TaxTMI 
TaxTMI 
2026 (2) TMI 1277
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....held:- "ORDER i. I Confirm the demand of Service Tax amounting to Rs.16.21.145/-(Rupees Sixteen Lacs Twenty One Thousand One Hundred Forty Five Only) not paid short paid by the party, on the taxable value during the period of 2016-17 under the provisions of Section 73(1) of the Finance Act, 1994. 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 (1) above, under the provisions of Section 75 of the Finance Act, 1994. iii. I impose the penalty of Rs. 16.21,1457-(Rupees Sixteen Lacs Twenty One Thousand One Hundred Forty Five Only upon the party under Section 78 of the Finance Act, 1994. If the amount as determined under Section 73 above is paid within 30 days from the date of receipt of the order along with the interest payable thereon as per Section 75, penalty will be only 25% of the service tax determined under Section 73. The benefit of reduced penalty shall be available only if the amount of penalty so determined has also been paid within the period of 30 days from the receipt of the order. iv. I impose penalty of Rs. 10,000/- under S....
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....referred in para 1.2 above. 2.7 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed as per the impugned order. 2.8 Aggrieved appellant have filed this appeal. 3.1 When the matter was called, a letter, requesting for virtual hearing has been received. However, I find that the issue involved is a very narrow compass and can be considered even in absence of the Counsel. 3.2 I have heard Shri Manish Raj learned Authorized Representative appearing for the revenue, he 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 I observe that appellant has before the Commissioner (Appeals) and also before the Original Authority taken the grounds with regards to invocation of extended period of limitation for making this demand. The relevant grounds as recorded in the impugned order are reproduced below:- "3.5 That extended period of limitation is not invokable. (i) The Learned Deputy Commissioner has confirmed the demand of service tax for the FY 2016-17, for which the Show Cause....
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....d that extended period of limitation cannot be invoked in cases when demand is raised on the basis of difference between ST-3 returns and Balance Sheets as there is neither suppression of facts nor intention to evade payment of tax. (xxv) It is submitted that if the values are reflected in the Balance Sheet and since the balance sheet is a public document, any difference in values of Balance Sheet and ST-3 return cannot be said to be suppression on the part of assesses. Reliance in this connection can be placed on the decision of Hon'ble Allahabad CESTAT in the matter of M/s Swarn Cars Pvt. Ltd. Vs. Commissioner of Central Excise, Kanpur reported at 2020-TIOL-229. (xxvi) In view of above, it is submitted that the entire demand of service tax pertains to period beyond normal period of demand therefore, entire demand of service tax is liable to be dropped on this ground alone." 4.4 Impugned order records the following findings:- "6.4 At the outset, it is stated that Show Cause Notice has been issued based on third party information supplied by the Income Tax Department. I observe that the appellant under the name & title of M/s Subodh Kumar Yadav was a p....
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....is any provisional figure could be reported in 2016-17 by the appellant & their chartered accountant. I don't see that they revised their finalized balance sheet of 2016-17 ever, where income figure of Rs. 1,92,99,951/is reported. They themselves claimed that they were running an educational institution. From the perusal of the documents submitted on 19/10/24, it can be seen that there are more than one revenue stream. From the bank statements, it can be seen that there are more deposits than reported in the ST-3 and GST Returns. in view of the shifting claims made by the appellant, the certainty of facts & truthfulness of the data is not established. 6.6 The law relating to the Burden of Proof and Its onus is given under the provisions of the Indian Evidence Act, 1872 in Chapter Vil, Part-III. Under the Indian Law, until and unless an exception is created by law, the burden of proof lies on the person making any claim or ascertaining any fact. In this context reliance is placed on the decision of Hon'ble Supreme Court of India in case of Ultratech Cement Ltd. vs. State of Rajasthan (MANU/SC/0530/2020) wherein it was held that: "the burden of proving appli....
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....e value to escape from proper assessment and payment of due service tax. Therefore, I hold that the service tax of Rs. 1,35,424/-not paid/short paid for the period from 2015-16 is required to be recovered along with interest from them under the proviso to Section 73(1) of the Finance Act, 1994 read with Section 75 of Finance Act.1994 by invoking extended period of five years. The party's contention in this regards is not acceptable as is clearly evident that the party have deliberately suppressed the true and correct taxable value by not declaring the same in ST-3 returns and payment of due service tax thereon." 4.6 It is a fact on record that the appellant was filing ST-3 returns as required in law after making self assessment of the tax. They were also filing ITRs with the Income Tax Department. From form 26AS of the appellant it is also evident that the value of services against which TDS was deducted was about Rs.89,19,702/- against the value of Rs.84,92,317/- reflected in ST-3 return. I observe that the entire demand has been made by taking the deference of ITR and STR as their difference was higher without specifying the nature of services against which these demands a....
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....elopment 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 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....
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.... "...There is considerable force in this contention. If the department proposes to invoke the proviso to Section 11A(1), the show-cause notice must put the assessee to notice which of the various commissions or omissions stated in 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 exten....
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....ollowing judgments: (i) Padmini Products v. CCE [(1989) 4 SCC 275] "12. Shri V. Lakshmi Kumaran, learned counsel for the appellant drew our attention to the observations of this Court in CCE v. Chemphar Drugs and Liniments, Hyderabad [(1989) 2 SCC 127 : 1989 SCC (Tax) 245] where at p. 131 of the report, this Court observed that in order to sustain an order of the Tribunal beyond a period of six months and up to a period of five years in view of the proviso to subsection (1) of Section 11-A of the Act, it had to be established that the duty of excise had not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of 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 parti....
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....the legal consequences of a certain provision. Shri Ganguly, appearing for the Revenue, contended before us that the appellant should have taken out a licence under Rule 174 of the said Rules because all the goods were not handicrafts and as such were not exempted under Notification No. 55 of 1975 and therefore, the appellant were obliged to take out a licence. The failure to take out the licence and thereafter to take the goods out of the factory gate without payment of duty was itself sufficient, according to Shri Ganguly, to infer that the appellant came within the mischief of Section 11-A of the Act. We are unable to accept this position canvassed on behalf of the Revenue. As mentioned hereinbefore, mere failure or negligence 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 with....
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....ase was that the demand for duty for the period beyond six months was time-barred; and the respondent's case was that the demand for the period beyond 6 months from the receipt of show-cause notice, was time-barred inasmuch as there was no suppression or misstatement of facts by the appellant with a view to evade payment of duty. In support of its claim the respondent produced classification list approved by the authorities during the period 1978-79, and also produced extracts from the survey register showing that the officers had been visiting its factory from time to time and also taking note of the previous goods manufactured by the respondent. The plea of the Revenue was that there was suppression and/or mis-declaration and/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 no....
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.... not been levied or paid or short levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before (sic 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 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 re....
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.... singled out. 13. This Court decided Bakelite Hylam Ltd. [(1997) 10 SCC 350] on 10-3-1997. The impugned notice was issued only on 9-12-1997 evidently relying on or on the basis thereof. 14. It is not a case where the respondents had not disclosed the activities of manufacturing products carried out by them by declaration or otherwise. They responded to each and every query of the appellant, as and when called upon to do so. The authorities of the appellant must have verified the said disclosures. At least they are expected to do so. The disclosure made by the respondent was acceptable to them. Their bona fides were never questioned. 15. The applicability of the extended period of limitation is, therefore, 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....