do so, it amounts to suppression of facts with an intent to evade and violation of Act or Rules with an intent to evade. We do not find any force in this argument because every assessee operates under self-assessment and is required to self-assess and pay service tax and file returns. If some tax escapes assessment, section 73 provides for a SCN to be issued within the normal period of limitation. This provision will be rendered otiose if alleged incorrect ....