TaxTMI 
TaxTMI 
2024 (6) TMI 1448
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....nt assessee herein is engaged in providing taxable services under the category of Steamer Agents service, Goods Transport by Road service, Business Auxiliary Services, Business Support Services and for this purpose they had registered with the jurisdictional authorities of the Department. During the course of audit of the records of the appellant assessee by the Department officers, it was observed that the appellant assessee had shown income under various heads such as forwarders cargo fees, administration and documentation fees, freight and other services. Further, on examination of the terms and conditions mentioned in the Forwarders Cargo Receipt (FCR), the Department had interpreted that the services provided by the appellant assessee would fall under 'Clearing &Forwarding (C&F) agent services' in terms of definition under 65(25) of Finance Act, 1994 and sought the reasons for non-payment of service tax under the above taxable category from the appellant. In response to this, the appellant assessee by their letter dated 26.06.2006 had informed the Department that these incomes shown under various heads are on account of cargo handling services for export and hence ....
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.... certain claims allowed without any verifiable data is unsubstantiated. Accordingly, the department appellant also filed a separate appeal bearing No. ST/86828/2016 before the Tribunal. 3.1 Learned Advocate representing the appellant assessee has submitted that the disputed period in the present appeal is during April, 2003 to March, 2008. The total demand of service tax confirmed in the impugned order is Rs.11,50,68,830/- along with interest and penalties, against which they had filed this appeal; whereas the department appellant have also filed an appeal against the demand of service tax dropped by the original authority for an amount of Rs.25,99,10,158/- relating to appellants registration held at various other locations other than Mumbai, for which they had claimed that the original authority does not have jurisdiction and the same has been accepted by him. As regards the confirmation of the service tax demand forRs.11,50,68,830/- in the impugned order, this relates to various services as given below: Sr. No. Description Amount of S. Tax demand (in Rs.) 1. Forwarders Cargo Fees (CFS charges) 82940187 2. Documentation & Administration charges (FCR c....
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....the appellant's own case viz., APL Logistics (India) Pvt. Ltd. Vs. Commissioner of Central Excise, Chennai-III - 2014 (36) S.T.R. 1310 (Tri. - Chennai); APL Logistics (India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai - 2015 (37) S.T.R. 301 (Tri. - Mumbai) and Final Order No. A/1756/ 14/CSTB/C-I dated 17.11.2014 in Appeal No. ST/87451/2014Mum. Thus, he pleaded that the decision taken on these cases as above is also applicable to the present case to the extent that the disputed issue is the same i.e., levy of service tax levy on 'ocean freight'. 3.5 The amount of income shown as exchange gain is arising by accounting of foreign exchange gain or loss based on the income booked by the appellant, and it is not towards any service to be identified with any individual customer. Thus, he claimed that there is no service tax liability. As regards the brokerage charges, learned Advocate had stated that the appellant has already paid service tax on the said charges and hence there is no case of any further demand on this account. The other services pertaining to recovery of certain expenses incurred by the appellant are towards reimbursement of actuals such as customs duty pa....
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....(ii) Novocare Drug Specialities Pvt. Ltd. Vs. Commissioner of Central Excise, Mumbai-II - 2014 (34) S.T.R. 247 (Tri. - Mumbai) (iii) Swagat Freight Carriers Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai - 2014 (33) S.T.R. 81 (Tri. - Mumbai) (iv) INOX Leisure Limited Vs. Commissioner of Service Tax, Mumbai - 2016 (42) S.T.R. 497 (Tri. - Mumbai) affirmed by Hon'ble Supreme Court in dismissing Civil Appeal No. 3928 of 2016 filed by department (v) V.N.S.S. Textiles Vs. Commissioner of Central Excise, Madurai - 2010 (19) S.T.R. 785 (Tri. - Chennai) affirmed by Hon'ble High Court of Madras in dismissing Civil Misc. Appeal No. 769 of 2010 filed by department. 4.1 Learned Authorised Representative (AR) appearing for the department, reiterated the findings made by the learned Commissioner. He further stated that in confirmation of the adjudged demands, the original authority was not at hasty and gave full chance to the appellant to produce relevant documents; however, as the appellant assessee had not shown any document in support of their claim of the income from interest, ocean freight, margin money, other services etc. being not subject....
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....s and perused the records of the case. We have also perused the additional written submissions in the form of paper books submitted in this case by both sides. 6. The issues involved in these appeals is to determine the following issues viz., (i) whether the services provided by the appellant is leviable to service tax under the taxable category of 'Clearing & Forwarding Agent service' or not, in terms of the Finance Act, 1994 and Rules framed thereunder; (ii) whether the services provided by the appellant is leviable to service tax under the taxable category of Business Auxiliary Service (BAS) from February, 2006 and under the category of Business Support Services (BSS) from June, 2006 or not, as claimed by the appellant, in terms of the Finance Act, 1994 and Rules framed thereunder; and (iii) whether the Commissioner of Service Tax, Mumbai-VII has jurisdiction over all the Branches of the assessee appellant for adjudication of the SCN dated 21.10.2008 or not, under the Finance Act, 1994. 7.1 We find from the Show Cause Notice dated 21.10.2008, the department, on the basis of the documents submitted by the appellant assessee, had conten....
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....s are in the nature of support services rendered to the customers of its overseas entity APLL HK, in consolidation of export cargo from India. The services provided by the appellant assessee included the following viz. (i) receiving cargo from various Indian suppliers/exporters of an overseas buyer; (ii) sorting the cargo pertaining to various overseas buyers; (iii) stuffing the cargo in the respective containers to ensure safe transportation of cargo; (iv) transport of cargo to ports or airports; and (v) loading of container on ship/aircraft for transportation of cargo to overseas buyer. For performance of these services the appellant assessee have received the consideration as per above agreement. 7.3 We have perused the relevant clauses of the aforesaid agreement submitted as a part of the appeal paper book. The relevant clauses of the said agreement are extracted and given below: "AGENCY AGREEMENT BETWEEN APL LOGISTICS HONG KONG AND APL LOGISTICS (INDIA) PVT. LTD. This Agreement is made effective the 1st January, 2002, between APL Logistics Hong Kong (hereinafter called "APLL HK") a company incorporated in Hong Kong and having off....
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....receipt of cargo, to prepare and issue accurately the APLL HK of Lading in the form and standard prescribed by APLL HK and such documents as required by port Authorities at ports, in transit or at destination, relating to the Vessels' carriage or discharge of cargo form or to the Territory; 7. To arrange for container Freight Station ("CFS") and Container Yard ("CY") facilities and other cargo handling operations, to attend to the handling of and transshipment of cargo and to maintain contract with forwarding agents, shippers and consignees for the purpose of attending to transportation, storage facilities, palletisation, clearing of cargo and /or special cargo, heavy lifts, port and other authorities and trade organization; 8. To secure and effect delivery of cargo to the Vessel; 9. To coordinate and liaise with other agents of APLL HK concerning to Vessels' arrivals/departures, cargo space, booking, stowage survey and tracing of cargo; 10. To perform a container inspection program and to effect cleaning when necessary. 11. To take charge of and report the receipt of cargo. 12. To issue arrival notices, and upon of cargo ....
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....ment charges at the rates set forth Schedule I (Part I). xx xx xx xx xx 4. This Agreement may be amended only by mutual consent and in writing duly signed by the authorized representatives of both parties and annexed as Addendum to the Agreement. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed the day and year first above written. APL LOGISTICS HONG KONG APL LOGISTICS (INDIA) PVT. LTD. Signed by: Signed by: Print Name: Rick Moradian Print Name: Glynis Bryan Title: Director / Regional President Title: Director / CFO, APLL ...... SCHEDULE I Agent's Compensation The following rates and conditions of compensation will apply commencing upon the date of execution of the Agreement and will continue unless terminated or amended by written agreement between the Agent and APLL HK: A. Compensation 1. The Agent shall invoice APLI. HK monthly, in accordance with Articles 4 and 6 of the Agreement, for document charges arising from the crea....
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....ts required to be collected, and documents not required, prior to cargo release; sample bank guarantee format; user agreement. The said agreement clearly provides that the appellant assessee is an 'agent' to APLL HK in performing various activities or providing various services in connection with the cargo handled by them. The nature of such activities are wide enough to cover operational, financial, accounting, use of software and computerization, marketing work of APLL HK. 7.5 In order to appreciate by way of illustration, we find that the Clause A to Article-1 provide that the appellant assessee will arrange procurement and securing of cargo for its transportation through various vessels owned or operated by APLL HK; provide information on freight rates, terms and conditions of carriage of goods, negotiate rates; book the cargo for APLL HK; prepare and issue Bill of Lading for APLL HK and other documents required for Port authorities; arrange for Container Freight Station or Container Yard facilities for handling cargo; secure and effect delivery of cargo the Vessel for ultimate voyage of the vessel to export out of the country and co-ordinate and liaise with other agen....
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....ers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods;' (104C) [Inserted by the Finance Act, 2006, w.e.f. 1-5-2006.]"support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, 7[operational or administrative assistance in any manner], formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation.-For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, intern....
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....cture of excisable goods. xx xx xx xx xx (105) "taxable service" means any service provided [Inserted by the Finance Act, 2005, w.e.f. 16-6-2005.] or to be provided,_ (j) [Substituted for "to a client" by the Finance Act, 2008, w.e.f. 16-5-2008.] to any person, by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner; (zr)to any person, by a cargo handling agency in relation to cargo handling services; (zzb) to a client, by [Substituted for "a commercial concern" by the Finance Act, 2006, w.e.f. 1-5-2006.] any person in relation to business auxiliary service;" Service Tax Rules, 1994. "Export of services. Rule 6A. (1) The provision of any service provided or agreed to be provided shall be treated as export of service when,- (a) the provider of service is located in the taxable territory, (b)the recipient of service is located outside India, (c)the service is not a service specified in section 66D of the Act, (d)the place of provision of the service is outside Ind....
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....aring and forwarding agent detailing the terms and conditions and also indicating the commission or remuneration to which the C&F agent is entitled. A clearing and Forwarding agent normally undertakes the following activities- (a) Receiving the goods from the factories or premises of the principal or his agents; (b) Warehousing these goods; (c) Receiving despatch orders from the principal; (d) Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorised transporters of the principal; (e) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal. 2.3 It has been decided that the person responsible for collecting the service tax in the case of services rendered by a clearing and forwarding agent shall be the person engaging/appointing a clearing and forwarding agent (Notification No. 26/97-service tax refers). It may be noted that unlike in the case of other service tax levies where the service provider is the person responsible for collecting the service tax, in the case of services rendered by the clearing and forwardin....
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....nsporters, maintaining records of stock, receipt and despatch on behalf of the principal, for which the C&F agents receives the remuneration as a commission, either as a percentage of turnover or in any other manner as variable commission based on certain performance indicators agreed upon between them. These aspects are clearly absent in the present factual matrix of the case. The present case is concerned only with handling of export/import cargo on behalf of the principal APLL HK, who is a vessel owner or a Non-Vessel Operating Common Carrier (NVOCC), involved in transportation of such cargo for their clients, both of whom are situated outside India. Thus, on the basis of facts of the present case, we are of the considered view that the services/activities performed by the appellant assessee as per agreement dated 01.01.2002 does not fall under the category of 'clearing and forwarding agent' service. 8.4 In order to further examine whether the services provided by the appellant assessee to its overseas entity APLL HK is covered under the scope of any other services or not, we have also examined the relevant provisions of the Finance Act, 1994 and Rules framed thereunder....
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....s auxiliary service as follows. Further, use of information technology or computers for providing Business Auxiliary Services (BAS) is clarified to have been covered under the scope of BAS in the said clarification as follows: "2.1.3 Certain doubts have been raised in case of business auxiliary services. In this regard the following is clarified, While it is not possible to give an exhaustive list of business auxiliary services, the following are illustrations of services that are covered under this category viz. evaluation of prospective customers, processing of purchase orders, customer management, information and tracking of delivery schedules, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, managing distribution & logistics. The services provided in relation to getting a customer, verification of prospective customer, processing of purchase order etc would also be covered under service tax, as the law specifically provides for inclusion of such services as business auxiliary support services. As regards the question whether insurance agents, C&F agents working on commission basis fal....
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....xable service under the heading business auxiliary service." The above clarification clearly explain that the services provided by the appellant assessee in this case is in the nature of Business Auxiliary Services. 8.7 We also find that in the present case, the assessee appellant is providing services to APLL HK or by extension to the clients/customers of APLL HK who are situated abroad i.e., outside India. Any services that are provided outside the taxable territory and when such services fulfil the specified conditions provided Rule 6A of Service Tax Rules, 2005 to qualify as 'export' including the essential requirements that the recipient of service is located outside India, payment of service provided is received in convertible foreign exchange, this would be treated as export of services, and there is no levy of service tax thereon. Further, it was specifically provided under Rule 4 of Export of Services Rules, 2005 that any taxable services could be exported without payment of service tax. In other words, the provision of services that were under the tax net of service tax were those services provided within the territory of India except the State of Jammu and Ka....
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....ect of ocean freight, advance manifest charges/Forward Cargo Receipt charges, bunkering charges, currency adjustment charges/exchange gain including clearing and forwarding agent services, has been decided by the Tribunal in a number of cases holding that these are not leviable to service tax. In the appellants own case, the Co-ordinate Bench of the Tribunal in the case of APL (India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai - 2015 (37) S.T.R. 301 (Tri. - Mumbai) had decided that service tax is not leviable on these charges. The relevant paragraph of the said order is extracted and given below: "4.2 The short question for consideration is whether the ocean freight, currency adjustment charges, bunkering charges, advance manifest charges collected by the appellant on behalf of the shipping lines can be subjected to levy of Service Tax. It is undisputed that most of these charges form part of the transaction value in respect of customs matters and therefore, the question of levy of Service Tax on a customs transaction would not arise at all. If the appellants have collected these charges and remitted the same to the shipping lines, the whole amount received and tran....
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....irected to produce documents for proper verification. 10. Accordingly, we set aside the impugned order and the matter is remanded back to the adjudicating authority to decide afresh after considering the submissions of the appellant in accordance with law. The appeal is allowed by way of remand. Stay application is disposed of. M.A. for change of cause title is allowed." 9.3 In another case dealing with similar issue, we find that the Coordinate Bench of the Tribunal had decided the issue in favour of the appellant assessee, in the case of Gudwin Logistics Vs. Commissioner of Central Excise, Vadodara - 2012 (26) S.T.R. 443 (Tri. -Ahmd.). The relevant paragraphs of the said order are extracted and given below: "19. It can be seen that C.B.E.&C. had clearly clarified that essential characteristic of any services to get classified under the category of clearing & forwarding agent is relationship between the service provider and receiver and the same should be in the nature of principal (owner) and agent. In the entire case before us, we find that this relationship has not been established by the Revenue which is obvious as the appellant herein is not functioning a....
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....word 'and' should be understood in a conjunctive sense. (See Maharaja Sir Pateshwari Prasad Singh v. State of U.P. (1963) 50 ITR 731. In these circumstances if we read the word 'and' as 'or' then it would amount to doing violence to the simple language used by Legislature which cannot be imputed ignorance of English language. In that regard we place reliance on the judgment of Hon'ble the Supreme Court rendered in the case of Inayat Ali Khan v. State of U.P., (1971) 2 SCC 31 (Para 5) and para 6 of the judgment of Hon'ble the Supreme Court rendered in the case of APE Belliss India Ltd v. Union of India, (2001) 132 E.L.T. 8. The observations of their Lordship reads thus : "6..........A plain reading of the Section (sic Tariff Public Notice) clearly shows, as contended by Mr. Bhatt, that for an alloy steel to be considered as stainless steel, it will have to satisfy two conditions i.e. The alloy steel should be known in the trade as stainless steel and further, it should contain 11% chromium as a component of the allow steel. This is clear from the use of the word "and". If the intention of the trade notice was to treat the two types of alloy steels as stainless steel, then i....
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.... Section 65(104)(j) read with Section 65(25) of Chapter V of the Finance Act, 1994, contemplates only one person rendering service as 'Clearing & Forwarding Agent". 67. The Court further held and observed that if, a person rendered service as "Forwarding Agent" without rendering any service as "Clearing Agent", he could not be brought within the tax net, since he could not be deemed to have rendered both services." 22. It can be seen from the above reproduced portion of the judgments, that law has been fairly settled which indicate that the clearing & forwarding services can be considered as being rendered, if both the activities are connected and simultaneously done. As has been reproduced by us, the appellant in this case, is not engaged in any kind of activities which are attributable to clearing & forwarding agent service. 23. Coming to the aspect of expressions in the definition of clearing & forwarding agent, more specifically "directly or indirectly", "in any manner", we find that the larger bench of this Tribunal, in case of Larsen & Toubro v. C.C.E. Chennai, 2006 (3) S.T.R. 321 (Tri-LB) (wherein, I was also one of the Member), had specifically he....
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.... providing service of clearing & forwarding agent, are incorrect and is liable to be set aside and we do so." 9.4 Further, in another case dealing with similar issue, we find that the Co-ordinate Bench of the Tribunal had decided the issue in favour of the appellant assessee, in the case of Swagat Freight Carriers Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai - 2014 (33) S.T.R. 81 (Tri. -Mumbai). The relevant paragraphs of the said order is extracted and given below: "4. The ld. Additional Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities and submits that the appellant is rendering a bundle of services, some of which might come under "Clearing & Forwarding Agency Service". 5. After hearing both the sides and going through the records of the case, it is evident that the appellant is rendering freight forwarding service. Freight forwarding is distinct and different from "Clearing & Forwarding Agency Service" as defined in law. In the light of the decisions (supra) relied upon by the appellant, the services rendered by the appellant do not come under the category of "Clearing & Forwarding Agency Service". Accordingly,....
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....hich no Service Tax was paid by the Noticee during the period 01.04.2003 to 31.03.2008. Accordingly, demand of Service Tax amounting to Rs. 37,49,78,988/- has been made in the show Cause Notice by invoking the proviso to Section 73(1) of the Finance Act, 1994, besides proposing recovery of interest under Section 75 and imposition of penalty under Section 76, 77 and 78 ibid. xx xx xx xx xx I. Service Tax demand on revenue earned at location other than Mumbai - The Noticee submits that during the period of Show Cause Notice, they were holding separate registration for each branch located at Mumbai, Kolkatta, Chennai, Cochin, New Delhi, Tuticorin and Bangalore. They had obtained centralized registration only in November 2010. The Audited Financials are for he revenue earned from all the locations. The Show Cause Notice dated 21.10.2008 has demanded a service Tax on the revenue shown in the Financials, which is for all the locations. As the Commissioner of Service Tax, Mumbai has jurisdiction only in Mumbai, the Service Tax demand on revenue earned by locations ....
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....Time/Fixed Deposits is not towards any service rendered, therefore, no Service Tax can be charged on such income. Hemant V. Shah and Co., Chartered Accountants, vide its above said CA Certificate dated 18.12.2015 have certified the amount of interest as under - Period Interest pertaining to Mumbai branch Interest pertaining to branches other than Mumbai Total 2006-07 1,90715/- 5,88,559/- 7,79,60,541/- 2007-08 1,22,261/- 3,47,131/- 4,69,392/- However, in respect of the foreign currency earned, the Noticee have not explained as to in respect of what activity the foreign exchange is earned so as to examine whether the activity is leviable to Service Tax or otherwise. Since the claim made by the Noticee is unsubstantiated, I am constrained to take a view that the amounts earned due to foreign currency fluctuations will be part of the taxable value. 19. Keeping in view the discussions made in para 19 above, the Service Tax payable by the Noticee on the said 'Clearing & Forwarding services', for the period 2003-04 to 2007-08 has to be computed. As stated a....
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....ovided in terms of the Orders issued by CBEC under Rule 3 of the Service Tax Rules, 1994, providing the jurisdiction for exercise of the powers under Chapter V of the Finance Act, 1994, had restricted the demand of service tax to the amount of demand attributable to the Mumbai branch on the basis of the details furnished by the Chartered Accountant in his certificate dated 18.12.2015. 10.3 We find that Rule 3 of the Service Tax Rules, 1994 provide for appointment of officers for the purpose of exercising the powers under Chapter V of the Finance Act, 1994. We further find that the SCN dated 21.10.2018 does not specifically mention that the appellants had centralized registration during the relevant period and thus they had issued demand notice covering all the locations/branches of the assessee appellant. Further, we also find that in different jurisdiction i.e., at Chennai, the Commissioner of Service Tax, Chennai had also issued show cause notice for recovery of service tax payable on the business auxiliary services for the period from 10.09.2004 to 30.04.2006 and 10.09.2004 to 31.01.2006 vide SCN 12.07.2007; Similarly one another SCN dated 18.09.2009 was also issued for....
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....gations, with the consent of the Commissioner having jurisdiction after grant of centralized registration. In such cases, the draft show cause notices will be prepared by the Commissionerate, who has investigated the case. However, action for issue of show cause notice or adjudication of pending show cause notices where personal hearings have not been completed on the date of grant of centralised registration, would be done by the Commissionerate, having jurisdiction subsequent a centralised registration. 3.2 the Commissioner, having jurisdiction subsequent a centralised registration, will ensure that all files, records and documents are transferred to his/her office, are properly recorded and entered in appropriate registers. 4. A report confirming transfer of all records, except as stated in para 3.1 above, may please be sent to DG ST by 15.04.2007. DG ST will send a consolidated report and the matter to Board by 25.04.2007." 10.5 On perusal of the above instructions, it appears that these are the nature of administrative instructions for proper handling of files, documents and investigation records by a single authority having jurisdiction ....
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....esorting to suppression of the material facts with intent to evade payment of the same. ... In view of the foregoing, I hold that the Noticee is liable for penalty under Section 78 of the Finance Act, 1994, which shall be equal to hundred percent of the amount of such Service Tax determined as payable by the Noticee. As per the amended penal provisions, penalty under Section 76 of the Finance Act, 1994 cannot be imposed simultaneously when penalty is held to be payable under Section 78 ibid. Therefore, I do not impose any penalty under Section 76 of the Finance Act, 1994." 11.2 The legal provisions contained in Section 73(1) ibid provide that extended period can be invoked for demand of service tax, in situations where there is any involvement of fraud, or collusion, or wilful misstatement, or suppression of facts, or 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 appellant assessee. We find that neither in the show cause notice nor in the impugned order, there is any specific allegation or finding for invoking such legal provisions. On the other hand, we find that the show cause notice d....
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....e necessary to be discussed before proceeding to the merits of this case. However, these words have been interpreted as given in Sections 28 of the Customs Act, 1962 (hereinafter referred to as "the Customs Act") and 11A of the [Central] Excise Act, 1944 (hereinafter referred to as "the Excise Act"). In order to determine if the same interpretation extends to Section 73 of the Act the following decisions of the Supreme Court have to be looked at. In the case of Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur [(2013) 9 SCC 753 = 2013 (288) E.L.T. 161 (S.C.)] the Supreme Court discussed its previous judgments to determine the applicability of the proviso to Section 28 of the Customs Act for extension of limitation period for issuing notice for payment of duties that have not been levied, short-levied or erroneously refunded. The relevant paragraphs of the judgment are excerpted below : "9. The show cause notice was issued on 2-8-2001, more than six months after the appellant had imported furnace oil on behalf of Uniworth Ltd. in January, 2001. This time period of more than six months is significant due to the proviso to Section 28 of the Act. The Section, at....
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.... Act and the proviso to Section 73(1) of the Act, both set out conditions for extension of limitation period for issuing of a Show Cause Notice. The difference between the two sections lies in the insertion of conditions of 'fraud' and 'contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of Service Tax' in Section 73 of the Finance Act, 1994. In Uniworth (supra), the Supreme Court discussed the interpretation of the proviso of a similar provision in Section 11A of the Excise Act and held that it is parimateria to the proviso to Section 28 of the Customs Act. The relevant paragraphs are excerpted below : "13. This Court, in Pushpam Pharmaceuticals Co. v. Collector of Central Excise, Bombay [1995 Supp (3) SCC 462], while interpreting the proviso of an analogous provision in Section 11A of The Central Excise Act, 1944, which is parimateria to the proviso to Section 28 discussed above, made the following observations : xxxxxx xxxxxx xxxxxx 18. We are in complete agreement with the principle enunc....
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....the words "with intent to evade payment of duty" were of utmost relevance while construing the earlier expression regarding the misstatement or suppression of facts contained in the proviso. Reading the proviso as a whole the Court held that intent to evade duty was essentially before the proviso could be invoked. 55. Though it was sought to be contended that Section 28 of the Customs Act is in parimateria with Section 11A of the Excise Act, we find there is one material difference in the language of the two provisions and that is the words "with intent to evade payment of duty" occurring in proviso to Section 11A of the Excise Act which are missing in Section 28(1) of the Customs Act and the proviso in particular.... 56. The proviso to Section 28 can inter alia be invoked when any duty has not been levied or has been short-levied by reason of collusion or any wilful misstatement or suppression of facts by the importer or the exporter, his agent or employee. Even if both the expressions "misstatement" and "suppression of facts" are to be qualified by the word "wilful", as was done in the Cosmic Dye Chemical case while construing the proviso to Section 11A, the mak....
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....lained in an American case in the following words: "Statutes are in parimateria which relate to the same person or thing, or to the same class of persons or things. The word par must not be confounded with the word simlis. It is used in opposition to it - intimating not likeness merely but identity. It is a phrase applicable to public statutes or general laws made at different times and in reference to the same subject." [United Society v. Eagle Bank, (1829) 7 Connecticut 457, p. 470, as cited in CRAIES, Statute Law, p. 134 (7th Edition)]. The provisos to Sections 11A of the Excise Act, 28 of the Customs Act and Section 73 of the Finance Act, refer to the same class of persons, i.e., persons from whom tax has been not been levied, or has been short-levied or erroneously refunded. The subject matter of these provisos is issuance of a Show Cause Notice in order to collect such tax. Further, there seems to be no difference in language of the proviso to Section 11A of the Excise Act and Section 73(1) of the Finance Act. Since, the pith and substance of both these provisions is the same, the various judgments of the Supreme Court discussing the interpretation of proviso to Sec....
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....ccount of fraud, collusion or wilful misstatement or suppression of facts, or in contravention of any provision of the Act or Rules with the intent to evade payment of duty, demand can be made within five years from the relevant date. In the present case, we are concerned with the proviso to Section 11A(1). 24. In the case of Cosmic Dye Chemical v. Collector of Central Excise, Bombay [(1995) 6 SCC 117], this Court held that intention to evade duty must be proved for invoking the proviso to Section 11A(1) for extended period of limitation. It has been further held that intent to evade duty is built into the expression "fraud and collusion" but misstatement and suppression is qualified by the preceding word "wilful". Therefore, it is not correct to say that there can be suppression or misstatement of fact, which is not wilful and yet constitutes a permissible ground for invoking the proviso to Section 11A. 25. In case of Pushpam Pharmaceuticals Co. v. C.C.E. [1995 (78) E.L.T. 401 (S.C.)], this Court has held that the extended period of five years under the proviso to Section 11A(1) is not applicable just for any omission on the part of the assessee, unless it is a d....
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....n paragraphs 11.1 and 11.3, and on the basis of the judgement of the Hon'ble High Court of Delhi as above, we are of the considered view that invocation of extended period for demand of service tax in the present cases is not sustainable. Consequent to this, we also find that the penalty imposed on the appellants under Section 78 ibid also does not survive on the above grounds. 11.5 We further find that the issues relating to demand of service tax from several locations having separate service tax registration by issue of show cause notice by DGCEI answerable to single authority i.e., the Commissioner of Service Tax, Mumbai was decided by the Tribunal in the case of Inox Leisure Limited Vs. Commissioner of Service Tax, Mumbai - 2016 (42) S.T.R. 497 (Tri.- Mumbai) by holding that such action is without jurisdiction and the demands were set aside. The relevant paragraphs of the said order of the Tribunal is extracted and given below: "10. Above discussion on the basis of the Agreements leaves no room for doubt to hold that the appellant provided BAS to its client CCIPL on which tax is payable. However, we agree with the appellant that the service tax on import of 'Archite....