TaxTMI 
TaxTMI 
2026 (7) TMI 591
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....llant has receipts towards the provisions of services as follows: S. No. Description Amount (In Rs.) 1. Amount paid 194C, 1941a, 194lb, 194J,194H (26 AS) 3164563/- 2. Sale of Services ITR 3481019/- 2.3 To enquire investigate into the receipts and payment of service tax against these receipts, letter dated 24.02.2021 and reminder letter 19.03.2021 and 31.08.2021 were written to the appellant asking them to furnish Balance Sheet. Service Tax returns, Ledger Account, Bank Statement, Copies of Invoices for the Financial Year 2016-17 to Financial Year 2017-18 (April 17 to June 17) for verification of their Service Tax liability. In the absence of any reply a summon dated 09.09.2021 was issued. 2.4 Appellant did not provided any documents viz. invoice, agreement etc. therefore, it is not possible to determine the benefit of any abatement or exemption, available if any. As such, the party is liable to pay Service Tax on the gross receipts as per the information available with this office. Further Appellant did not file any ST-3 Returns for the Financial Year 2016-17. Thus the service tax short/ not paid by the appellant for the Financial Year was determine....
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....on 142 & 174 of CGST Act, 2017 for failure to pay Service Tax & suppressing the facts and contravening provisions or rules with intent to evade payment of Service Tax. (iv) Penalty should not imposed under Section 77(1)(b) of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not maintaining the proper records. (v) Penalty should not be imposed upon them under Section 77(1)(C)(i)(ii)(iii) of the Finance Act, 1994 read with Section 142 & 174 of CGST Act, 2017 for not furnishing the information before a Central Excise officer. (vi) Penalty should not be imposed upon them under Section 77(1)(d) of the Finance Act, 1994 read with Section 142 & 174 of CGST Act, 2017 for fails to pay the Service tax electronically. (vii) Penalty/Late fee under Section 77(2) of the Finance Act, 1994 read with Section 142 & 174 of CGST Act, 2017 for non filing of ST-3 returns. 2.7 The appellant submitted their defence reply vide letter dated 12.12.2023 claiming that their service were exempted under Sl No 9 of the Notification No 25/2012-ST dated 20.06.2012. They also attended the personal hearing on 12.12.2023. Taking into ....
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....as follows: "The captioned Appeal was listed for hearing on 29/06/26 wherein the undersigned appeared before your honour with the facts of the case. During the course of arguments the undersigned also relied upon various judgments of Hon'ble Supreme courts and Tribunals to strengthen the argument that there is no positive action on the part of the Appellant so as to lead to the conclusion that there is suppression etc. and therefore extended period of limitation is not invokable merely on the basis of third party information gathered by the Department. Further it was also argued that the Balance Sheets, ITR etc. are public documents and the extended period of limitation cannot be invoked merely on the basis of this information. During the course of argument a query was raised by the Hon'ble bench as to whether a list of documents as mentioned under Rule 5 of the Service Tax Rules has been provided to the Department. The undersigned was asked to check this fact from the Appellant and respond back. The undersigned has checked with the appellant and submits that the list under Rule 5 of the Service Tax Rules has not been provided to the Department. T....
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....available in terms of Para 9 (b) of the said notification for following services- "9. Services provided- (b) to an educational institution, by way of, - (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution;" Upon analyzing the facts of the case in light of the legal provisions, it is observed that the service recipients in the present case are neither educational institutions nor do the services rendered by the appellant fall under any of the categories of exempted services specified herein above. 5.2 I further note from the impugned order that the appellant has declared an income of 234,81,019/- from services in his Income Tax Return (ITR). However, as seen from the following table, the appellant has not provided any explanation or submission regarding an amount of Rs.3,16,456/-. Income from services as per ITR Name of the service recipients whose a....
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....ic, proprietary and confidential nature, about its Code of Conduct AND WHEREAS, the Parties recognize that careful protection and non-disclosure by the Receiving Party of the Confidential Information (as defined herein below) received from the Disclosing Party is of utmost importance to the Disclosing Party. AND THEREFORE, in consideration of the promises made herein, the Disclosing Party agrees to disclose and the Receiving Party agrees to obtain and protect certain confidential information under the terms and conditions hereinafter appearing." From perusal of the above agreement there is no room for any doubt that services provided by the appellant to M/s Mahindra and Mahindra were not in nature of the services covered by (iv) of S No 9 of the Notification No 25/2012-ST dated 20.06.2012. These services were not provided to any educational institution and were not in relation to conduct of any examination. There is also no room for any doubt about the non admissibility of exemption in respect of these services in view of the specific recitations in the agreement itself. B. Agreement with BAJA SAEINDIA. THIS AGREEMENT ("Agreement") is ma....
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.... * X-JAAM team will also provide one (1) dedicated Data Analyst to SAE India, who will support then in the complete process and co-ordinate with the on ground authorities. Analyst will also be responsible for co-coordinating with the assessment team for final test result analysis and preparation. * Post evaluation and psychometric test, X-JAAM team will share the test scores with SAE India for deciding the final cut off list. * The final cut off list will be used for preparing the copy of certificates. The same will be shared with BAJA SAEINDIA, The Certificates will be printed and posted to the candidates directly by X-JAAM, without any additional cost to BAJA. * The Certificate format will be shared by BAJA, and the quality will be approved by BAJA SAE INDIA. 2. BAJA SAEINDIA DELIVERABLES * Payment Terms ○ Contract validity period: 3 years (2016-2018) ▪ SAE-BAJA 2016 INR 4.85 Loc 14.5% ST (year 2016) ▪ SAE-BAJA 2017 INR 4.85 Lac 15.0% ST (year 2017) ▪ SAE-BAJA 2018 INR 4.85 Lac 15.0% ST (year 2018) * Backend Support For smooth execution of the event and to en....
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.... is a new plea which was not raised either in the reply to the Show Cause Notice or in the appeal before the lower appellate authority and such plea has not been raised even in the present appeal and the plea also remains unsubstantiated. Therefore, MEPP's intention to evade payment of duty is clearly evident and invocation of the proviso to Section 11A of the Central Excise Act, 1944, for the purpose of demand of duty for the extended period is justified. For the same reason, penalty upon MEPP is also warranted." Affirming this order Madras High Court [Order dated 02.01.2026 in CMA No. 3435 of 2009] held as follows: "2. The questions raised for adjudication relates solely to the non consideration of the aspect of limitation by the Tribunal and read thus: (1) Whether the 1st respondent is right in rejecting the legal plea regarding department's knowledge and time bar by holding that this plea was not raised before the lower authorities? (2) Whether the 1st respondent is right in rejecting the above plea by holding that the same was not raised even in the appeal filed before it, but only during the hearings?' 12. Normally, limitation, if it wer....
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....fact, the position that the Department was well aware of the existence of EPI and its activities. 17. This becomes a very relevant question of fact, one which is critical to determine the question of limitation, in this case thus, a mixed question of law and fact. Thus, and in the absence of necessary facts, we find nothing untoward in the conclusion of the Tribunal rejecting the plea of limitation raised for the first time before it, particularly in the absence of any supporting material. We answer the substantial questions of law in favour of the Department and against the assessee." 4.5 From the discussions it is evident that appellant has no ground also on limitation. They have in fact suppressed the agreements which were never produced before the authorities below even when called for by letters dated 24.02.2021, 19.03.2021 & 31.08.2021 and summon dated 09.09.2021. Further I also observe that even the argument made by the appellant that all their balance sheet and ITR were public documents available on their web site also do not support their case. They have admitted that they had never disclosed about these documents being available on their website to the jurisdi....
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.... "....by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,...". In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assessees it was also submitted that Sections 11A and 11AC not only operate in different fields but the two provisions are also separated by time. The penalty provi....
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....reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the "Rules') and a decision of this Court in Chairman, SEBI v. Shriram Mutual Fund & Anr. [2006 (5) SCC 361] and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI's case (supra) and not in Dilip Shroff's case (supra). Therefore, the matter was referred to a larger Bench." After referring to a number of decisions on interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and held as follows : "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. "27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept o....
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....eed a particular limit, that itself indicates scope for discretion but that is not the case here." 23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. That is what Dharamendra Textile decides." 4.8 I also uphold the penalties imposed upon the appellant under Section 77 (1)(b), 77 (1)(b). 77 (1)(b) and 77 (2) of the Finance Act, 1994 following the decision of the Hon'ble Supreme Court in case of Gujarat Travancore Agency [1989 (42) ELT 350 (SC)] holding as follows: 4. Learned Counsel for the assessee has addressed an exhaustive argument before us on the question whether a penalty imposed under Section 271(1)(a) of the Act involves the element of mens rea and in support of his submission that it does he has placed before us several cases decided by this Court and the High Courts in order to d....
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.... the statement in Corpus Juris Secundum Volume 85, page 580, Paragraph 1023 : "A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws." 5. Accordingly, we hold that the element of mens rea was not required to be proved in the proceedings taken by the Income Tax Officer under Section 271(1)(a) of the Income-tax Act against the assessee for the assessment years 1965-66 and 1966-67. 4.9 I uphold the demand of interest which is necessary corollary upon upholding the demand for service tax following decision of Hon'ble Bombay High Court in case of Valecha Engineering Limited [2010 (249) E.L.T. 167 (Bom.)] wherein following was held: 30 ........ The law as now settled is that the charging Section for Customs Duty is Section 12 whereas the charging Section in so far as the Customs Tariff Act is Section 3. However, relevant for our discussion would be the Sections 3, 3A and their relevant sub-sections. Would a construction of these provisions, result in holding that in....