Shyam Spectra Private Limited Vs Commissioner of Service Tax (CESTAT Delhi)
Summary: CESTAT Delhi set aside the order dated 30.12.2016 passed by the Commissioner of Service Tax, Delhi II confirming service tax demand with interest and penalty by invoking the extended period under the proviso to section 73(1) of the Finance Act, 1994. The appellant, engaged in providing internet services, had been subjected to departmental audits for the period 2006-07 to 2009-10, following which a show cause notice dated 19.10.2011 was issued covering various alleged service tax liabilities, including services provided to STPI units, the US Library of Congress and US Commercial Services, excess utilisation of CENVAT credit, short-payment of service tax, services provided to SEZ units and interest on delayed payment. The Tribunal examined whether the extended limitation could be invoked on the allegation that the appellant had suppressed facts with intent to evade service tax. Referring to the principles laid down in Pushpam Pharmaceuticals Company, Anand Nishikawa Company Ltd., Uniworth Textile Limited and Continental Foundation Joint Venture Holding, the Tribunal held that suppression of facts, for purposes of extended limitation, must be deliberate or wilful and accompanied by an intent to evade payment of tax. The show cause notice merely asserted that the appellant had intentionally and wilfully suppressed facts because the correct service tax liability had not been disclosed in the returns. It did not identify any positive act demonstrating an intention to evade payment. The Tribunal also noted that the appellant had been filing service tax returns and that its records had already been audited by departmental officers for the relevant period. The Commissioner’s reliance on the self-assessment scheme was held insufficient, as self-assessment did not relieve departmental officers of their duty to scrutinise returns and seek supporting records where necessary. In support, the Tribunal considered the decision in M/s. Raydean Industries, where the importance of departmental scrutiny even under self-assessment was recognised. The Tribunal concluded that there was no suppression of material facts, much less suppression with intent to evade service tax, and therefore the extended period under the proviso to section 73(1) could not be invoked. It also considered the appellant’s reliance on Infinity Infotech Parks concerning demands arising from transactions covered by an incorrectly invoked extended period, but found it unnecessary to examine the separate issue concerning the time limit under section 73(4B). The impugned order was consequently set aside and the appeal was allowed.
Cases Discussed
- Pushpam Pharmaceuticals Company Vs Collector of Central Excise, Bombay, 1995 (78) E.L.T. 401 (S.C.)
- Anand Nishikawa Company Ltd. Vs Commissioner of Central Excise, 2005 (188) E.L.T. 149 (S.C.)
- Uniworth Textile Limited Vs Commissioner of Central Excise, Raipur, 2013 (288) E.L.T. 161 (S.C.)
- Continental Foundation Joint Venture Holding Vs Commissioner of Central Excise, Chandigarh-I, 2007 (216) E.L.T. 177 (S.C.)
- Bharat Hotels Limited Vs Commissioner of Central Excise (Adjudication), 2018 (12) GSTL 368 (Del.)
- Commissioner of C. Ex. & Customs Vs Reliance Industries Ltd., 2023 (385) E.L.T. 481 (S.C.)
- M/s. Raydean Industries Vs Commissioner CGST, Jaipur, Excise Appeal No. 52480 of 2019, decided on 19.12.2022
- Infinity Infotech Parks, 2014 (36) S.T.R. 37 (Cal.), decided on 30.04.2014
FULL TEXT OF THE CESTAT DELHI ORDER
Shyam Spectra Pvt. Ltd1 (formerly called Citicom Network Private Limited) has filed this appeal to assail the order dated 2 30.12.2016 passed by the Commissioner of Service Tax, Delhi II by which the demand of service tax has been confirmed with interest and penalty by invoking the extended period of limitation contemplated under the proviso to section 73 (1) of the Finance Act, 1994.3
2. The appellant is engaged in providing internet services. An audit of the records of the appellant was conducted by the officers of the Service Tax Commissionerate on 28.10.2010, 03.11.2010, 06.12.2010, 22.07.2011, 25.07.2011 and 26.08.2011 for the period from 2006-07 to 2009-10.
3. On the basis of the audit report, a show cause dated 19.10.2011 was issued to the appellant proposing demand of service tax with interest and penalty on the following issues:
I. Services rendered to STPI units
(a) The appellant rendered services to STPI Units (100% EOU) during the relevant period, which are not exempted from service tax under Notification dated 31.03.2004.
(b) The services rendered by the appellant were in nature of lease circuit services, telecommunication services, internet telecommunication services, online information services, on which the appellant is liable to pay service tax.
(c) For the period from 2008-09 to 2010-11, the appellant is liable to pay service tax of Rs. 1,03,66,861/-.
II. Services rendered to US Library of Congress and US Commercial Services
(a) The appellant rendered certain services to US Library of Congress and US Commercial Services, which are not exempt under Notification dated 02.08.2002.
(b) For the period from 2008-09 to 2010-11, the appellant is liable to pay service tax of Rs. 2,25,573/-.
III. Service Tax on the above services during 2006-07 and 2007-08
(a) On the above services rendered to STPI Units, US Library of Congress and US Commercial Services, the appellant is liable to pay service tax of Rs. 1,93,12,582/- for the period 2006-07 and 2007-08 also.
IV. Utilization of Credit in excess of 20%
(a) In its ST-3 returns, the appellant claimed and utilized CENVAT Credit on common input services for the period 2006-07 to 2007-08. There was a restriction on utilization of credit in excess of 20%.
(b) During September, 2006 to March, 2008, the appellant utilized credit in excess of 20%, on which it is liable to pay interest of Rs. 5,16,956/-.
V. Short-payment of Service Tax
(a) For the period April-June, 2006, the appellant short-paid service tax of Rs. 13,85,051/-, as reflected in ST-3 returns.
VI. Non-payment of Service Tax on services rendered to SEZ units during 03.03.2009 to 20.05.2009
(a) The appellant rendered services to a SEZ Unit during 03.03.2009 to 20.05.2009 for Rs. 1,07,879/-, on which it is liable to pay service tax of Rs. 11,112/-.
VII. Interest on late payment of Service Tax
(a) Service tax liability for the months of September, 2007 and March, 2008 was deposited by the appellant after the due date. Thus, the appellant is liable to pay interest of Rs. 5,231/-.
4. The show cause notice also invoked the extended period of limitation under the proviso to section 73(1) of the Finance Act and the allegations made in the show cause notice on this aspect are as follows:
“11. From the foregoing it appears that the assessee has contravened the following provisions of Service Tax, the Chapter V of the Finance Act, 1994, as amended, read with the provisions of Service Tax Rules, 1994, as amended.
a) Section 66 of the Finance Act, 1994 as amended, in as much as they have failed to pay Service Tax at the applicable rate on the value of taxable services referred in the sub clauses (zzzu), (zh) and (zzzx) of clause (105) of Section 65 of the Act;
b) Section 67 of the Finance Act, 1994 as amended, in as much as they have failed to pay Service Tax on the taxable value of services on the gross amount charged by them for rendering the taxable service:
c) Section 68 of the Finance Act, 1994 as amended, read with Rule 6 of the Service Tax Rules, 1994 in as much as they have failed to deposit into the account of the Government of India, the service tax leviable in terms of Section 66 of the Act and failed to remit the service tax so leviable within the stipulated time of the service rendered as required under Section 68 of the said Act;.
d) Section 75 of the Finance Act, 1994 as amended in as much as they failed to deposit Service Tax and failed to deposit applicable interest on the same;
e) Rule 6(2) of CENVAT Credit Rules, 2004 in as much as they failed to maintain separate accounts for taxable and non-taxable/exempted services as they were providing both taxable and non-taxable/exempted services;
f) Rule 6(3) (c) of CENVAT Credit Rules, 2004 in as much as they failed to utilize CENVAT Credit only to extent of an amount not exceeding twenty percent of the amount of service tax payable on taxable output service;
g) Section 91 read with Section 95 of the Finance Act (No2),2004 & Section 136 read with Section 140 of the Finance Act, 2007 in as much as they have failed to deposit into the account of the Government of India, the Education Cess and SHEC leviable from them and failed to remit the service tax so leviable within the stipulated time of the service rendered as required under Section 68 of the said Act;
12. Whereas, it further appears that the assessee by doing so, had intentionally and willfully suppressed the facts of providing impugned taxable services and that of receipt of services and calculation of impugned value of such taxable services and did not pay the Service Tax as applicable on such services and did not file prescribed ST-3 returns accordingly. Thus, by not disclosing the entire facts to the Department, the said value has escaped the assessment for Service Tax liability, resulting into contravention of various provisions of the said Act and the said Rules aforesaid with intention to evade payment of impugned Service Tax. The fact of rendering of these services and availment of inadmissible CENVAT Credit would not have come to the notice of the department but for the audit conducted by the department. Thus, it appears that the provision of proviso to Section 73 (1) of the Act ibid can be invoked and thus demand and recovery can be made for non-payment of Service Tax for five years from the relevant date.”
(emphasis supplied)
5. The appellant filed a detailed reply to the show cause notice. Apart from denying the leviability of service tax, the appellant also contended that the extended period of limitation could not have been invoked in the facts and circumstances of the case.
6. The Commissioner held that the department was justified in invoking the extended period of limitation and confirmed the demand of service tax.
7. In regard to the extended period of limitation, the Commissioner observed as follows:
“23.(a) So far as invocation of extended period is concerned, I find that Section 68 of the Finance Act, 1994 provides that every person providing taxable service to any person shall pay Service Tax at the specified rates and in such manner and within such period as may be prescribed. Further, Rule 6 of the Service Tax Rules, 1994 stipulates that Service Tax shall be paid to the credit of the Central Government, by the 5th or 6th of the month, as the case may be, (5th or 6th of the quarter in the case of the individual, proprietary or partnership concerns) immediately following the calendar month, in which the payments are received, towards the value of taxable services. The noticee is working under the self-assessment and the onus to pay proper Service Tax is on them. In the instant case, the Noticee has suppressed all the material facts from the department till date.”
(emphasis supplied)
8. Shri J. K. Mittal, learned counsel for the appellant assisted by Shri Kapil Kant submitted that not only should the impugned order be set aside for failure to comply with the time limited specified in section 73 (4B) of the Finance Act, but also for the reason that the extended period of limitation could not have been invoked in the facts and circumstances. Learned counsel also submitted that when the extended period of limitation cannot be invoked, then the demand for the period within limitation cannot also be confirmed in view of the judgment of the Calcutta High Court in Infinity Infotech Parks Ltd vs. Union of India.4
9. Shri Rajeev Kapoor, learned authorized representative appearing for the department, however, supported the impugned order and submitted that it does not call for any interference in this appeal.
10. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered.
11. It would be appropriate to first examine whether the extended period of limitation could have been invoked in the facts and circumstances.
12. In the present case, as noticed above, the show cause notice which is dated 19.10.2011 covers the period from 2006 to 2011. It is not in dispute that an audit was undertaken by the officers of the Service Tax Commissionerate on 28.10.2010, 03.11.2010, 06.12.2010, 22.07.2011, 25.07.2011 and 26.08.2011 for the period from 2006-07 to 2009-10.
13. In order to appreciate whether the extended period of limitation was correctly invoked, it would appropriate to reproduce section 73 of the Finance Act as it stood at the relevant time. This section deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded. It is as follows;
“73.(1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:
PROVIDED that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of-
(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words “one year”, the words “five years” had been substituted.”
14. It would be seen from a perusal of sub-section (1) of section 73 of the Finance Act that where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice.
15. The ”relevant date” has been defined in section 73 (6) of the Finance Act as follows;
73(6) For the purpose of this section, “relevant date” means,-
(i) In the case of taxable service in respect of which service tax has not been levied or paid or has been short- levied or short paid-
(a) where under the rules made under this Chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed;
(b) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules;
(c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made thereunder;
16. The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word “one year”, the word “five years” has been substituted.
17. It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be “wilful‟ since “wilful‟ precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression “wilful” before “suppression of facts” under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be “wilful‟ and there should also be an intent to evade payment of service tax.
18. In Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay,5 the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. The observations are as follows;
“4. Section 11A empowers the Department to re- open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of court the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which 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.”
(emphasis supplied)
19. This decision was referred to by the Supreme Court in Anand Nishikawa Company Ltd. vs. Commissioner of Central Excise and the observations are as follows:
“26 ………..This Court in the case of Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay, while dealing with the meaning of the expression “suppression of facts” in proviso to Section 11A of the Act held that the term must be construed strictly. It does not mean any omission and the act must be deliberate and willful to evade payment of duty. The Court, further, held:-
“In taxation, it (“suppression of facts”) can have only one meaning that the correct information was not disclosed deliberately to escape 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.”
27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that “suppression of facts” can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one party to do what he might have done not that he must have done would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act.”
(emphasis supplied)
20. These two decisions in Pushpam Pharmaceuticals and Anand Nishikawa Company Ltd. were followed by the Supreme Court in the subsequent decision in Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur and the observation are: “18. We are in complete agreement with the principal enunciated in the above decisions, in light of the proviso to section 11A of the Central Excise Act, 1944.”
21. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I8 also held:
“10. The expression “suppression” has been used in the proviso to Section 11A of the Act accompanied by very strong words as ‘fraud’ or “collusion” and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct.”
(emphasis supplied)
22. The Delhi High Court in Bharat Hotels Limited vs. Commissioner of Central Excise (Adjudication)9 also examined at length the issue relating to the extended period of limitation under the proviso to section 73 (1) of the Finance Act and held as follows;
“27. Therefore, it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word “suppression‟ in the proviso to Section 11A(1) of the Excise Act has to be read in the context of other words in the proviso, i.e. “fraud, collusion, wilful misstatement”. As explained in Uniworth (supra), “misstatement or suppression of facts” does not mean any omission. It must be deliberate. In other words, there must be deliberate suppression of information for the purpose of evading of payment of duty. It connotes a positive act of the assessee to avoid excise duty.
xxxxxxxx
Thus, invocation of the extended limitation period under the proviso to Section 73(1) does not refer to a scenario where there is a mere omission or mere failure to pay duty or take out a license without the presence of such intention.”
xxxxxxxx
The Revenue has not been able to prove an intention on the part of the Appellant to avoid tax by suppression of mention facts. In fact it is clear that the Appellant did not have any such intention and was acting under a bonafide belief.”
(emphasis supplied)
23. It is, therefore, clear that even when an assessee has suppressed facts, the extended period of limitation can be invoked only when “suppression‟ is shown to be wilful with intent to evade the payment of service tax.
24. It clearly transpires from paragraphs 11 and 12 of the show cause notice which have been reproduced above, that after mentioning that the appellant had contravened the provisions enumerated in the said paragraph, it merely mentions that by doing so the appellant had intentionally and willfully suppressed facts and did not pay the service tax; by not disclosing the entire facts to the department, the taxable value escaped the assessment resulting into contravention of various provisions of the Finance Act with intention to evade payment of service tax; and had the audit not been conducted by the department this fact would not have come to the notice of the department.
25. The show cause notice, therefore, presumes that there was intent to evade payment of service tax merely because the appellant had not disclosed the correct service tax liability in the service tax returns. The show cause notice does not disclose why the appellant had an intent to evade payment of service tax. Merely because the correct service tax liability had not been disclosed, it cannot be presumed that there was an intent to evade payment of service tax. The Commissioner has also upheld the invocation of the extended period of limitation for the reason that under the self-assessment scheme, proper service tax disclosure is on the appellant, but the appellant suppressed all material facts from the department. The Commissioner has also not given any reason as to why the appellant had an intent to evade payment of service tax.
26. The burden of proving that the appellant had suppressed facts with an intent to evade payment of service tax was clearly upon the department. It was necessary for the department to illustrate any positive act on the part of the appellant. According to the appellant, it was under a bonafide belief that it was not liable to pay service tax and the matter also involved interpretation of various provisions of the Finance Act as well as the services rendered to the SEZ Units and to the STPI Units. The appellant had been filing the service tax returns and an audit of the records of the appellant had also been conducted in 2010 for the period 2006-07 to 2009-10. The show cause notice was, however, issued on 19.10.2011 after a substantial lapse of time.
27. In this connection, it would be pertinent to refer to the judgment of the Supreme Court in Commissioner of C. Ex. & Customs vs. Reliance Industries Ltd..10 The Supreme Court held that if an assessee bonafide believes that it was correctly discharging duty, then merely because the belief is ultimately found to be wrong by a judgment would not render such a belief of the assessee to be malafide. If a dispute relates to interpretation of legal provisions, it would be totally unjustified to invoke the extended period of limitation. The Supreme Court further held that in any scheme of self-assessment, it the responsibility of the assessee to determine the liability correctly and this determination is required to be made on the basis of his own judgment and in a bonafide manner. The relevant portion of the judgment is reproduced below:
“23. We are in full agreement with the finding of the Tribunal that during the period in dispute it was holding a bona fide belief that it was correctly discharging its duty liability. The mere fact that the belief was ultimately found to be wrong by the judgment of this Court does not render such belief of the assessee a mala fide belief particularly when such a belief was emanating from the view taken by a Division Bench of Tribunal. We note that the issue of valuation involved in this particular matter is indeed one were two plausible views could co- exist. In such cases of disputes of interpretation of legal provisions, it would be totally unjustified to invoke the extended period of limitation by considering the assessee’s view to be lacking bona fides. In any scheme of self-assessment it becomes the responsibility of the assessee to determine his liability of duty correctly. This determination is required to be made on the basis of his own judgment and in a bona fide manner.
24. The extent of disclosure that an assessee makes is also linked to his belief as to the requirements of law. xxxxxxxxxxx. On the question of disclosure of facts, as we have already noticed above the assessee had disclosed to the department its pricing policy by giving separate letters. It is also not disputed that the returns which were required to be filed were indeed filed. In these returns, as we noticed earlier there was no separate column for disclosing details of the deemed export clearances. Separate disclosures were required to be made only for exports under bond and not for deemed exports, which are a class of domestic clearances, entitled to certain benefits available otherwise on exports. There was therefore nothing wrong with the assessee’s action of including the value of deemed exports within the value of domestic clearances.”
(emphasis supplied)
28. The Commissioner was swayed by the fact that the appellant was working under a self-assessment scheme and, therefore, the onus to pay proper service tax was on the appellant.
29. The Commissioner was not justified in recording such a finding. 11 In M/s. Raydean Industries vs. Commissioner CGST, Jaipur, the Tribunal in connection with the extended period of limitation, observed that even in the case of self assessment, the department can always call upon an assessee and seek information and it is the duty of the proper officer to scrutinize the correctness of the duty assessed by the assessee. The Division Bench also noted that departmental instructions issued to officers also emphasise that it is the duty of the officers to scrutinize the returns. The relevant portion of the decision is reproduced below:
“24. It would be seen that the ER-III/ER-I returns filed by the applicant clearly show that the applicant had categorically declared that it had cleared the final products by availing the exemption under the notification dated 17.03.2012. The applicant had furnished the returns on the basis of self assessment. Even in a case of self assessment, the Department can always call upon an assessee and seek information. It is under sub-rule (1) of rule 6 of the Central Excise Rules, 20028 that the assessee is expected to self assess the duty and sub-rule (3) of rule 12 of the 2002 Rules provides that the proper officer may, on the basis of information contained in the return filed by the assessee under sub-rule (1), and after such further enquiry as he may consider necessary, scrutinize the correctness of the duty assessed by the assessee. Sub-rule (4) of rule 12 also provides that every assessee shall make available to the proper officer all the documents and records for verification as and when required by such officer. Hence, it was the duty of the proper officer to have scrutinized the correctness of the duty assessed by the assessee and if necessary call for such records and documents from the assessee, but that was not done. It is, therefore, not possible to accept the contention of the learned authorized representative appearing for the Department that the appellant should have filed a proper assessment return under rule 6 of the Rules.
25. Departmental instructions to officers also emphasise upon the duty of officers to scrutinize the returns. The instructions issued by the Central Board of Excise & Customs on December 24, 2008 deal with “duties, functions and responsibilities of Range Officers and Sector Officers”. It has a table enumerating the duties, functions and responsibilities and the relevant portion of the table is reproduced below:
xxxxxxxxx
26. The Central Excise Manual published by CBEC on May 17, 2005, which is available on the website of CBEC, devotes Part VI to SCRUTINY OF ASSESSMENT.
xxxxxxxxxx
27. It is thus evident that not only do the 2002 Rules mandate officers to scrutinise the Returns to verify the correctness of self assessment and empower the officers to call for documents and records for the purpose, Instructions issued by the department also specifically require officers at various levels to do so.”
(emphasis supplied)
30. There is, therefore, no suppression of material facts from the department, much less with an intent to evade payment of service tax. The extended period of limitation contemplated under the proviso to section 73(1) Finance Act, therefore, could not have been invoked in the facts and circumstances of the case.
31. Learned counsel for the appellant also submitted that when the extended period of limitation cannot be invoked, the demand for the period which is within limitation cannot be confirmed and in this connection reliance has been placed on the judgment of the Kolkata High Court in Infinity Infotech Parks.
32. In Infinity Infotech Parks, the Calcutta High Court observed as follows:
“92. When a notice is issued in support of transactions spread over a period of time and it is found that the extended period of invocation has been invoked, the notice cannot be treated as within limitation for some of the same transaction, once it is found that the extended period of limitation is not invocable. This proposition find support from the judgment of the Supreme Court in Collector of Central Excise, Jaipur v. Alcobex Metals reported in (2003) 4SCC 630=2003 (153) E.L.T. 241 (S.C.).”
33. It will, therefore, not be necessary to examine the contention raised by learned counsel for the appellant that the order should be set aside as the time limit specified in section 73(4B) of the Finance Act had not been adhered to.
34. The impugned order 30.12.2016 passed by the Commissioner, therefore, cannot be sustained and is set aside. The appeal is, accordingly, allowed.
(Order pronounced on 31.07.2024)
Notes:
1 the appellant
2 the Commissioner
3 the Finance Act
4 2014 (36) S.T.R. 37 (Cal.) decided on 30.04.2014
5 1995 (78) E.L.T. 401 (S.C.)
6 2005 (188) E.L.T. 149 (SC)
7 2013 (288) E.L.T. 161 (SC)
8 2007 (216) E.L.T. 177 (SC)
9 2018 (12) GSTL 368 (Del.)
10 2023 (385) E.L.T. 481 (S.C.)
11 Excise Appeal No. 52480 of 2019 decided on 19.12.2022
