TaxTMI 
TaxTMI 
2025 (9) TMI 3
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....t under Section 75 of the Act in respect of SCN dated 07.10.2010 • vacated the remaining demand of Rs.17,92,27,587/- for the extended period (i.e. 01.04.2005 to 31.03.2009) in respect of SCN dated 07.10.2010. • confirmed the demand of service tax of Rs.1,40,07,253/- under Section 73 of the Act along with interest under Section 75 of the Act in respect of SCN dated 29.03.2011. • confirmed the demand of Rs.2,31,45,422/- under Section 73 of the Act along with interest under Section 75 of the Act in respect of SCN dated 14.09.2011. • dropped the penalties under Sections 76, 77 and 78 as proposed in all SCNs, under Section 80 of the Act. 1.2 Since all three SCNs were disposed of by a common adjudication order and the issue involved is identical, therefore, all three appeals are taken up together for the purpose of discussion and disposal. 2. Briefly stated facts of the case are that three SCNs were issued to M/s Punjab Roadways ('the assessees') on common allegations that the assessees had provided services in the category of 'Manpower Recruitment or Supply Agency's Services' to M/s Punjab State Bus Stand Management Company Ltd (....
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....der definition of the term 'Manpower Recruitment or Supply Agency'. 2.2 Further, in the SCN dated 07.10.2010, it was also alleged that the assessees did not get themselves registered with the jurisdictional Revenue Authorities for payment of service tax on services in the category of 'Manpower Recruitment or Supply Agency's Services' and did not disclose the services received from PUNBUS and also did not file statutory ST-3 Returns. Further, it was also alleged that the assessees suppressed the facts from the Revenue Authorities with intent to evade the payment of tax; consequently, extended period of limitation has been invoked. 2.3 Further, in all the SCNs, the assessees had also been charged with contravening the provisions of Section 68 read with Sections 66, 69 and 70 of the Act and Rules 4, 5, 6 and 7 of the Service Tax Rules, 1994. 2.4 The assessees filed detailed replies to the SCNs vide their letters dated 01.12.2010, 26.04.2011 & 17.10.2011. 2.4.1 In their replies, the assessees stated that due to weak financial position in the state of Punjab, it was decided that no funds would be sanctioned to replace the old and ageing buses of the assessees. The Govt of Pu....
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....l No. ST/621/2012 3. As for as the Revenue's appeal is concerned, the learned Authorized Representative for the Revenue submits that the impugned order, dropping the demand for the extended period, is not sustainable in law. 3.1 The learned Authorized Representative further submits that the assessees, i.e. M/s Punjab Roadways, were providing the services of Manpower Recruitment or Supply Agency's Service to PUNBUS, but were not registered with the department and also were not paying the service tax on the said services and when the enquiry was conducted then it was found by the Revenue that the assessees are providing the said services from the period 2005-06 onwards and they have suppressed the material facts from the Revenue; therefore, by invoking the extended period, the SCN dated 07.10.2010 was issued. 3.2 The learned Authorized Representative further submits that the learned Commissioner has wrongly held that the Revenue has not been able to establish any of the ingredients provided in proviso to Section 73(1) of the Act. He submits that the Revenue has established that is only by the enquiry conducted by the Revenue that non-payment of service tax was detected other....
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....ed that there was no mala fide on the part of the Noticees. There was no intention to evade the service tax hence the extended period of limitation could not have been invoked. The demand should have been issued in the normal period of time of limitation of one year. 4.18 If the Noticees had failed to declare the value of taxable service in the period between 2005-06 and 2008- 2009, pay service tax on time and file correct ST-3 Return. However, to invoke extended period of limitation, the initial onus of proof that that the Noticees had the knowledge that they were liable to pay service tax and intentionally evaded the tax was on the revenue. Only after the initial burden was discharged, the extended period of limitation could be applied. In the show cause notice dated 07.10.2010 there is allegations of suppression of fact and intentional evading of tax but no evidence has been adduced to show that the Noticees had the knowledge that they were liable to pay tax and they deliberately avoided to pay the tax. It is well established law that mere failure to pay the tax is not sufficient to invoke the extended period of limitation. The text of proviso to Section 73(1) is such t....
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....n etc. and on the other hand it should have been with intention to evade payment of duty. Both must concur to enable the Excise Officer to proceed under this proviso and invoke the exceptional power. Since the proviso extends the period of limitation from six months to five years, it has to be construed strictly. The initial burden is on the Department to prove that the situations visualised by the proviso existed. But once the Department is able to bring on record material to show that the appellant was guilty of any of those situations which are visualised by the Section, the burden shifts and then applicability of the proviso has to be construed liberally. When the law requires an intention to evade payment of duty then it is not mere failure to pay duty. It must be something more. That is, the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. The word 'evade' in the context means defeating the provision of law of paying duty. It is made more stringent by use of the word 'intent. In other words the assessee must deliberately avoid payment of duty which is payable in accordance with law. In Padmini Products v. Collector of Central....
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....e inaction on the part of the Noticees when they failed to pay the service tax. Further, no evidence has been adduced to show that the Noticees had the knowledge that they were liable to pay the service tax and they deliberately avoided to pay the service tax. The Noticees have all the time contested the liability to pay the service tax. In such a situation it is unfair and illegal to saddle them with any liability beyond the normal period of limitation of one year. In the normal period of limitation the liability is strict and is enforceable without any fault or mala fide on the part of the service provider. 4.19 In the show cause notice dated 7.10.2010, the demand has been issued for period 2005-06 to 2009-10. For the period from 2005-06 to 2008-09, for the last half year, October-2008 to March-2009, the last date for filing the ST-3 Return was 25th April, 2009 and accordingly, the last date for issuing the show cause notice in the normal period of limitation of one year was 25th April, 2010. The show cause notice has been issued on 07 10. 10. The show cause notice is, therefore, barred by limitation. When the show cause notice is barred by limitation for the last half y....
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....ab Roadways. He further submits that it was only the State of Punjab which was the employer of the alleged manpower/employees who were allegedly made to perform duties with the PUNBUS, therefore, only State of Punjab to be held as 'chargeable to service tax' as a service provider; whereas the SCNs in question were not issued/served to the State of Punjab. He further submits that M/s Punjab Roadways is not an entity in the eyes of law which could be held as chargeable to alleged liability as provided in Finance Act, 1994 qua service tax. He also submits that the Director of State Transport is not authorized to for service of any statutory notice issued to the Govt of Punjab; it could be served only through the Chief Secretary of the State or the Secretary of the Department of Transport, Punjab. He further submits that the alleged SCNs were illegal and unsustainable in law and this legal plea was not considered by the Commissioner while passing the impugned order. 7.1 The learned Counsel further submits that the assessees-Punjab Roadways were not engaged in supply of manpower to any other person and they had assigned the duties of their certain employees to the PUNBUS which is who....
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....ble service" means any service provided or to be provided to any person by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner and the term 'service provider' shall be construed accordingly. 10. Further, we find that before the amendment in the definition of "Manpower Recruitment or Supply Agency's Service", the service tax was leviable on the commercial concern but after the amendment w.e.f. 16.05.2008, it was provided that Manpower Recruitment or Supply Agency's Service can be provided by any person to any other person. 11. Further, we find that the assessees in this case, have assigned their drivers/conductors/staff to work for PUNBUS and the PUNBUS reimbursed the operational charges to the state government. 12. Further, we find that PUNBUS was incorporated for safe, reliable, efficient, sustainable service of transport to the general public on the existing route permits of the Punjab Roadways. The Govt of Punjab decided that the staff of Punjab Roadways was to be deployed with PUNBUS on assignment basis without any additional remuneration or deputation allowance. Further, we find ....