AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 1522
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....19-12-2023 adjudicating authority has held has follows:- "ORDER "i) I confirm and order to recover Service Tax of Rs 1035930/- (Rs. Ten Lakh Thirty Five Thousand Nine Hundred and Thirty only) on M/s Protectwell Security Services, 27B, Dhawalgiri Apartment, Sector 11, Noida 201301 under Section 73(1) of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017 in relation to SCN No.486/AC/ST/Div-IV/Noida/2021 dated 21.10.2021. ii) I order to charge and recover interest on the amount as confirmed at, (i) above, as applicable under Section 75 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017 from the due date of payment of Service Tax till the actual date of payment: iii) I impose a penalty of Rs 1035930/- (Rs. Ten Lakh Thirty Five Thousand Nine Hundred and Thirty only) on M/s Protectwell Security Services, 27B, Dhawalgiri Apartment, Sector 11, Noida 201301 under Section 78 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act. 2017: iv) In terms of second proviso to Section 78 of the Finance Act, 1994, the taxpayer will have....
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....-17 15% 6,906,201 1,035,930 2.5 If the Department not received the information from the Income Tax department, about the said receipts, the nonpayment of service tax could not be unearthed. Thus the appellant had willfully suppressed their taxable value from the department with intent to evade payment of Service Tax. As the appellant has suppressed the material facts and contravened the provisions of the Finance Act, 1994 and the Rules of the Service Tax Rules, 1994 with intent to evade payment of Service Tax, extended period of limitation of five years is applicable as per the proviso to Section 73(1) of the Finance Act, 1994. 2.6 Thus appellant has contravened the provisions of the Finance Act, 1994 and Service Tax Rules, 1994, deliberately with the intent to evade the payment of the Service Tax in as much as: (i) Section 67 and Section 68 of the Finance Act, 1994 read with Rule 6 of the Service Tax Rules, 1994 in as much as they failed to pay appropriate Service Tax on the basis of gross amount received by them from their service recipients during the period. (ii) Failed to maintain the proper records for the period 2016-17 and not providing the ....
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.... That the appellant is in the business of supply of manpower. 6.2 That the appellant was completely unaware that he was carrying 3 Service Tax Registration numbers: a. AKCPG1021HSD001 b. AKCPG1021HSD002 c. AKCPG1021HSD003 6.3 That the appellant was using the Service Tax Registration No. AKCPG1021HSD003 only whereas the other two registration numbers appear to have been allotted due to some technical issues existing the then on the respective Service Tax portal. 6.4 That duplicate/same show cause notices were issued in relation to each of the aforementioned Service Tax Registration Numbers as follows: a. AKCPG1021HSD001: SCN No.: 482/AC/ST/Div-IV/Noida/2021, Dated: 21.10.2021 b. AKCPG1021HSD002: SCN No.: 483/AC/ST/Div-IV/Noida/2021, Dated: 21.10.2021 c. AKCPG1021HSD003: SCN No.: 486/AC/ST/Div-IV/Noida/2021, Dated: 21.10.2021 6.5 That it has been alleged by the proper officer in his Order-in-Original No. 155/AC/ST-TPI/CGST/DIVIV/NODA/2023-24 Dated: 19/12/2023 that the said SCNs dated 21.10.2021 were issued to the appellant directing him to make a submission within 30 days and that the appellant ....
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....h not entirely by the appellant as a service provider but also by the service recipients, it will not be possible to sustain the demands. 6.8 That in the circumstances and the facts stated above, Order-in-Original No. 155/AC/ST-TPI/CGST/DIV-IV/ NOIDA/ 2023-24, Dated: 19/12/2023 in as much as it pertains to SCN No.: 486/AC/ST/Div-IV/Noida/2021 Dated: 21.10.2021 passed by the Proper Officer is a nonspeaking order, which is not justified and deserves to be quashed. 6.9 That the demand order is bad in law as it is issued beyond the statutory time limit prescribed under section 73(1) of the Finance Act, 1994. 6.10 That the last date for issuance of notice u/s 73(1) is 30 months from the relevant date. The notices and orders in this case are issued after the due date prescribed under section 73(1) of the Finance Act, 1994. 6.11 That the demand order has been passed without the application of mind, ignoring the facts on record and in a mechanical manner. 6.12 That the due process of law was not followed for the adjudication of demand u/s 69 read with Rule 4, Section 70 read with Rule 7 and Section 68 read with Rule 6 of the Finance Act, 1994 in....
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....t has submitted following documents which are incomplete and illegible also- 10.1 Copy of Notification No.30/2012-Service Tax, dated 20-06-2012 10.2 Copy of Notification No. 07/2015-Service Tax, dated 01-03-2015 10.3 ST-3 return for the period from April'16 Sept. 16 (incomplete) 10.4 An illegible table and half printed table showing therein certain bill no., value of services and service tax amount etc. said to be "reverse service tax on security charges" 10.5 E-payment challan, dt. 25-04-2017 for an amount of Rs. 1,05,122/- 10.6 Few Certificates issued by some parties regarding payment made to confirm that service of to the appellant but nothing. manpower/ security guards is provided to them only, like no bank records of receipts from the said clients. Also whether service provided is detective work or manpower supply. 10.7 11 nos. of Challans for payment of Service Tax totally amounting to Rs.87,664/- by the appellant. On examination of the ST-3 Return for the period from April'16 -Sept. '16, I observe that the appellant has submitted few non-continuous sheets of the said Service Tax Return and fu....
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....impugned order." 4.5 I find that appellant is a service provider providing manpower supply/security services. Service tax in respect of these services as per Notification No.30/2012 as amended by Notification No. 07/2015 dated 01.03.2015 is to be paid by the recipient of the services and not the service provider. Appellant by in his ground of appeal before Commissioner (Appeals) specifically taken this point and he also produced certain documents as per which he claimed that the service tax was to be deposited by the serve recipient and who has duly deposited the same. 4.6 In case of reverse charge mechanism, law is very categorically clear and it is in cases where service tax is to be paid by the service recipient and liable to pay service tax by the service recipient is completely distinct from the liability of service provider to pay service tax. Reference is made to the education guide reproduced below:- "10.1 Partial Reverse Charge With effect from 1.7.2012 a new scheme of taxation is being brought into effect whereby the liability of payment of service tax shall be both on the service provider and the service recipient. Usually such liability is affixe....
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....e appellant to entertain bonafide belief that he was not required to pay any tax in respect of the consideration received for the provision of taxable services on which service tax was to be discharged by service recipient on reverse charge. That being so the demand made against the appellant by invoking extended period of limitation could not have been sustained. Appellant had specifically taken ground to this effect in their appeal before Commissioner (Appeals) and Commissioner (Appeals) failed to record any finding in this regard. 4.9 Hon'ble Supreme Court in the case of Uniworth Textiles Ltd. [2013 (288) ELT 161 (SC)] has held as follows:- "21. The Revenue contended that of the three categories, the conduct of the 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 pe....
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.... 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 proved, and the very seriousness of such allegations demand proof of a high order of credibility." 25. Moreover, this Court, through a catena of decisions, has held that the proviso to Section 28 of the Act finds application only when specific and explicit averments challenging the fides of the conduct of the assessee are made in the show cause notice, a requirement that the show cause notice in the present case fails to meet. In Aban Loyd Chiles Offshore Limited and Ors. (supra), this Court made the following observations : "21. This Court while interpreting Section 11-A of the Central Excise Act in Collector of Central Excise v. H.M.M. Ltd. (supra) has observed that in order to attract the proviso to Section 11-A(1) it must be shown that the excise duty escaped by reason of fraud, collusion or willful misstatement of suppression of fact with intent to evade the payment of duty. It has been observed : '...Therefore, in order to attract the proviso to Section 11A(1) it must be a....
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....uld not be invoked against the appellant." 4.10 In the following decisions also it has been held that extended period of limitation could not have been invoked for making the demand when the person entertained a bonafide belief about non taxable nature or exempted nature of the services provided. ⮚ Anand Nishikawa Co. Ltd. Vs CCE, Meerut 2025 (188) ELT 149; ⮚ Infinity Infotech Parks Ltd. Vs UOI 2014 (36) STR 37; ⮚ CCE, Chennai Vs Chennai Petroleum Corporation Ltd. 2007 (211) ELT 193; 4.11 I observe that Hon'ble Supreme Court has in the case of Stemcyte India Therapeutics Pvt. Ltd [Order dated 14.07.2025 Civil Appeal Nos. 3816-3817 of 2025] observed as follows: "9. In the present case, the disputed period is from 01.07.2012 to 16.02.2014. However, the show cause notice was issued only on 28.07.2017, demanding a sum of Rs.2,07,29,576/- towards service tax, by invoking the extended period of limitation. Under section 73(1) of the Finance Act, 1994, a show cause notice must ordinarily be issued within one year from the relevant date. The proviso to section 73(1) allows an extended period of up to five years only where the n....
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....fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal, however, had held contrary to the contention of the appellant. The Tribunal noted that dhoop sticks are different products from agarbatis even though they belonged to the same category and the Tribunal was of the view that these were to be treated differently. Therefore, the clarification given in the context of the agarbatis could not be applicable to dhoop sticks etc. and the Tribunal came to the conclusion that inasmuch as the appellant had manufactured the goods without informing the central excise authorities and had been removing these without payment of duty, these would have to be taken to attract the mischief of the provisions of Rule 9(2) and the longer period of limitation was available. But the Tribunal reduced the penalty. Counsel for the appellant contended before us that in view of the trade notices which were referred to by the Tribunal, there is scope for believing that agarbatis were entitled to exemption and if that is so, then there is enough scope for believing....
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.... such were exempt. If there was scope for such a belief or opinion, then failure either to take out a licence or to pay duty on that behalf, when there was no contrary evidence that the producer or the manufacturer knew these were excisable or required to be licensed, would not attract the penal provisions of Section 11-A of the Act. If the facts are otherwise, then the position would be different. It is true that the Tribunal has come to a conclusion that there was failure in terms of Section 11-A of the Act. Section 35-L of the Act, inter alia, provides that an appeal shall lie to this Court from any order passed by the appellate tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purpose of assessment. Therefore, in this appeal, we have to examine the correctness of the decision of the Tribunal. For the reasons indicated above, the Tribunal was in error in applying the provisions of Section 11-A of the Act. There were no materials from which it could be inferred or established that the duty of excise had not been levied or paid or short-levied or short-paid or erroneously refunde....
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....e appellants. It cannot be said that the appellants had held back any information in regard to the range and the nature of the goods manufactured by them. The appellants have maintained that the value of the exempted goods under T.I. 68 and also value of medicines containing alcohol, according to their interpretation, were not required to be included for the purpose of reckoning of the total excisable goods cleared by them. There is nothing on record to show that the appellants non-bonafidely held back information about the total value of the goods cleared by them with a view to evade payment of duty. Their explanation that it was only on the basis of their interpretation that the value of the exempted goods were not required to be included that they did not include the value of the exempted goods which they manufactured at the relevant time and falling under T.I. 68 is acceptable in the facts of that case. The departmental authorities were in full knowledge of the facts about manufacture of all the goods manufactured by them when the declaration was filed by the appellants. That they did not include the value of the product other than those falling under T.I. 14-E manufactured by ....
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.... plausible, and also noted that the department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling under T.I. 14-E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence." (iii) Pushpam Pharmaceuticals Co. v. CCE [1995 Supp (3) SCC 462] "4. Section 11-A empowers the Department to reopen proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it 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 indi....
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....t but they had not been permitted to take a different stand stating: (SCC p. 648, para 13) "As the matter of classification has proceeded on a matter of concession of facts we do not allow the appellants to withdraw from that concession. They are now not permitted to argue on the question of classification." 17. In Pahwa Chemicals (P) Ltd. v. CCE [(2005) 189 ELT 257] this Court held: "The appellants have all along claimed that merely because they were affixing the label of a foreign party, they did not lose the benefit of Notification No. 175/86-CE as amended by Notification No. 1/93-CE The view taken by the appellants had, in some cases, been approved by the Tribunal which had held that mere use of the name of a foreign party did not disentitle a party from getting benefit of the notifications. It is only after larger Bench held in Namtech Systems Ltd. v. CCE [(2000) 115 ELT 238 (cegat)] that the position has become clear. It is settled law that mere failure to declare does not amount to wilful misdeclaration or wilful suppression. There must be some positive act on the part of the party to establish either wilful mis-declaration or wilful suppression. W....