TaxTMI 
TaxTMI 
2026 (2) TMI 1340
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....paying service tax on royalty/ license fees paid to the government of Uttar Pradesh, an investigation was initiated against the appellant. 2.2 It was observed that UP Government through its Directorate of Geology & Mining, U.P. inter-alia engaged in exploration of base metals & high value minerals, monitoring of collection of royalty, providing technical know-how, basic facility to the entrepreneurs and assistance in maintain quality control at the operating mines, provided the services of rights to use natural resources to the licensees and in lieu of that, the said licensees are paying Royalty to the Government of Uttar Pradesh. 2.3 In terms of Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957, the holder of mining lease shall pay royalty in respect of any mineral removed/consumed. 2.4 The right to use the natural resources falls squarely within the definition of taxable services as provided under Section 65B of the Finance Act, 1994, as amended. In terms of amended Notification No. 25/2012-Service Tax dated 20.06.2012 through Notification No. 22/2016-Service Tax dated 13.04.2016 read with Circular No.192/02/2016-Service Tax dated 13.04.2016, any....
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....of the Rules ibid. (v) Penalty should not be imposed upon them under Section 77(2) of the Finance Act, 1994 for violation of Section 70 of the Finance Act, 1994 read with Rule 7 of Service Tax Rules, 1994 by not filing the ST-3 Returns to the department." 2.8 The said show cause notice was adjudicated as per the Order-in-Original No.302-ST/2023 dated 24.02.2023 holding as follows:- "ORDER (i) I, hereby, confirm the Service Tax demand of Rs.138600/- (Rupees One lakh thirty-eight thousand six hundred only) against Ravi Kumar Agrawal, S/o Late Shri Vijay Kumar Agrawal, Hamid Nagar, Purab Mahal, Roertsganj Sonebhadra-231216(U.P.), under section 73(2) read with section 73(1) of the Finance Act, 1994. (ii) I, Order to pay due interest at appropriate rate on the confirmed tax amount as referred at (i) above, under Section 75 of the Act, ibid. (iii) I impose a penalty of Rs. 138600/- upon the party under the provisions of Section 78 of the Act. However, the party has an option to pay 25% of the penalty payable as discussed at para 6.13 above. (iv) A penalty of Rs.10,000/- is imposed upon the party under the provisions of Section 77(1) of t....
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....ation for a taxable service under the Finance Act, 1994. There is: ○ No contractual service ○ No commercial activity ○ No identifiable taxable service Therefore, the very foundation of the demand is incorrect. ⮚ Essential Ingredients of Taxable Service Absent For levy of Service Tax, the Department must establish: ○ Existence of a service ○ Service provider ○ Service recipient ○ Consideration ○ Charging provision In the present case, royalty is regulatory in nature and not a service. ⮚ Extended Limitation Not Invokable There is no finding of willful suppression or intent to evade. The Hon'ble Supreme Court in: ○ CCE v. Chemiphar Drugs & Liniments has held that suppression must be deliberate and intentional. Mere non-registration or difference of interpretation does not amount to suppression. Hence, extended period and penalty under Section 78 are unsustainable. 3.3 Authorized Representative reiterates the findings recorded in the o....
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....d not take any action. Thereafter the appellant engaged another counsel who filed the appeal. 5.4 I find that the delay on the part of the appellant is due to his own counsel. Further in terms of proviso of) section 85(3A) of the Act, the First Appellate Authority is empowered to condone the delay 'only upto one month. As such the appeal filed by the appellant is hit by period of limitation. 5.5 Also with regard to the merits of the case I note that there is no dispute in as much as the appellant has provided mining services to the government of UP against which they have paid fees in the nature of royalty. As per the terms of Notification No. 25/2012-ST dated 20.06.2012 read with Notification No. 22/2016-ST dated 13.04.2016 and Circular No. 192/02/2016-ST dated 13.04.2016 the activity of assignment to rights to use natural resources is treated as taxable service and the licensee is required to pay service tax on the amount of consideration paid in the form of royalty or any other form under reverse charge mechanism. The same has been clarified by the CBEC through Circular No. 192/02/2016-ST dated 13.04.2016 which states that- Any activity undertaken ....
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....se. From the above, it is clear that the services received by the applicant are squarely covered under taxable service in terms of amendment made in Notification No. 25/2012- Service Tax dated 20.06.2012 through Notification No. 22/2016- Service Tax dated 13.04.2016 read with Circular No. 192/02/2016-Service Tax dated 13.04.2016. 5.10 That appellant has also contended that taxable value considered by the department is below threshold limit hence the appellant is entitled for SSI Exemption. However, I find that the appellant have not submitted proper and adequate documents to examine the fulfillment of conditions prescribed in Notification No. 33/2012-St dated 20.06.2012. They have stated to have eligible for SSI Exemption without the support of any documentary evidence. Hence, the benefit of threshold exemption cannot be extended to the appellant." 4.3 On perusal of the above order, I find that the appeal has been not only dismissed on the ground of limitation and also on merits by the First Appellate Authority. It is also evidence that before dismissing the appeal, appellant was heard. In para 4.1 following has been recorded:- "4.1 The opportunity of personal ....
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....sioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone. 4.6 This issue is squarely covered by the decision of Hon'ble Supreme Court in the case of M/s Singh Enterprises [2008 (221) E.L.T. 163 (SC)], wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him, relevant part of the said decision are reproduced bellow for ready reference:- "6. At this juncture, it is relevant to take note of Section 35 of the Act which reads as follows : "35. Appeals to Commissioner (Appeals). - (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) [hereafter in this Chapter referred to as the Commissioner (Appeals)] within sixty days from the date of the communication to him of such decision or order : Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the....
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....is an expression which is found in various statutes. It essentially means as adequate or enough. There cannot be any straitjacket formula for accepting or rejecting the explanation furnished for delay caused in taking steps. In the instant case, the explanation offered for the abnormal delay of nearly 20 months is that the appellant concern was practically closed after 1998 and it was only opened for some short period. From the application for condonation of delay, it appears that the appellant has categorically accepted that on receipt of order the same was immediately handed over to the consultant for filing an appeal. If that is so, the plea that because of lack of experience in business there was delay does not stand to be reason. I.T.C.'s case (supra) was rendered taking note of the peculiar background facts of the case. In that case there was no law declared by this Court that even though the Statute prescribed a particular period of limitation, this Court can direct condonation. That would render a specific provision providing for limitation rather otiose. In any event, the causes shown for condonation have no acceptable value. In that view of the matter, the appeal deserves....
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.... 225, interpreted the word 'any' in Rule 10 of Bengal Chamber of Commerce, Rules of the Tribunal of Arbitration. Construing the said rule, the learned Judge held that the word 'any' in Rule 10 means one or more out of several and includes all and while doing so the learned Judge relied on an old decision of the Calcutta High court in the case of Jokhiram Kaya v. Ganshamdas Kedarnath, AIR 1921 Cal. 244 at page 246. This Court is in respectful agreement with the aforesaid view of the learned Judge. 28. In Black's Law Dictionary the word 'any' has been explained as having a 'diversity of meaning' and may be "employed to indicate all and every as well as some or one and its meaning in a given Statute depends upon the context and subject matter of Statute". The aforesaid meaning given to the word 'any' has been accepted by this Court in Lucknow Development Authority v. M.K. Gupta [(AIR) 1994 SC 787]. While construing the expression "service of any description" under Section 2(o) of Consumer Protection Act, 1986 this Court held that the meaning of the word 'any' depends upon the context and the subject matter of the Statute and held that the word 'any' in Section 2(o) has been u....
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....er different Statutes, this Court wants to underline that the right of appeal, being always a creature of a Statute, its nature, ambit and width has to be determined from the Statute itself. When the language of the Statute regarding the nature of the order from which right of appeal has been conferred is clear, no statutory interpretation is warranted either to widen or restrict the same." 4.8 Further, I find that in a similar situation where a person claimed condonation of delay for the reason that the appeal which writ petition was filed wrongly before Hon'ble Delhi High Court instead of Hon'ble Allahabad High Court, Hon'ble Allahabad High Court in the case of Mr. Neeraj Jhanji Vs CC & CCE 2013 (296) ELT 310 (All.) have held as follows:- "12. It is further submitted by Shri Kesarwani that although the Delhi High Court permitted the appellant to withdraw the appeal on 5-1-2012, the appeal was filed with a further delay of about 20 days on 25-1-2012. The appeal is reported to be delayed by 1 year and 332 days for which the appellant is not entitled to take benefit of Section 14 of the Limitation Act. Shri Kesarwani submits that the appellant was not bonafidely pursuing....
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....jurisdictional High Court. The liberty was granted with an observation that the appellant in the present case had bonafidely filed the appeal in this Court and has been pressing the same as the Tribunal is located in Delhi. 14.We do not find that the Delhi High Court after entertaining the writ petition and giving liberty to convert it into appeal and granting interim order on the same day, and thereafter noticing the preliminary objections on 22nd September, 2010, had any occasion to recommend that the appellant was bonafidely pursuing the appeal in Delhi High Court. After having held that the Delhi High Court did not have territorial jurisdiction, as in accordance with the Suresh Desai and Associates (supra) and Ambica Industries (supra), it should have refrained to make any observations in favour of the appellant. 15.In Rabindra Nath Samuel Dawson v. Sivakasi & Ors. - (1973) 3 SCC 381 the Supreme Court held that where the objection to maintain the previous suit was taken at the very initial stage, benefit of Section 14 of the Limitation Act is not available to the person. 16. In Consolidated Engineering Enterprises v. Principal Secretary, Irrigation De....
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.... in the wrong court in consequence of bona fide mistake or law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded." (Emphasis supplied) 17.The predominant judicial opinion on the interpretation of Section 14 of the Limitation Act is that though the benefit has to be granted if all the conditions given in para 21 are satisfied, the bar of limitation should not affect a person, who was honestly doing his best to get his case tried on merits but failed because the Court was unable to give him such a trial. The Court will condone the delay, if the litigious activity was bona fide, as the equity underline Section 14 should be applied to its fullest extent. The position, however, would be otherwise, where a person is not bonafidely pursuing the remedy in the wrong Court. In this case the appellant assisted and advised by the counsels expert in the subject first filed a writ petition, which he requested to be converted into appeal. He was granted an interim ....
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....ct, they did not take any step to withdraw the same and continued with the proceedings which was void ab initio and without jurisdiction and also obtained an order in their favour. Even before the High Court, where the impugned order was passed the appellants did not appear on the date of arguments or even on the previous dates. Absence of due diligence in pursuing the matter is writ large on the face of the records. Suit of 1983 was decreed ex parte in the year 1988 and thereafter the proceeding for setting aside the ex parte decree is being dragged on one way or the other by filing application/appeal and is dragging the matter till date." (emphasis supplied) 20.In Ketan V. Parekh v. Special Director, Directorate of Enforcement - 2012 (275) E.L.T. 3 (S.C.) = 2012 (28) S.T.R. 195 (S.C.) the Supreme Court held in Paras 21 to 25 as follows :- The aforesaid three judgments do support the argument of "21. Shri Ranjit Kumar that even though Section 5 of the Limitation Act cannot be invoked for condonation of delay in filing an appeal under the Act because that would tantamount to amendment of the legislative mandate by which special period of limitation has be....
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....e 10 of the Adjudicating Proceedings and Appeal, 2000 for Dispensation. In the said Writ proceedings Hon'ble High Court of Delhi had passed an order on 26th July 2010. Vide the said order dated 26th July, 2010, while relying on the judgment of the Hon'ble Supreme Court, it was held by the Hon'ble Delhi High Court that even an order passed by the Appellate Tribunal in an application seeking dispensation of pre-deposit of the penalty would be appealable under Section 35 of the FEMA and that remedy under Article 226 is not available against such an order. Further, Hon'ble Delhi High Court also held that the present petition cannot be entertained by this Court. It is, however, open to the Appellant's to avail of the appropriate remedy in terms of para 45 of the above judgment of the Supreme Court. Hence, pursuant to the said 3.3 order passed by Hon'ble Delhi High Court the Appellant above named prefers an appeal before this Hon'ble Bombay High Court. Under the said circumstances the Appellant most humbly prays 3.4 that this Hon'ble Court may be pleased to condone the delay. It is submitted that the delay, in filing of the present 3.5 Appeal has not p....
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....07 that the writ petition may be converted into an appeal and considered on merits is a clear indication of the appellant's unwillingness to avail remedy before the High Court, i.e. the Bombay High Court which had the exclusive jurisdiction to entertain an appeal under Section 35 of the Act. It is not possible to believe that as on 7-11-2007, the appellants and their Advocates were not aware of the judgment of this Court in Ambica Industries v. Commissioner of Central Excise - 2007 (6) SCC 769 whereby dismissal of the writ petition by the Delhi High Court on the ground of lack of territorial jurisdiction was confirmed and it was observed that the parties cannot be allowed to indulge in forum shopping. It has not at all surprised us that after having made a prayer that the writ petitions filed by them be treated as appeals under Section 35, two of the appellants filed applications for recall of that order. No doubt, the learned Single Judge accepted their prayer and the Division Bench confirmed the order of the learned Single Judge but the manner in which the appellants prosecuted the writ petitions before the Delhi High Court leaves no room for doubt that they had done so with the ....
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....elief that it had jurisdiction to hear the appeal and that the appellant was pursuing the remedies in wrong court with due diligence. The appellant, thereafter, caused a further delay of 20 days in filing this appeal, which he has not explained. 22.For the aforesaid reasons, we are of the opinion that the appellant is not entitled to the benefit of Section 14 of the Limitation Act. This appeal is barred by limitation by 697 days, which has not been sufficiently explained by the appellant." While upholding this order of Hon'ble Allahabad High Court, Hon'ble Supreme Court reported as 2014 (308) ELT 3 (SC) has recorded as follows:- "5. The very filing of writ petition by the petitioner in Delhi High Court against the order-in-original passed by the Commissioner of Customs, Kanpur indicates that the petitioner took chance in approaching the High Court at Delhi which had no territorial jurisdiction in the matter. We are satisfied that filing of the writ petition or for that appeal before Delhi High Court was not at all bona fide. We are in agreement with the observations made by the Allahabad High Court in the impugned order. The Allahabad High Court has rightly dis....
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....ation explicitly prescribed under Section 31 of the 2005 Act. That would render the legislative scheme and intention behind the stated provision otiose. 16. The respondent had relied on the decision of this Court in K.S. Rashid & Son v. The Income Tax Investigation Commission [AIR 1954 SC 207]. This decision of the Constitution Bench, no doubt, deals with the extent of power of the High Court under Article 226 of the Constitution and the situation when the High Court can refuse to exercise its discretion, such as when alternative efficacious remedy is available to the aggrieved party. In paragraph 4 (last paragraph) of this decision, however, the Court plainly noted that it was not necessary to express any final opinion on the question as to whether Section 8(5) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947) is to be regarded as providing the only remedy available to the aggrieved party and that it excludes altogether the remedy provided for under Article 226 of the Constitution. 17. Reliance was then placed on a three-Judge Bench decision of this Court in ITC Ltd. & Anr. v. Union of India [(1998) 8 SCC 610 = 1998 (101) E.L.T. 9 (....
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....being pursued in good faith by the assessee (appellant). 18. Suffice it to observe that this decision is on the facts of that case and cannot be cited as a precedent in support of an argument that the High Court is free to entertain the writ petition assailing the assessment order even if filed beyond the statutory period of maximum 60 days in filing appeal. The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory limitation period of 60 days in terms of Section 31 of the 2005 Act and is, therefore, not entertained, it is incomprehensible as to how it would become a case of violation of fundamental right, much less statutory or legal right as such. 19. Arguendo, reverting to the factual matrix of the present case, it is noticed that the respondent had asserted that it was not aware about the passing of assessment order dated 21-6-2017 although it is admitted that the same was served on the authorised representative of the respondent on 22-6-2017. The date on which the respondent became aware about the order is not expressly stated either in the application for condonation of delay filed before the appell....
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....ployee (P. Sriram Murthy, Deputy Manager-Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has been filed in support of the stand taken in the application for condonation of delay. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24-9-2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all." 4.10 In case of Pathapati Subba Reddy (Died) By L.Rs. & Ors. [Order dated 08.04.2024 in Special Leave Petition (Civil) No. 31248 Of 2018] after considering the past precedence Hon'ble Supreme Court has held as follows: 26. On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: (i) Law of ....