TaxTMI 
TaxTMI 
2026 (2) TMI 1021
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....(ii) I confirm the demand of interest on the party at an applicable rates during the relevant period, on the amount of Service Tax demanded/confirmed at point (i) above, under the provisions of Section 75 of the Finance Act, 1994. (iii) I impose penalty of Rs.7,40,829/- upon the party, under Section 78 of the Finance Act, 1994. (iv) I impose penalty of Rs.5,000/- under Section 77(1)(d) of the Finance Act, 1994." 1.2 By the Order-in-Original No.106/AC/Div-II/Noida/ 202425, dated 12-07-2024 Adjudicating Authority has modified the Order-in-Appeal by holding as follows:- "ORDER (i) I confirm the demand of Service Tax amounting to Rs.8,39.001/-(Rupees Eight Lakh Thirty-Nine Thousand and One rupees Only) not paid/short paid by the party, on the taxable value during the period of 2015-16 2016-17 under the provisions of Section 73(1) of the Finance Act, 1994. (ii) I drop the demand of Service Tax amounting to Rs.87,755/- due to exports of services made by taxpayer during the period of 2015-16 & 2016-17 under the provisions of section 73(1) of the Finance Act, 1994. (iii) I confirm the demand of interest on the party, at an applicable rates....
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....should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994. (ii) The due interest on the amount of Service Tax mentioned at (i) above should not be demanded and recovered from them under Section 75 of the Finance Act, 1994. (iii) Penalty should not be imposed upon them under Section 78 of the Finance Act 1994, for failure to pay service tax & suppressing the facts and value of taxable service with intent to evade payment of service tax; (iv) Penalty should not be imposed upon them under section 77(1)(d) of the finance Act, 1994 for failure to pay Service Tax electronically through net banking." 2.5 The said show cause notice was adjudicated as per the Order-in-Original dated 12.07.2024 as referred in para 1.2 above. 2.6 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been modified as per the impugned order. 2.7 Aggrieved appellant have filed this appeal. 3.1 When the matter was called, it was informed that Counsel for the appellant has requested for adjournment and filed an application for virtual hearing. I find that the issue is a very narrow compass and can be conside....
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....ones, ATMs, films and television serials etc. too. The sale of space for advertisement in print media remained exempted from the levy of service tax. Thus the subject levy continued without any major changes from 01.05.2006 till 30.06.2012. From 01.07.2012, the sale of space or time for advertisement was notified in the negative list under Section 66D of Finance Act, 1994. Entry (g) of Section 66D Ibid read as 'selling of space or time for advertisements other than advertisements by broadcast by radio or television'. It is clearly evident thal for the period 01.07.2012 to 30.09.2014, selling of space or time for advertisements in internet or website are not subjected to service tax because of the entry in the negative list during such period. To summarize, period-wise taxability of the said service at different points of time as under:- S. No Period Taxable Non-Taxable 1 01.05.2006 to 30.06.2012 All Print Media 2 01.07.2012 to 30.09.2014 Television and Radio All 3 01.10.2014 to till date All Print Media Now, in the instant case, the service involved is sale of space and time for advertisement on the internet or websit....
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....2015-16 F.Y.2016-17 1 Taxable value as per SCN 53,80,397.00 9,77,320.00 2 Less: Export of services 34,069.00 5,52,099.00 3 Net taxable value 53,46,328.00 4,25,221.00 4 Service tax payable thereon (@14.5% in 2015-16 & 15% in 2016-17) 7,75,218.00 63,783.00 I find that the adjudicating authority has accordingly, in view of the above, has confirmed the total service tax liability of Rs.8,39,001.00 (2015-16 Rs.7,75,218.00 & 2016-17 Rs.63,783.00) during the relevant period. 16.2 The appellant contested that they were involved in selling of L.T. Goods on which VAT had been discharged and on the sale of goods on which VAT had been discharged, therefore the service tax cannot be levied on the same goods. 16.3 The above contention of the appellant has been examined in respect of consideration received in Form 26AS under Section 194C of the Income Tax Act. The year-wise/ party-wise details of tax deducted at source is given below :- Financial Year 2015-16: SI No Name of party to whom service was Section provided Section Amount paid as consideration 1 Quotient Four Technologies Private Limi....
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....oods. As in the relevant year there was no requirement to deduct TDs on the sale of goods. Section 1940 has been introduced in the Finance Act of 2021 to cause deduction of 0.1% of TDS on account of sale of goods. Thus claim that the Appellant has made with regard to sale of goods in the year 2015-16 and 2016-17 does not figure in the 26AS. I find no deduction can be given on this count to the Appellant from the assessed taxable value of Rs. 53,80,397.00 & Rs. 79,22,299/-in the F.Y. 2015-16 and 2016-17. A few simple electronically printed Invoices are submitted showing receipts from the sale of goods, at the bottom written sale of laptop, however no description is given in the bill. Hence this claim of the Appellant with regard to the sale of goods is largely unsubstantiated and in any case makes no difference to the taxable value as explained above for the purpose of levy of service tax. If at all there is sale of goods then its other than the sale of service of space & time on the website/internet. I find therefore that profit and loss account statement submitted by the appellant does not correctly reflect what is appearing in the 26AS in the relevant year. 17. I find th....
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.... is no dispute on that, for the second point the party has stated that they provide advertisement service through internet also known as Aerial advertising or selling space for Advertisement on internet & sell 1.T. goods. They have their own Website (namely COUPONSCULTURE.COM, PINKNET.IN) on internet by having registration on domain service provider (viz godaddy.com). The different clients/advertiser give their adds to run on their website for which they take some charges. The said activity/service falls under Negative list as per Section 66Dig) of Finance Act, 1994. Since their service attracts no service tax, they were not registered under service tax during the relevant period. They also stated that they have exported services of amount Rs.34,069/- 5,52,099/- for the financial year 2015-16 & 2016-17 respectively. In support of this, the taxpayer has submitted the copy of ITR return, invoices, P&L account, copy of 26AS form, FIRCS. In this instant case, I find that the taxpayer has provided only copies of electronic invoices, not actual invoices in support of their claim that the service provided by them falls under negative list under section 66D(g) of Finance Act, 1994....
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....find that appellant was entertained a bonafide belief that his services were falling under Negative List of services and was not required to pay any service tax. In view of the above bonafide belief he entertained the demand made by alleging suppression etc. to invoke extended period of limitation could not have been made. 4.8 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 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 men....
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.... 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 alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of fact on the part of the assessee or by reason of contravent....
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....onafide 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; 4.10 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 nonpayment or short payment of service tax is due to fraud, collusion, wilful misstatement, suppression of facts, or contravention of the provisions of the Act or Rules, with an intent to evade payment of service tax.....
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.... 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 that there was no need of taking out a licence under Rule 174 of the said Rules and also that there was no need of paying duty at the time of removal of dhoop sticks, etc. Counsel further submitted that in any event....
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....new 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 refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of the Act or of the Rules made thereunder. The Tribunal in the appellate order has, howev....
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.... 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 the appellants has to be taken to be within the knowledge of the authorities. They could have taken corrective action in time. We therefore find there was no warrant in invoking longer time-limit beyond six months av....
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....t 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 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. Infact it is the mildest expression used in the proviso. Yet the surrou....
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....o 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. When all facts are before the Department and a party in the belief that affixing of a label makes no difference does not make a declaration, then there would be no wilful misdeclaration or wilful suppression. If the....