Dinesh Chandra R Agarwal Infracon Pvt Ltd Vs Commissioner of CGST & C.Ex – Gandhinagar (CESTAT Ahmedabad)
CESTAT Ahmedabad held that mere suppression of facts is not enough for invoking extended period of limitation. There must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty.
Facts-
The appellant participated in a tender floated by Military Engineer Services, Ministry of Defense, Government of India for resurfacing of runaway and aircraft operating areas Suratgarh in the state of Rajasthan. The appellant submitted the bid for the tender on 14th June 2016 and they were declared as a successful bidder. The Chief Engineer issued the letter of acceptance in favour of the appellant on behalf of the President of India.
The appellant entertained a view that their services provided to the Chief Engineer, Military Engineer Services is exempted from payment of service tax vide the notification number 25/2012-ST dated 20.06.2012 as amended from time to time.
Based on the intelligence, an inquiry was initiated against the appellant regarding difference in taxable value declared in the service tax returns filed by them as compared to the revenue shown in their financial statements. On conclusion of the investigation, show cause notice was issued to the appellant on the ground that appellant are not eligible for exemption under Notification No. 25/2012-ST dated 20.06.2012 as amended and also has misdeclared or suppressed the value of the taxable services.
The show cause notice alleged suppression on the part of the appellant and invoked the extended period of limitation as provided for in the first proviso to section 73(1) of the Finance Act, 1994. Commissioner confirmed the demand of service tax on the appellant. Being aggrieved, the present appeal is filed.
Conclusion-
Mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. Thus, mere non disclosure of the receipts in the service tax return would not mean that there was an intent to evade payment of service tax.
Held that learned Commissioner has not given any ground to show that there was a deliberate attempt on the part of the appellant to suppress or to miss declare the value of service. Ld. Commissioner has not even examined the various ingredients for invocation of extended period of limitation as provided in first proviso to section 73(1) of the Finance Act 1994.We observe that on the basis of the above analysis of Section 73(1) of the Finance Act, 1994 and various decision of these tribunal and settled principle of law we are of the clear view that the demand of service tax in the present matter beyond the period of limitation is not sustainable. We observe that the demand in the present matter is for the period 2016-17 and April 2017 to June 2017 and the show cause notice is issued on 27.08.2020. Therefore the entire demand is liable to be set aside on the ground of limitation
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The present appeal has been filed by the Appellant against the order in original having number AHM-EXCUS-003-COM-001-23-24 dated 19.05.2023 wherein the demand of service tax of Rs.6,89,26,964/- has been confirmed along with interest and penalty.
2.1 The brief facts of the matter are as under.
2.2 The appellant participated in a tender having number CA NO CE WAC/SUR/T-34/2014-15 floated by Military Engineer Services, Ministry of Defense, Government of India for resurfacing of runaway and aircraft operating areas Suratgarh in the state of Rajasthan. The appellant submitted the bid for the tender on 14th June 2016 and they were declared as a successful bidder. The Chief Engineer, (AF) WAC, Military Engineer Service, Palam, Delhi Cantt issued the letter of acceptance dated 14.06.2016 in favour of the appellant on behalf of the President of India.
2.3 The appellant entertained a view that their services provided to the Chief Engineer, Military Engineer Services is exempted from payment of service tax vide the notification number 25/2012-ST dated 20.06.2012 as amended from time to time.
2.4 Based on the intelligence inputs received by the Directorate General of Goods and Service Tax Intelligence, Ahmedabad, an inquiry was initiated against the appellant regarding difference in taxable value declared in the service tax returns filed by them as compared to the revenue shown in their financial statements. On conclusion of the investigation, show cause notice dated 27th August 2020 was issued to the appellant on the ground that appellant are not eligible for exemption under Notification No. 25/2012-ST dated 20.06.2012 as amended and also have misdeclared or suppressed the value of the taxable services. The show cause notice alleged suppression on the part of the appellant and invoked the extended period of limitation as provided for in first proviso to section 73(1) of the Finance Act, 1994.
2.5 The appellant submitted the reply to the said show cause notice. However, Learned Commissioner of Central Tax, Gandhinagar confirmed the demand of service tax on the appellant.
3. We have heard Mr. Jigar Shah and Mr. Amber Kumrawat, Learned Advocates for the Appellant and also heard Mr. Rajesh Nathan Learned Authorized Representative of the revenue. On perusal of the records and considering the arguments advanced by the Learned Advocates we find that the Appellant have largely contested the matter on the grounds that they are eligible to claim exemption under Notification No. 12/2012-ST dated 20.06.2012, and in any case the Appellant have supported the Government of India in discharge of its sovereign function and therefore, the demand of service tax is not sustainable. The Appellant have also argued the matter on the grounds of revenue neutrality and limitation.
3.1 The appellant have relied on various decisions wherein the service providers have provided services to the government and the demand of service tax was raised under business auxiliary services, business support services, photography services etc. Few of the decisions cited by the appellant are mentioned below:
