TaxTMI 
TaxTMI 
2025 (11) TMI 435
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....not paid Service Tax thereon, the officers of the Kanpur Regional Unit of Directorate General of Central Excise Intelligence, Kanpur (hereinafter referred to as 'KRU' for short) commenced investigations against him. 2.2 As per intelligence available with DGCEI, a MOU had been executed between Sahara Group and appellant in connection with acquisition of land at Azamgarh, Uttar Pradesh. To procure the said MOU and to examine the Service Tax liability, letter F. No. DGCEI/KRU/INV/20/09/205 dated 11.02.2009 was written to DPS calling for the Balance Sheets for the Financial Years 200506. 2006-07, 2007-08 and 2008-09; attested copies of all the MOUs/ Agreements between DPS and M/s Sahara India, Lucknow, payment received by DPS in this regard; date wise till date; and copies of Service Tax Registration, returns along-with details of Service Tax paid, if any, on this issue, 2.3 As appellant did not provide the information, summons were issued on 29.09.2009 and 16.11.2009, directing him to tender his statement in this regard. In response to summon dated 16.11.2009, Shri Devendra Pratap Singh, appeared before the investigating officers on 26.11.09 and tendered his statement. D....
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....ods has been worked out as below: Period Gross Amount Received Taxable Value Service Tax (Including Cess) Rate Amount 01.01.06 to 17.04.06 2,57,45,647 2,33,62,656 10.2 23,82,991 18.04.06 to 10.05.07 5,00,000 4,45,474 12.24 54,526 11.05.07 to 24.10.08 91,06,972 81,05,173 12.36 10,01,799 TOTAL 3,53,52,619 34,39,316 2.6 The Show Cause Notice dated 04.01.2011 was issued to the Appellant asking them to show cause as to why:- "1. Service Tax totally amounting to Rs. 34,39,316/- (Rs. Thirty Four Lacs Thirty Nine Thousand Three Hundred and Sixteen only) (Service Tax Rs. 33,62,344/- + Education Cess Rs. 67,246/- + Higher Edu. Cess Rs. 9,726/-) during the period 02.01.2006 to 24.10.2008 should not be recovered from them under proviso to Section 73(1) of the Finance Act, 1994; 2. The interest at the appropriate rates should not be recovered from them under Section 75 of the finance Act, 1994; 3. Penalty should not be imposed upon them under Section 76 of the Finance Act, 1994 for not paying service tax in accordance with the provisions of Section 68 of the Finance Ac....
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....it is clear that the officers recorded statement of the appellant on 26.11.2009 and during statement he provided all the documents, on the basis of which the show cause notice was issued with the allegation of suppression of facts. ⮚ The appellant in his statement clearly stated that due to lack of knowledge he could not take service tax registration, not filed ST-3 returns and not paid service tax. ⮚ when the appellant explained each and every fact and provided all the records and the documents on 26.11.2009, on the basis of which show cause notice is issued, why the show cause notice was not issued within one year and on what basis allegation of suppression is made. ⮚ Out of huge demand of Rs.34,39,316 the adjudicating authority reduced it to Rs.10,96,452, allegation of suppression does not stand. The appellant did not suppress any fact from the department. ⮚ Reliance is placed on the following decisions o H.M.M. Limited [1995 (76) ELT 497 (SC)] o Nestle India Ltd [2009 (235) ELT 577 (SC)]. o Pushpam Pharmaceuticals Co. [1995 (78) ELT 401 (SC) o Infinity Infotech Parks Ltd. [2013 (....
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..... (iv) The show cause notice is time barred. The above issues are discussed as under: - 1. Sale and purchase of land is not a Real Estate - As per Section 65 (88) of the Finance Act, 1994, the definition of Real Estate Agent is given as below: "Real Estate Agenet" means a person who is engaged in rendering any service in relation to sale purchase, leasing or renting of real estate and includes a real estate consultant"; A "real estate consultant" is defined in Section 65 (89) as follows:- "Real Estate Consultant" means a person who renders in any manner, either directly or indirectly, advice, consultancy or technical assistance, in relation to evaluation, conception, design, development, construction, implementation, supervision, maintenance, marketing, acquisition or management, of real estate". The term Real Estate has not been specifically define by the Finance Act, 1994 but as per dictionary meaning the term Real Estate can be taken to cover sites, houses apartments, villas, offices, commercial space, farm land, agricultural land, flats etc. The nature of service rendered by the appellant can be understood by the MOU signed ....
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....rvice receiver - On this issue it may be seen that as per provisions of Section 68 of the Finance Act, 1994, every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed. The plea of the appellant that they have not received any service tax from the service receiver is not in consonance with the statutory provisions. Liability to pay service tax in the present case is on the service provider and payment of the service tax is not subject to condition of its receipt from the service receiver. However, on going through the order of the adjudicating authority it is evident that the service tax has been calculated taking the gross amount of value of services as inclusive of service tax. Therefore, the contention of the appellant is not justified. 3. The adjudicating authority has calculated the service tax under site formation on the gross amount of Rs. 51,51,361/- without giving abatement in respect of diesel consumed in tractor and bricks and cement used in the construction of drainage As per agreement the scope of the work has been defined as "Levelling of soil includ....
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....g the period 02.01.2006 onwards, to their clients from the jurisdictional Service Tax authorities. They never filed the service tax returns in the form ST-3 as prescribed in the Service Tax Rules, 1994. It also appears that by action of omission or failure on the part of DPS, to furnish the returns as prescribed under Section 70 of the Act ibid, for the period 02.01.2006 onwards, to disclose wholly and truly all the material facts viz: nature of services provided by them, the gross amount received by them for rendering the taxable service, necessary for their assessment for the said period, the value of taxable service had escaped assessment. It also appears that the DPS did so deliberately with intent to evade payment of service tax. Had the officers of this Directorate General not initiated the inquiry against DPS, the said non-payment of Service Tax by DPS would not been unearthed. Hence, the provisions of Section 73(1) of the Finance Act, 1994 for the extended period of limitation appears to be invokable and service tax amounting to Rs. 34,39,316/- (Service Tax Rs. 33,62,344/- + Education Cess Rs. 67,246/- + Higher Edu. Cess Rs. 9,726/-) during the period 02.01.2006 to 24.10.20....
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....s. Kamal Lalwani - 2017[49] S.T.R. 552 [Tri.-Del.] b. Shri Balaji Industrial Products Ltd. Vs. Commr. Of Cus. & C. Ex., Jaipur- 2019 [370] E.L.T.280[Tri.-Del.] c. Antares Services Pvt. Ltd. Vs. Commissioner of C. Ex., Chandigarh - 2024[388] E.L.T.200[Tri.-chan.] d. Balajee Machinery Vs. Commissioner of CGST & Excise, Patna-II- e. Maa Kalika Transport Pvt. Ltd. Vs. Commissioner of CGST & C.Ex., Rourkela. -2023[79] G.S.T.L. 263[Tri. Kolkata] f. Om Sai Professional Det. & Security Ser. P. Ltd. Vs. C.C.E., Guntur-2008(10) S.T.R.59[Tri.-Bang.] 8. In Central Sales Tax, New Delhi versus Kamal Lalwani (supra), it has been categorically observed that all the activities undertaken by the appellant were a part of the reflection made in the balance sheet and income tax returns in which case no suppression or malafide can be attributed to the assessee. Revenue has not been able to produce any evidence on record to show that tax, which, according to the Revenue was payable, was not being paid on account of any malafide. Hence the extended period would not be available to the Revenue. Similarly in Shri Balaji Industrial Products Ltd (....
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....l misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or willful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. 13. This Court, in Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay - 1995 Supp (3) SCC 462 = 1995 (78) E.L.T. 401 (S.C.), while interpreting the proviso of an analogous provision in Section 11A of The Central Excise Act, 1944, which is pari materia to the proviso to Section 28 discussed above, made the following observations : "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within....
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....e 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 mis-statement 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 Company 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 deliberate attempt 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 t....
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....nciated the principle in the following way :- "The mere non-declaration of the waste/by-product in their classification list cannot establish any wilful withholding of vital information for the purpose of evasion of excise duty due on the said product. There could be, counsel contended, bona fide belief on the part of the assessee that the said waste or by-product did not attract excise duty and hence it may not have been included in their classification list. But that per se cannot go to prove that there was the intention to evade payment of duty or that the assessee was guilty of fraud, collusion, misconduct or suppression to attract the proviso to Section 11A(1) of the Act. There is considerable force in this contention." Therefore, if non-disclosure of certain items assessable to duty does not invite the wrath of the proviso, we fail to understand how the non-payment of duty on disclosed items, after inquiry from the concerned department meets, with that fate. 17. In fact, the Act contemplates a positive action which betrays a negative intention of willful default. The same was held by Easland Combines, Coimbatore v. The Collector of Central Excise, C....
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....o far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are clearly qualified by the word 'wilful' preceding the words 'misstatement or suppression of facts' which means with intent to evade duty. The next set of words 'contravention of any of the provisions of this Act or Rules' are again qualified by the immediately following words 'with intent to evade payment of duty'. It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11-A. Misstatement or suppression of fact must be wilful.' The aforesaid observations show that 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 t....
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.... appellant falls under the case of "willful misstatement" and pointed to the use of the word "misutilizing" in the following statement found in the order of the Commissioner of Customs, Raipur in furtherance of its claim : "The noticee procured 742.51 kl of furnace oil valued at Rs. 54,57,357/- without payment of customs duty by misutilizing the facility available to them under Notification No. 53/97-Cus., dated 3-6-1997" 22. We are not persuaded to agree that this observation by the Commissioner, unfounded on any material fact or evidence, points to a finding of collusion or suppression or misstatement. The use of the word "willful" introduces a mental element and hence, requires looking into the mind of the appellant by gauging its actions, which is an indication of one's state of mind. Black's Law Dictionary, Sixth Edition (pp 1599) defines "willful" in the following manner :- "Willful. Proceeding from a conscious motion of the will; voluntary; knowingly; deliberate. Intending the result which actually comes to pass... An act or omission is "willfully" done, if done voluntarily and intentionally and with the specific intent to do something the....