TaxTMI 
TaxTMI 
2025 (11) TMI 949
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....ection 80 of the Finance Act, 1994" 2.1 The Appellant is a state government undertaking and are engaged in providing 'Management, Maintenance or Repair Services' in terms of Section 65(64) read with 65(105)(zzg), which are chargeable to Service Tax under Finance Act, 1994 and are registered with the Department. 2.2 During the course of scrutiny of records of the Appellant's it was observed that they were also providing following services for which they had neither obtained registration nor complied with any other provision of law:- (i) Commercial Coaching and Training Service in terms of Section 65(26) read with Section 65(105)(zzc) of the Finance Act, 1994. (ii) Online Information Retrieval Service in terms of Section 65(75) read with 65(105)(zh) of the Finance Act, 1994. (iii) Event Management Service in terms of Section 65(40) read with Section 65(105)(zu) of the Finance Act, 1994. (iv) Business Auxiliary Service in terms of Section 65(19) read with Section 65 (105)(zzb) of the Finance Act, 1994. (v) Franchise service in terms of Section 65(47) read with Section 65(105)(zze) of the Finance Act, 1994 (hereinafter referred to as &....
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....Total amount received S. Tax due 2006-07 12.24 38860546 4756531 2007-08 12.36 46962308 5804541 2008-09 upto 23.02.09 12.36 41006432 5068395 From 24.02.09 10.3 3738558 385071 2009-10 10.3% 46571095 4796822 Total 177138959 2,08,11,360 2.5 Alleging the Appellant who were required to self-assess the Service Tax liability and by showing incorrect value of taxable value in ST-3 Returns and failed to deposit correct Service Tax have thus willfully suppressed material information with intent to evade payment of Service Tax. 2.6 Show Cause Notice dated 13.10.2011 was issued to the Appellant asking them to show cause as to why:- 1) Service Tax total amounting to Rs. 2,08,11,3601- (Two Crore Eight Lacs Eleven Thousand Three Hundred Sixty Only) not paid by them should not be demanded and recovered from them under the proviso to the Section 73 (1) of the Finance Act, 1994. 2) Interest at appropriate rate should not be charged and recovered from them under Section 75 of Fin....
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.... impugned order records as follows for invocation of extended period of limitation: "The assessee has raised the plea of SCN being non speaking and unfounded with reason, extended period not invocable to raise demand and impose penalty non observance of provisions of S 67(2) of the Act to treat the value of tax demand as cum tax value, Proposal to impose penalty u/s 76 and 78 both simultaneously to assail the notice. The assessee has also taken plea that being a government company there could not be a mala fide intention to evade tax on their part and sought waiver of penalty under S 80 of the Act. I have considered the submission of the assessee and case law relied by them. I find that the SCN is precise and unambiguous to propose demand of tax and imposition of penalty. The SCN sustains. It is because of the audit and its follow up by the Superintendent vide letters dated 17.6.11 and 05.07.11 that the evasion of tax was detected. The assessee has failed to disclose the taxable value and activity in their ST3 returns. There is suppression of fact on their part and extended period has rightly been invoked to demand service tax. The assessee also ....
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....06 31.03.2007 25.04.2007 17.04.2007 01.04.2007 30.09.2007 25.10.2007 10.10.2007 01.10.2007 31.03.2008 25.04.2008 22.04.2008 01.04.2008 30.09.2008 25.10.2008 23.10.2008 01.10.2008 31.03.2009 25.04.2009 20.04.2009 01.04.2009 30.09.2009 25.10.2009 22.10.2009 01.10.2009 31.03.2010 25.04.2010 23.04.2010 Thus the show cause notice without invoking the extended period of limitation could have been issued in the present case within one year from the date of filing the ST-3 return. We find that as the show cause notice has been issued on 13.10.2011 the same has been issued beyond normal period of limitation as provided by the Section 73 of the Finance Act, 1994. 4.4 We do not find any reason being recorded to show that the Appellant had willfully suppressed or mis-declared with regards to the taxable services provided by them with intent to evade payment of taxes. It is also evident that taking note of the fact that the Appellant is a Uttar Pradesh Government unde....
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.... being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression 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 ....
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....the observations made in Pushpam Pharmaceuticals Company (supra), this Court clarified the requirements of the proviso to Section 11-A, as follows :- "26... This Court in the case of Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay (supra), while dealing with the meaning of the expression "suppression of facts" in proviso to Section 11A of the Act held that the term must be construed strictly, 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. Whe....
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.... paid or erroneously refunded because of either fraud, collusion, wilful misstatement, suppression of facts or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or willful misstatement or suppression of fact or contravention of any provision is not sufficient 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....
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.... duty" occurring in proviso to Section 11-A 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 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 nonlevy 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....
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....in favour of the appellant. The appellant laboured under the very doubt which forms the basis of the issue before us and hence, decided to address it to the concerned authority, the Development Commissioner, thus, in a sense offering its activities to assessment. The Development Commissioner answered in favour of the appellant and in its reply, even quoted a letter by the Ministry of Commerce in favour of an exemption 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 bon....