TaxTMI 
TaxTMI 
2024 (4) TMI 228
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....ct, 1994 as amended. 3. I also impose penalty of 7,80,44,124/- (Rupees Seven Crore eighty Lakhs forty four thousand one hundred twenty under Section 78 of the Finance Act 1994. four only) 4. I hereby impose a penalty of Rs. 10,000/- (Rupees ten thousand) under Section 77 of Finance Act, 1994. 2.1 The appellant is registered for providing various taxable services namely Management Consultants, Consulting Engineer, Manpower Recruitment Agency, Online Information and Data Retrieval services, Commercial Training & Coaching, Maintenance and Repair services, Erection Commissioning & Installation, Business Auxiliary Services, Sponsorship services, Business Support Services, Information Technology Software Services falling under Section 65 of the Finance Act, 1994. 2.2 During the course of audit of record of the appellant for the period March, 2009 to March 2010 it was observed that that the party have not paid service tax of Rs. 2,06,99,389/- on an amount in the foreign exchange equivalent to INR 17,84,35,798, pertaining to communication expenses paid to their related parties based in different foreign countries. Further, it was gathered that the payments relate to....
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....Telecommunication Services". Being Telecommunication Services, the services received are not taxable. In absence of consideration paid to AT&T and Global Crossing by the Appellant, no service tax is leviable. The extended period of limitation is not invocable as there was no suppression of facts. Hence, the demand is wholly without jurisdiction and ought to be dropped. No penalty is imposable as the extended period of limitation is not invocable. No penalty is imposable, the benefit of Section 80 of the Finance Act may be available to the Appellant. 3.3 Arguing for the Revenue learned Departmental Representative reiterates the finding recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in the appeal and during the course of argument. 4.2 On merits the issue is whether the services provided by the appellant shall be classified under the category of "internet telecommunication services" as per Section 65 (57a) of the Finance Act, 1994 for the purpose of levy of service tax. The said definition is reproduced below: "65 (57a) "internet telecommunication service" includes....
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....charging for the exclusive use of circuits, a leased circuit or a dedicated link including a speech circuit, data circuit or a telegraph circuit; (v) provision of call management services for a fee including call waiting, call forwarding, caller identification, three-way calling, call display, call return, call screen, call blocking, automatic call-back, call answer, voice mail, voice menus and video conferencing; (vi) private network services including provision of wired or wireless telecommunication link between specified points for the exclusive use of the client; (vii) data transmission services including provision of access to wired or wireless facilities and services specifically designed for efficient transmission of data; and (viii) communication through facsimile, pager, telegraph and telex, but does not include service provided by- (a) any person in relation to on-line information and database access or retrieval or both referred to in sub-clause (zh) of clause (105); (b) a broadcasting agency or organisation in relation to broadcasting referred to in sub clause (zk) of clause (105); and (c) any perso....
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....willfully avoiding the submission of the requisite documents to the department and have been suppressing the facts of receiving service from a service provider located outside India, by not disclosing the same in statutory returns, with intend to evade payment of service tax, thus extended period under proviso to Section 73(1) of the Finance Act, 1994 appears to be applicable to this case. Further, since the party did not submit requisite information called by the department, they appear to be liable for penal action as provided under section 77 of the Finance Act, 1994. And as the party did not discharged their service tax liabilities and have thereby evaded service tax in contravention of the statutory provisions, they have and have rendered themselves liable for penal action under Section 76 and 78 of the Finance Act. 1994." 4.7 The issue has been discussed in the impugned order in Para 4.11 & 4.12 and the same is reproduced below for ready reference:- "4.11 The assessee has contended that even if the amount of such services are assumed to be taxable in the hands of the assessee under reverse charge mechanism and the service tax is deposited under reverse charge mech....
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....from the fact that the assessee has not provided willfully, all required information, till issue of several correspondence and two summons, with intend to evade service tax. Therefore, I found that the assessee have willfully suppressed the facts with intent to evade payment of service tax and therefore extended period under proviso to Section 73 (1) of Finance Act was correctly been invoked to recovery of service tax with interest under Section 75 of the Act ibid.. I would like to discuss the judgement of the Hon'ble High Court Calcutta in the case of Naresh Kumar & Co. Pvt. Ltd. Vs. Union of India reported in 2014 (36) S.T.R. 271 (Cal.) which is relevant in the instant case, wherein it is held that, "28. the extended period of limitation can be invoked when there is a conscious act to evade tax, for example deliberate non-disclosure of some bills pertaining to any particular taxable service rendered by the assessee. Similarly, if an assessee withholds information in spite of requisition to provide the same, with intention to evade tax, the assessee would be guilty of willful suppression." In this regard, the assessee also relied upon various decisions of cou....
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....at the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression." ➢ Anand Nishkawa [2005 (188) E.L.T. 149 (S.C.)] "27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that "suppression of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty, when facts were known to 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 ....
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....n cases where classification lists filed by the Assessee were duly approved, the extended period of limitation would not be available to the Department." ➢ EMAAR MGF Land Ltd. [2023 (74) G.S.T.L. 212 (Del.)] "19. It is apparent from the above that the proviso to Section 73(1) of the Act is applicable only where it is found that the service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud; collusion; wilful mis-statement; or suppression of facts; or contravention of the provisions of the Act and the Rules made thereunder with the intention to evade payment of service tax. In the present case, there is no allegation of any fraud or collusion. It is also apparent from the order-in-original that the Commissioner had proceeded on the basis that the proviso would be applicable notwithstanding that there was no intent on the part of the respondent to evade any tax. The Commissioner had proceeded on the basis that the extended period of limitation was applicable on account of suppression of facts and "wilful misstatements". 20. In the circumstances, the Tribunal had examined the question whet....
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....ere was no requirement for MTNL to do so. 32. As noted above, the impugned show cause notice discloses that the respondents had faulted MTNL for not approaching the service tax authorities for clarification. The respondents have surmised that this would have been the normal course for any person acting with common prudence. However, it is apparent from the statements of various employees of MTNL that MTNL did not believe that the amount of compensation was chargeable to service tax and therefore, there was no requirement for seeking clarifications. Further, there is no provision in the Act which contemplates any procedure for seeking clarification from jurisdictional service tax authority. Clearly, the reasoning that MTNL ought to have approached the service tax authority for clarification, is fallacious. 33. It is also important to note that MTNL had declared the receipt of compensation as income in its books of account. The final accounts of MTNL are in public domain. In the circumstances, the allegation that MTNL had suppressed any material facts from the Service Tax Department is wholly without any basis. 34. Mr. Harpreet Singh, Learned Counsel appear....