TaxTMI 
TaxTMI 
2024 (11) TMI 408
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..... Commissioner of Service Tax, New Delhi. 4. The principal controversy involved in the present appeal concerns the question whether the Revenue is justified in invoking the provision of Section 73 (1) of the Finance Act, 1994 for seeking assessment of the service tax liability in respect of the tax period from the year 2007-2010. 5. The respondent (hereafter assessee) was registered with the Service Tax Commissionerate, Delhi as an Input Service Distributor under Section 65 (105) (zzzb) of the Act. The audit of the assessee (then known as M/s. National Aviation Company of India Limited and now known as Air India) was conducted by the Central Excise Revenue Audit (CERA) for the period 2007-08 and 2009-10. During the course of the audit, it was observed that the assesee had availed CENVAT credit of Rs. 10,50,31,271/- and a cess of Rs. 25,46,174/- and utilised the same for the period 2007-2009. However, it was found that the supporting documents for availing the CENVAT Credit were not available with the assessee. On the aforesaid basis, it is alleged that the assessee had wrongly availed CENVAT credit. 6. In the aforesaid circumstances, the concerned Custom Authority issued the Sho....
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.... applicable at the material time is relevant and the same is set out below:- "73. Recovery of service tax not levied or paid or short levied or short-paid or erroneously refunded. (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 provision of this Chapter or of the rules made thereunder with intent to evade payment of service tax." 10. In terms of Section 73 (1) of the Act, a notice could be issued to a person chargeable with service tax if he was not levied or had not paid, or was shor....
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....usion or wilful mis-statement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Rules made thereunder with Intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been noticed or that the assessee was guilty of wilful mis-statement or suppression of fact. In the absence of such averments in the show cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11A (1) of the Act. The Additional Collector while conceding that the notice had been issued after the period of six months prescribed in Section 11A (1) of the Act had proceeded to observe that there was wilful action of withholding of vital information apparently for evasion of excise duty due on this waste/by-product but counsel for the assessee contended that in the absence of any such allegation in the show cause notice the assessee was not put to notice regarding the specific allegation under the proviso to that sub-sect....
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....foresaid proposition. However, the Revenue submits that the said allegations are necessarily be read into the SCN as there was a specific allegation that the assessee had not complied with the provisions of maintaining the record, which according to the Revenue is mandatory to claim the CENVAT credit. 17. It is material to note that there is no allegation against the assessee of any statutory contravention with an intent to evade tax. The case of the Revenue is solely premised on the basis that there was suppression of facts on the part of the assessee. Clearly, not producing the documents, which may be necessary for substantiating a claim, does not fall in the exception of "suppression of facts". In any view of the matter, no express allegations were made in the SCN to the said effect. 18. We consider it relevant to also refer to the decision of the Supreme Court in Pushpam Pharmaceutical Co. v. CCE 1995 Supp (3) SCC 462 which was rendered in the context of Section 11A of the Central Excise Act, 1944. The said provision is pari materia to the proviso to Section 73 (1) of the Act as was in force at the material time. The Supreme Court in its decision observed as under: "4. Sect....
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....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 to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act." [Emphasis supplied] 20. In Uniworth Textiles Ltd. v. CCE (2013) 9 SCC 753, the Supreme Court considered the import of proviso to Section 28 of the customs Act, 1962 which also provided for extension of time period for issuing a notice where there was wilful misstatement or suppression of facts by the importer or the exporter or the agent of employee of the importer or exporter. The said proviso reads as under: "Provided that where any duty has not been levied or has been short-levied or the interest has not ....