TaxTMI 
TaxTMI 
2024 (12) TMI 841
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....inance Act, 1994 for discharging their service tax liability. Following the audit of the records of the appellant, the department issued a show cause notice dated 20.01.2016 stating that as the appellant had remitted a sum of Rs. 37,69,247/- for import of various taxable services during the period from 01.04.2011 to 31.03.2014, the appellant was liable to deposit service tax of Rs. 4,49,046/- by reverse charge mechanism on such payment as per Section 66A of the Finance Act, 1994. The said notice proposed penalty and interest while invoking the extended period. Vide Order-in-Original No. 51/2016-ST Dt. 24.01.2017, the demand of service tax of Rs. 4,49,046/- with interest under Section 75 of the Finance Act, 1994 was confirmed and penalty of Rs. 4,49,046/- was imposed under Section 78. Aggrieved by the said order, the appellant filed an appeal before the Commissioner (Appeals) who in-turn, rejected their appeal. Hence, the appellant has filed the present appeal. 3. Learned Counsel for the appellant submitted that on merits the exhibition and advertisement services, services of research and development and consultancy were also provided out of India and also consumed out of India, t....
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....)] in which it was held by SC that when appellant is eligible to Modvat credit, the situation becomes revenue-neutral. In view of above, learned counsel has prayed that the appeal of the appellant may be allowed. 4. Learned Authorized Representative for the Department while reiterated the findings in the impugned order, submitted that he appellant had never informed the department about the remittance made in convertible foreign currencies to their service provider for import/obtaining the service of taxable services. The appellant had failed to declare the receipt of the above taxable services to the jurisdiction officer and suppressed the correct nature of taxable service received by them with a blatant intention to evade payment of service tax on the value of taxable services. The appellant as services recipient has wilfully, deliberately suppressed the correct nature and value of taxable service received by them form the company/ service providers based outside India and failed to determine and pay the service tax with an intention to evade payment of service tax in contravention of the various provisions of the finance Act.1994 and rules. Therefore, the extended period invoke....
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.... inform the department regarding the remittances made in convertible foreign currencies to their service provider, and had suppressed the correct nature of the taxable service provided by them with an intent to evade payment of service tax. Such a finding recorded that suppression of facts is enough to invoke the extended period of limitation under the proviso to section 73 (1) of the Finance Act and there is no necessity of any intent to evade payment of service tax, is against the well settled principles. Even if one assumes that there was suppression, it has to be examined whether suppression was wilful and with an intent to evade payment of service tax. We note that the Hon'ble Supreme Court has held that suppression of facts has to be "wilful‟ and there should also be an intent to evade payment of service tax. In this context, we are of the opinion that it would be useful to reproduce the proviso to section 11A of Central Excise Act, 1944, as it stood when the Supreme Court explained "suppression of facts" in Pushpam Pharmaceutical Co. vs. Commissioner of Central Excise, Bombay [1995 (78) E.L.T. 401 (SC)], which is as follows: "11A: Where any duty of excise has not be....
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....t. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that 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." (emphasis supplied) 9. The above decision was referred by the Hon'ble Supreme Court in Anand Nishikawa Company Ltd. vs. Commissioner of Central Excise [2005 (188) E.L.T. 149 (SC)] which observed as follows: "26 ..........This Court in the case of Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay, while dealing with the meaning of the expression "suppression of facts" in proviso to Section 11A of the Act held that the term must be construed strictly. It does not mean any omission and the act must be deliberate and wilful to evade payment of duty. The Court, further, held:- "In taxation, it ("suppression of facts") can have only one meaning that the correct information was....
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....statement with the knowledge that the statement was not correct." 12. We also take note that the Delhi High Court in Mahanagar Telephone Nigam Ltd. vs. Union of India and others [W.P. (C) 7542 of 2018 dated 06.04.2023], observed as follows: "28. In terms of the proviso to Section 73(1) of the Act, the extended period of limitation is applicable only in cases where service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, or collusion, or wilful misstatement, or suppression of facts, or contravention of any provisions of the Act or the Rules made thereunder with 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. xxxxx....