Case Law Details
Principal Commissioner Vs Emaar MGF Land Ltd (Delhi High Court)
Delhi High Court held that extended service tax demand invoking proviso to Section 73(1) of the Act would be applicable on account of mis-statement or suppression of facts only if the same was deliberate and for the purposes of evading payment of duty.
Facts- The Revenue has filed the present appeal u/s. 35G of the Central Excise Act, 1944 impugning an order passed by the Customs, Excise and Service Tax Appellate Tribunal in Service Tax Appeal No.51379/2017.
The respondent, M/s Emaar India Ltd., had filed the aforementioned appeal before the learned Tribunal impugning an order-in-original dated 31.01.2017 passed by the Commissioner, Service Tax, whereby the Commissioner had confirmed a demand of ₹2,44,48,095/- and had ordered recovery of the said amount, as being inadmissible Cenvat Credit under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73(2) of the Finance Act, 1994. In addition, the Commissioner had ordered recovery of interest u/s. 75 of the Act. The Commissioner had also imposed penalty of an equivalent amount of ₹2,44,48,095/- u/s. 78 of the Act and a penalty of ₹10,000/- for failing to file the correct ST-3 returns, disclosing the taxable income and Cenvat Credit in accordance with the provisions of Section 70 of the Act.
Conclusion- Once an assessee has truly disclosed the facts, it would not be apposite to invoke the provisions of Section 73(1) of the Act only on the ground that the assessee has classified its services under a head which the revenue considers erroneous. However, if such classification is, ex facie, untenable and done with the intent of evading any liability, the proviso to section 73(1) of the Act, would be applicable. If the assessee’s interpretation of the statutory provision is a reasonable one and the assessee has disclosed material facts, it would be erroneous to apply the proviso to Section 73(1) of the Act on account of mis-declaration or suppression of facts.
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