TaxTMI 
TaxTMI 
2025 (11) TMI 507
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.... unchanged." The appeal filed by the appellant is disposed of accordingly. 2.1 Appellant was engaged in providing taxable services and was not registered with the Department as required under Section 69 of the Finance Act, 1994. 2.2 On the basis of information received from the Income Tax Department it was observed that the appellant had received consideration on account of providing "Declared Service", but they failed to pay Service Tax on the same. Accordingly, the appellant was requested to submit form ST-2, details of nature of work/services provided, ST-3 Returns, Bills/Invoice/Job-work bills issued towards services provided, Form-26-AS, Balance Sheet along with Profit & Loss account, Income Tax returns along with computation/calculation of Income, Reconciliation of amount received under different sections of income tax and other relevant documents, in order to ascertain their exact tax liability. 2.3 Appellant did not provide desired documents. In absence of cooperation from the appellant the tax liability was calculated on the basis of information provided by the Income Tax Department and it was observed that during the FY 2016-17 the appellant had received....
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.... of Rs. 7,95,569/-demand of drop (Seven Lakh Ninety Five thousand Five hundred and Sixty Nine only) including cess for the reasons discussed above. B. I order to recover interest at the appropriate rates on the aforesaid demand of Service Tax under the provisions of the Section 75 of the Finance Act, 1994, read with Section 174 of the CGST Act. 2017. C. 1 impose a penalty of Rs. 24,87,181 /(Twenty Four Lakh Eighty Seven Thousand One Hundred and Eighty One Only) under Section 78 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017, upon the party for contravention of various provisions of the Act/Rules discussed hereinabove. D. I impose penalty of Rs. 10,000/- [Rupees Ten Thousand only] each under the provisions of Section 77(1)(a), 77(1)(c), 77(1)(d) & 77(2) of the Finance Act, 1994, read with Section 174 of the CGST Act, 2017, upon the party for not furnishing information and produce the documents called by the Central Excise Officer. E. I order to recover from the party, late fee at the rate of Rs. 20,000/- [Rupees Ten Thousand only] for every return not filed during the FY 2016-17 under the provisions of Section 70 of the Finan....
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.... "S. No. 12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of (a) omitted: (b) (c) omitted: (d) canal, dam or other irrigation works; (e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or "S. No. 12A. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (ii) an art or cultural establishment; (c)....................... Under a contract which had been entered into prior to 1 March, 2015 and on which appropriate stamp duty, where appl....
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.... Line/0 6 dated 18.09.201 5 Annual Sectional Contract for supply of material and repair & Maintenance work between Jhansi Yard to Sithouli 4854900 Taxable work contract as per S. No.12A of Notfn. No.25/2012ST dated 20.09.2014 4. NCR Jhansi Division JHS/W/173 /L/78 dated 24.09.201 4 Up gradation of basic infrastructure at manned Level crossing 8974840 Exempted work contract as per S. No.14(a) of Notin. No.25/2012 dated 20.06.2012 5. NCR Jhansi Division JHS/SC/C/ Line/0 5 dated 24.09.201 4 Annual Sectional Contract for supply of material and repair & Maintenance work under JHS yard to STLI for 2014-15 4574400 Exempted work contract as per S. No.12A(i) of Notin. No.25/2012 dated 20.06.2012 6. NCR Jhansi Division JHS/SC/C/ LAR/0 5 dated 24.09.201 4 Annual Sectional Contract for supply of material and repair & Maintenance work under BIN te JHS LAR to Tikamgarh for 2014-15 5361200 Exempted work contract as per S. No. 12A(i) of Notin. No.25/2012 dated 20.06.2012 7. NCR Jhansi Division JHS/WKS/ C/LAR/039 0 dated Up gradation of basic infrastructure at 4307807 Exempted work contract as 06....
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.... service portion in the execution of a works contract, referred to in clause (h) of section 668 of the Act, shall be determined in the following manner, namely (1) Where the value has not been determined under clause (i), the person liable to pay tax on the service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely:- (A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent of the total amount charged for the works contract, Provided that where the amount charged for works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on forty percent. of the total amount charged for the works contract (B) in case of works contract, not covered under subclause (A), including works contract entered into for,- (i) maintenance or repair or reconditioning or restoration or servicing of any goods; or (ii) maintenance or repair or completion and finishing services such as glazing or plastering or floor and wall tiling or installation of electri....
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....bove examination, the taxable value and service tax liability against the appellant needs to be re-quantified for the period 2016-17 as under: S. No. Nature of payment Gross amount Taxable amount S. Tax@15% 1. Taxable (work contract) 10002205 7064543 1059681 2. Taxable (other) 1373969 1373969 206095 3. Exempted 10418825 Nil Nil Total 21884999 8438512 1265776 Thus, the appellant has been found liable for payment of service tax amounting to Rs.12,65,776/- for the period 2016-17 which they failed to deposit within the stipulated period of time limit provided under the Act. Therefore, they are also liable for payment of applicable interest under Section 75 of the Act. 4.5 I find that under self-assessment procedure prescribed under the statute, the appellant were required to assess & pay their Service Tax liability correctly, whereas the nonpayment of Service Tax could be detected only during the data received from the Central board of Indirect Taxes & Customs. The appellant had also not obtained service tax registration with the Department. Thus, I find that there was suppression of fac....
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....knowledge of the facts. 12. In view of the facts stated supra, it appears that by this action of party of not disclosing properly the services provided by them, non disclosure of taxable value in their returns [by way of not filing the due ST-3 return) under Section 70 of the Finance Act, 1904 for the material period necessary for their assessment for the aforesaid penods, the value of taxable service had escaped assessment They willfully and deliberately suppressed the gross value of taxable services rendered by them with intent to evade payment of Service Tax In the instant case, they failed to discharge their duties and responsibilities as required by them under the provisions of Finance Act, 1994 and Service Tax Rules 1994 Therefore, it appears that they had willfully not deposited the applicable service tax it also appears that they did so with intent to evade payment of service tax. Since, they have willfully suppressed the facts and contravened the various provisions of Finance Act, 1994 and the Service Tax Rules, 1994, as stated above with intent to evade payment of Service Tax. Hence, proviso to Section 73(1) of Finance Act, 1994 for invoking the extended period t....
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....nd the conclusion is that by not doing so the notice willfully suppressed the fact of rendering the said taxable services. The willfully mis-statement and suppression of facts, therefore, confirms that such contraventions were made to evade payment of service tax. Accordingly, proviso to Section 73 of the Finance Act, 1994 is correctly invoked against the notice for recovery of service e tax for the extended period. Hence, I find that it is a fit case for invocation of extended period of limitation, as provided under proviso to Section 73(1) of the Finance Act, 1994." 4.6 Neither show cause notice nor Order-in-Original or the impugned order records any finding in respect of the bonafide belief which appellant would have entertained for the reason of nature of services provided to the railways after going through all the work contracts the demand made in the show cause notice has been substantiate reduced from Rs.32,82,750/- to Rs.12,55,776/-. Number of contracts has been found to be under the category of exempted contracts, as the appellant entertained a bonafide belief with regards to his liability to pay service tax and the issue involved was in nature of interpretation. Accor....
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....ression 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] 14. In Sarabhai M. Chemicals v. Commissioner of Central Excise, Vadodara - (2005) 2 SCC 168 = 2005 (179) E.L.T. 3 (S.C.), a three-judge Bench of this Court, while referring to the observations extracted above, echoed the following views : "23. Now coming to the question of limitation, at the outset, we wish to clarify that there are two concepts which are required to be kept in mind for the purposes of deciding this case. Reopening of approvals/assessments is different from raising of demand in relation to the extended period of limitation. Under section 11A(1) of the Central Excise Act, 1944, a proper officer can reopen the approvals/assessments in cases of escapement of duty on accou....
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....tly, it does not mean any omission and the act must be deliberate and willful 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 not disclosed deliberately to escape 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.' 27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that "suppression of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intentio....
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....ent to attract the extended period of limitation." [Emphasis supplied] 18. We are in complete agreement with the principle enunciated in the above decisions, in light of the proviso to Section 11A of the Central Excise Act, 1944. However, before extending it to the Act, we would like to point out the niceties that separate the analogous provisions of the two, an issue which received the indulgence of this Court in Associated Cement Companies Ltd. v. Commissioner of Customs - (2001) 4 SCC 593, at page 619 = 2001 (128) E.L.T. 21 (S.C.) in the following words :- "53... Our attention was drawn to the cases of CCE v. Chemphar Drugs and Liniments - (1989) 2 SCC 127, Cosmic Dye Chemical v. CCE - (1995) 6 SCC 117, Padmini Products v. CCE - (1989) 4 SCC 275, T.N. Housing Board v. CCE - 1995 Supp (1) SCC 50 and CCE v. H.M.M. Ltd. (supra). In all these cases the Court was concerned with the applicability of the proviso to Section 11-A of the Central Excise Act which, like in the case of the Customs Act, contemplated the increase in the period of limitation for issuing a show-cause notice in the case of non-levy or short-levy to five years from a normal period of six....
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....ressions "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 11-A, the making of such a wilful misstatement or suppression of facts would attract the provisions of Section 28 of the Customs Act. In each of these appeals it will have to be seen as a fact whether there has been a non-levy or short-levy and whether that has been by reason of collusion or any wilful misstatement or suppression of facts by the importer or his agent or employee." [Emphasis supplied] 19. Thus, Section 28 of the Act clearly contemplates two situations, viz. inadvertent non-payment and deliberate default. The former is canvassed in the main body of Section 28 of the Act and is met with a limitation period of six months, whereas the latter, finds abode in the proviso to the section and faces a limitation period of five years. For the operation of the proviso, the intention to deliberately default is a mandatory prerequisite. 20. This Court in Aban Loyd Chiles Offshore Limited and Ors. v. Commissioner of Customs, Maharashtra - (2006) 6 SCC 482 = 2006 (200) E.L.T. 370 (....
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.... the appellant was seeking, which anybody would have found satisfactory. Only on receiving this satisfactory reply did the appellant decide to claim exemption. Even if one were to accept the argument that the Development Commissioner was perhaps not the most suitable repository of the answers to the queries that the appellant laboured under, it does not take away from the bona fide conduct of the appellant. It still reflects the fact that the appellant made efforts in pursuit of adherence to the law rather than its breach. 24. Further, we are not convinced with the finding of the Tribunal which placed the onus of providing evidence in support of bona fide conduct, by observing that "the appellants had not brought anything on record" to prove their claim of bona fide conduct, on the appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India v. Ashok Kumar & Ors. - (2005) 8 SCC 760 that "it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than prov....
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....the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the Excise Department places reliance on the proviso, it must be specifically stated in the show-cause notice which is the allegation against the assessee falling within the four corners of the said proviso...." (Emphasis supplied) 26. Hence, on account of the fact that the burden of proof of proving mala fide conduct under the proviso to Section 28 of the Act lies with the Revenue; that in furtherance of the same, no specific averments find a mention in the show cause notice which is a mandatory requirement for commencement of action under the said proviso; and that nothing on record displays a willful default on the part of the appellant, we hold that the extended period of limitation under the said provision could not be invoked against the appellant." 4.8 Hon'ble Madras High Court has in the case of Micro Chem Products (India) Pvt. Ltd. [2017 (355) E.L.T. 45 (Mad)] observed as follows: ....