TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 90
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....mmissionerates under the category of "management, maintenance or repair service". Service Tax Registration No. ACRPJ6929JST001(Barbil, Bhubaneswar Commissionerate) has been taken on 03.05.2006. Service Tax Registration No. ACRPJ6929JST001 (Adityapur, Jamshedpur Commissionerate) has been taken on 07.05.2008. Thus, it can be observed that both the units were given the same registration number. The appellant, being a proprietorship concern, prepares a consolidated set of financial statements for both its branches. 3. A Show Cause Notice dated 21.12.2010 was issued to the appellant proposing demand of Service Tax of Rs.3,75,34,624/-, inclusive of cess, along with interest and penalty. 3.1. The said Show Cause Notice was adjudicated vide the impugned order wherein the demand of Service Tax of Rs.3,75,34,624/- has been confirmed, along with interest and an equal amount of tax as penalty has been imposed under Section 78 of the Finance Act, 1994. Further, penalties have also been imposed under Sections 76 and 77 of the said Act. 4. Aggrieved against the confirmation of the demands, along with interest and penalties, the appellant has filed this appeal. 5. The Ld. Counsel appearing on ....
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....l for the appellant submits that during the material period, Service Tax was required to be paid on the gross amount received by the provider of service. However, he submits that in the impugned Show Cause Notice, Service Tax has been demanded for the period 2005-06 up to September, 2010 on the gross revenue shown in their Profit & Loss Account and other records. In this regard, they also contend that the Financial Statements are prepared on the basis of mercantile system of accounting whereas Service Tax arises on the receipt of consideration for the services provided. Thus, the appellant submits that charging Service Tax on the gross revenue is not in accordance with law. 5.4. The Ld. Counsel for the appellant also submits that the appellant has provided different types of services and is eligible for exclusion of materials used for providing the work contract service, but the entire demand has been raised under the head of maintenance or repair Service. It is submitted that these civil works were done along with materials and hence, even if there is a Service Tax liability, the liability should be under the category of "works contract service" and not under "management, mainten....
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.... available to them as per Notification No.08/2005-ST dated 31.03.2005, which provides exemption to production or processing of goods on behalf of client, which is covered under the head of 'business auxiliary service'; that the Department has denied benefit of Notification No. 08/2005-ST dated 31.03.2005, wherein production or processing of goods on behalf of client has been specifically exempted. It is their submission in this regard that the service provided by them of crushing the iron ore on the basis of job chargesis to be calculated on per ton the basis and such service cannot be categorized under 'maintenance or repair service' for the purpose of demanding service tax. 5.8. It is also mentioned that the appellant has deposited the tax based on his calculation in two registrations mentioned above. The appellant thus contends that service tax cannot be demanded for mismatch of income reflected in Income Tax Record and ST-3 Returns because figures reflected in the financial statements shown to Income Tax authorities cannot be used to determine Service Tax liability unless there is evidence shown that it is taxable. Reliance in this regard is placed on the decision of the CESTA....
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.... in fact, the entire demand has been raised on the basis of the income tax returns and other records submitted by the appellant. The appellant cited the case law of Hindustan Insecticides Ltd. Vs. Commissioner of Central Excise, LTU [2013 (297) E.L.T. 332 (Del.)] wherein it has been held that as short payment was not due to fraud, collusion viz. intentional, deliberate or deceitful means, extended period of limitation not applicable. In support of contention that there must be a wilful misstatement or suppression of fact for invoking extended period of limitation, the appellant has cited the following decisions: a. Hospitech Management Consultants Pvt. Ltd. Vs. Commissioner of Service Tax, New Delhi. [(2023) 7 Centax 134 (Tri.-Del)] b. C.C., C.E. & S.T., Bangalore (Adjudication) Vs. Northern Operating Systems Pvt. Ltd. [2022 (61) G.S.T.L 129 (S.C.)] 5.11. It has also been submitted by the appellant that they had paid Rs.1,86,11,176/- (inclusive of cess) under the Service Tax Registration taken in respect of the Jamshedpur Commissionerate as confirmed in the Order-in-Original passed by the Ld. Commissioner, Jamshedpur; however, the ld. adjudicating authority has failed to take ....
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.... Factory v. Collector of Central Excise, A.P. [2006 (197) E.L.T. 465 (S.C.)] wherein it was observed as under: - "9. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant." 10. Further, we take note of the fact that the demand has been raised on the basis of the gross amount mentioned in the Profit & Loss Account of the appellant. However, during the relevant period, Service Tax was payable only on the amount received by the provider of taxable services. In this regard, it is pertinent to note that the appellant were preparing the balance sheet and Profit & Loss Account as per the mercantile system of accounting, which shows the gross revenue. We agree with the submission....
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....the Departmental officers ought to have raised an objection when the appellant filed the said Returns. In fact, the issue for the disputed period has been enquired by four different agencies of the Department, as mentioned in paragraph 5.9 of this Order (supra). It is seen that the Department was aware of the activities undertaken by the appellant since 05.07.2007, when the first communication had been received from the Preventive Commissionerate, Bhubaneswar-II. We also find that the entire demand has been raised on the basis of the data received from the income tax returns and other records submitted by the appellant. Therefore, considering the facts and circumstances of the case, we agree with the submission of the appellant that they have not suppressed any facts from the Department. 13.1. In this regard, we rely on the decision in the case of Hindustan Insecticides Ltd. Vs. Commissioner of Central Excise, LTU [2013 (297) E.L.T. 332 (Del.)] wherein it has been held that extended period of limitation can be invoked only when fraud, collusion viz. intentional, deliberate or deceitful means has been established. As there is no wilful mis-statement or suppression of fact on the pa....