TaxTMI 
TaxTMI 
2026 (2) TMI 13
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....firm interest under Section 75 of the Finance Act, 1994 read with Section 142, 173 & Section 174 of the CGST Act, 2017. III. I impose penalty of Rs. 6,03,999/- (Six lakhs Three thousand Nine hundred and ninety-nine only) under Section 78 of the Finance Act, 1994 read with Section 142, 173 & Section 174 of the CGST Act, 2017 IV. I impose penalty of Rs. 10,000/- under Section 77(1)(d) of the Finance Act, 1994 read with Section 142, 173 & Section 174 of the CGST Act, 2017. V. I impose penalty of Rs. 20,000/- under Section 70 of the Finance Act, 1994 read with Rule 7C of STR, 1994 read with Section 142, 173 & Section 174 of the CGST Act 2017 as discussed above." 2.1 Appellant was registered with department vide Service Tax Registration No.ABYPT5365LST001 and engaged in providing services under the category of 'Advertising agency service and Event management service" as defined under Section 65B(44) of the Act. The said services are not covered in the Negative list under Section 66D of the Finance Act, 1994 nor exempted under Mega Exemption Notification No.25/2012-ST dated 20.06.2012. 2.2 As per the information received from the Income Tax Department....
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....d Apr-Sep FY 2014-15. f. Late fee should not be demanded and recovered from them under Section 70 of the Act read with Rule 7C of the Rules read with Section 142, 173 and 174 of CGST Act for October-March 2014-2015 ST-3 by 216 days." 2.7 The said show cause notice was adjudicated as per the Order-in-Original dated 30.10.2021 referred in para 1 above. 2.8 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been disposed of as per the impugned order. 2.9 Aggrieved appellant have filed this appeal. 3.1 When the matter was listed for hearing today Shri Akhilesh Pandey appeared and produced a letter seeking adjournment which is reproduced below:- 3.2 From the above letter, I observe that- ⮚ This letter dated 15.01.2026 is addressed to the Assistant Registrar, CESTAT Allahabad and not to the Bench before which the matter is listed. ⮚ The said letter asking for adjournment stated that Counsel is out of station and letter dated 15.01.2026 i.e. today being signed originally by the Counsel himself which clearly shows the ground stated is contrary to the facts which can be observed from the said letter. No on....
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....ettled, besides the fact that the matter in hand, which was fixed for hearing today, was well known to the Advocate, who has written the said letter, well in advance. One fails to understand what prevented the Advocate from making necessary arrangements to ensure attendance of the representative of the appellant in the Tribunal for today's hearing. His personal inability of appearing today before this Tribunal on account of his personal case at Allahabad High Court cannot be a ground for adjournment of the matter in hand. In the circumstances, request for adjournment is rejected..." In view of the decisions as above I am inclined to reject the request for adjournment made. Even otherwise I find that the matter is in very narrow compass and can be proceeded with even without the assistance of the Counsel of the appellant. 3.3 I have heard Smt Chitra Srivastava, Authorized Representative for the revenue who reiterates the findings recorded in the orders of the lower authorities. 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 Impugned order records as follows:- "On the other hand, the appe....
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....ertisements other than advertisements broadcast by radio or television" In light of above provision, I am in agreement with the plea of the appellant that selling of space or time slots for advertisements was exempted till 30.09.2014. In order to support of their claim, the appellant has also produced the photocopies of the invoices issued during the period April, 2014 to Sept, 2014 before me. Ongoing through these invoices, I find that they have been raised by the appellant for Sale of space or time slots for advertisement other than advertisements broadcast by radio or television against which the appellant had received an amount of Rs. 17,78,244/-.1 find that the appellant was not required to pay service tax on the said amount being exempted in terms of Section 66D(g) of the Finance Act, 1994, as discussed above. After deducting the said exempted value from the taxable value as mentioned in the impugned order, the appellant is liable to pay service tax amounting to Rs. 3.84,208/- inclusive of cess which I confirm under Section 73(2) of the Finance Act, 1994 read with Section 142, 173 & 174 of CGST Act, 2017 alongwith interest under Section 75 of the Act and equal amount of penal....
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.... 603999/-. Therefore, I impose penalty of Rs. 10,000/- under Section 77 (1)(d) of the Finance Act 1994. e. 1 observe that party has not filed ST-3 return for the period April 2014 -September 2014 and there is delay of 216 days in filing of return for the period Oct 14 to march 2015. Therefore, I impose penalty of Rs. 20,000/- under section 70 read with Rule 7C of Service Tax Rule, 1994." 4.5 From perusal of the above part of the order, I do not find any discussion showing that whether the act of non-payment of tax was out of deliberate ignorance etc. I find that major portion of the demand has been found not to be sustainable against the appellant. Show cause notice demanded the amount of Rs.24,28,520/-, which has been reduced to Rs.6,03,999/- by the Original Authority and by the impugned order to Rs.3,84,208/-. 4.6 I find that there is sufficient ground to hold that appellant entertained a bonafide belief that he was not required to pay service tax in respect of these receipts and accordingly he had not paid the tax even if they were actually due. Hon'ble Supreme Court in the case of Uniworth Textiles Ltd. [2013 (288) ELT 161 (SC)] has held as follows:- "21. The Rev....
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....e 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 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), t....
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....asis 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." 4.7 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; 4.8 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....
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....facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. It was observed by this Court that something positive other than mere inaction or failure on the part of the manufacturer or producer of conscious or deliberate withholding of information when the manufacturer knew otherwise, is required to be established before it is saddled with any liability beyond the period of six months. Whether in a particular set of facts and circumstances there was any 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 info....
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....e on the part of the producer or manufacturer either not to take out a licence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not, would not attract Section 11-A of the Act. In the facts and circumstances of this case, there were materials, as indicated to suggest that there was scope for confusion and the appellant believing that the goods came within the purview of the concept of handicrafts and as 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 d....
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....or wrong information furnished in the declaration itself. The Tribunal noted the facts as follows: "We observe it is not denied by the Revenue that the appellants had been submitting their classification lists from time to time showing the various products manufactured by them including those falling under T.I. 14-E and 68 also these containing alcohol. The officers who visited the factory as seen from the survey register at the factory also took note of the various products being manufactured by the 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 t....
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....is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that explanation was 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....
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....re, required to be considered in the aforementioned context. The proviso, it is trite, provides for an exception. It is not the rule. A case, therefore, has to be made out for attracting the same. 16. In Primella Sanitary Products (P) Ltd. v. CCE [(2005) 10 SCC 644 : (2005) 184 ELT 117] a three-Judge Bench of this Court was dealing with a case where a concession was made by a counsel appearing on behalf of the Revenue. The Court opined that although the item was put under the right classification list 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 approve....