TaxTMI 
TaxTMI 
2026 (7) TMI 1128
X X X X Extracts X X X X
X X X X Extracts X X X X
.... here-in-above. b. I confirm the liability of interest at the appropriate rates on the aforesaid short paid Service Tax of amount of Rs.200855/- and order for its recovery under the provisions of the Section 75 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017, as discussed here-in-above. c. I also impose a penalty of Rs.200855/- upon the aforesaid Noticee, under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 for contravention of various provisions of the Act/Rules. However, an option is given to the Noticee under Clause (ii) of sub Section (1) of Section 78 of the Finance Act, 1994 that if the Service Tax along with interest is deposited within thirty days of communication of this order, the amount of penalty liable to be paid by the party shall be twenty five percent of the Service Tax so determined in the order. Provided that the benefit of reduced penalty under the second proviso shall be available only if the amount of such reduced penalty is also paid within such period. d. I also impose a penalty of Rs.10,000/- s.10,000/[Rupees Ten Thousand only] upon the Noticee under Section 77(1)(a) of the Finance Act,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... demanded and recovered from them under the provisions of Section 75 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017; c. Penalty should not be imposed upon them under Section 77(1)(c) of the Act read with Section 174 of CGST Act, 2017 in as much as the Noticee failed to furnish the information called by the CGST & Central Excise Officer. d. Penalty should not be imposed upon them for suppressing the facts from the department with intent to evade payment of service tax under Section 78 of the Act read with Section 174 of the CGST Act, 2017. e. Penalty should not be imposed upon them under Section 77(1)(a) of the Finance Act, 1994 read with Section 174 of the Central Goods and Services Tax Act, 2017 for their failure to take registration as per provisions of Sectioin-69 of the Act. f. Penalty should not be imposed upon them under Section 77(2) of the Act read with Section 174 of the Central Goods and Services Tax Act, 2017 for contravention of various provisions of the Act ibid and Rules made there under." 2.5 The said show cause notice was adjudicated as per the Order-in-Original dated 02.05.2024 referred in para 1 above. 2.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity at a restaurant or as outdoor catering, shall be the specified percentage of the total amount charged for such supply, in terms of the following Table, namely:- SN Description Percentage of total amount 1 Service portion in an activity wherein goods, being food or any other 40 article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant 40 2 Service portion in outdoor catering wherein goods, being food or any 60 other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of such outdoor catering 60 Explanation 1. For the purposes of this rule, "total amount" means the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink (whether or not intoxicating), whether or not supplied under the same contract or any other contract, after deducting- (i) the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e tax leviable thereon under section 66B of the said Finance Act under any other notification." From the explanation, I find that Aggregate value ONLY EXCLUDES values for services which are FULLY EXEMPT and includes values for services which are not fully exempt or partially exempt. Therefore, I hold that aggregate value of taxable services of the Appellant is Rs. 13,19,280/- & Rs. 13,85,210/- during F.Y. 2014-15 & F.Y. 2015-16 respectively. I also find that Para 2(viii) unambiguously provides that for claiming benefit of exemption under this notification the aggregate value of taxable services should not exceed ten lakh rupees in the preceding financial year whereas I find that the aggregate value of taxable services of the Appellant has exceeded ten lakh rupees in the preceding financial year i.e. F.Y. 2014-15. Therefore, I hold that the Appellant is not eligible for benefit of in terms of exemption Notification 33/2012-ST dated 20.06.2012 during F.Y. 2015-16. Accordingly, tax would be calculated on an aggregate value of Rs.13,85,210/- after allowing abatement @40% in terms of Notification 33/2012-ST dated 20.06.2012. 5.6 Accordingly, I hold that the Ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l element and hence, requires looking into the mind of the appellant by gauging its actions, which is an indication of one's state of mind. Black's Law Dictionary, Sixth Edition (pp 1599) defines "willful" in the following manner :- "Willful. Proceeding from a conscious motion of the will; voluntary; knowingly; deliberate. Intending the result which actually comes to pass... An act or omission is "willfully" done, if done voluntarily and intentionally and with the specific intent to do something the law forbids, or with the specific intent to fail to do something the law requires to be done..." 23. In the present case, from the evidence adduced by the appellant, one will draw an inference of bona fide conduct in favour of the appellant. The appellant laboured under the very doubt which forms the basis of the issue before us and hence, decided to address it to the concerned authority, the Development 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of any of the provisions of the Act or of the Rules made thereunder with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been practiced or that the assessee was guilty of wilful misstatement or suppression of fact. In the absence of any such averments in the show-cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act.' It was held that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assessee is put to notice the assessee would have no opportunity to meet the case of the Department. It was held : "...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 exte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1. It is evident from the communication dated 02.12.2013 issued by the Deputy Commissioner of Central Excise, Ahmedabad-III, directing the appellant to furnish the documents relating to their activities, that the department was already aware of the nature of the appellant's operations as early as in 2013. Despite such awareness, the department issued the show cause notice after an inordinate delay, well beyond the ordinary period of limitation, and sought to justify it by invoking the extended period. 9.2 ......... 9.3. It is a settled principle of law that, for the department to invoke the extended period of limitation, there must be an active and deliberate act on the part of the assessee to evade payment of tax. Mere non-payment of tax, without any element of intent or suppression, is not sufficient to attract the extended limitation period. In this regard, reference may be made to the following 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 SC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the fact that no licence had been taken and for which no licence was required because the whole duty was exempt in view of Notification No.111 of 1978, referred to hereinbefore, and in view of the fact that there was scope for believing that it was exempt under Schedule annexed to the first notification i.e. No.55 of 1975, being handicrafts, the appellant could not be held to be guilty of the fact that excise duty had not been paid or short-levied or short-paid or erroneously refunded because of either any fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder. These ingredients postulate a positive act. Failure to pay duty or take out a licence is not necessarily due to fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act. Suppression of facts is not failure to disclose 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 Notifica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the penalty to Rs 5000 and had also upheld the order of the confiscation of the goods. In view of the fact that the claim of the Revenue is not sustainable beyond a period of six months on the ground that these dhoop sticks, etc. were not handicrafts entitled to exemption, we set aside the order of the Tribunal and remand the matter to the Tribunal to modify the demand by confining it to the period of six months prior to issue of show-cause notice and pass consequential orders in the appeal on the question of penalty and confiscation. The appeal is allowed to the extent indicated above and the matter is, therefore, remanded to the Tribunal with the aforesaid directions. This appeal is disposed of accordingly." (ii) CCE v. Chemphar Drugs and Liniments [(1989) 2 SCC 127] "7. The respondent filed an appeal before the Tribunal. The Tribunal considered the matter and noted that the appellant's case 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....raising the demand. So far as the demand for the period within six months reckoned from the date of receipt of the show-cause notice is concerned, we observe that the appellants' case is that value of the goods under T.I. 68 was not required to be included but the Revenue's plea is that only value of the specified goods under Notifications Nos. 71/78 and 80/80 was not required to be excluded." 8. On the aforesaid view the Tribunal came to the conclusion that the demand raised on this for a period beyond 6 months was not maintainable. 9. Aggrieved thereby, the Revenue has come up in appeal to this Court. In our opinion, the order of the Tribunal must be sustained. In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section (1) of Section 11-A of the Act, it has to be established that the duty of excise has 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. Som....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression." (iv) CCE v. Punjab Laminates (P) Ltd. [(2006) 7 SCC 431] "12. At no point of time, the Revenue doubted the correctness or otherwise of the manufacturing process or the ingredients disclosed by the respondent. The stand of the respondent that the industry as such had adopted the same manufacturing process and had been extended the benefit of the exemption notification of 1989 has not been called in question. If the stand of the manufacturer is correct, there was no reason as to why it should be 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....