CESTAT, NEW DELHI BENCH
Career Infosystems Ltd.
Commissioner of Central Excise, Jaipur-I
FINAL ORDER NO. 55330 OF 2013
APPEAL NO. ST/522/2008-CU (DB)
Date of pronouncement: 14.01.2013Online GST Certification Course by TaxGuru & MSME- Click here to Join
D.N. Panda, Judicial Member
Appellant’s grievance is that when the department first proceeded against the appellant to adjudicate that “Commercial Coaching Service” was provided by it and fees collected before 1.7.2003 is taxable that being related to service meant to be provided, the appellant went in appeal before learned Commissioner (Appeals) challenging the adjudication. But that appeal being decided by order dated 4.10.2005 in favour of the appellant. Revenue came before the Tribunal in ST/03/2006 which was disposed on 4.5.2006 (Ref: copy of Tribunal’s order available at pages 51 to 53 of appeal folder). It was found by the Tribunal that show-cause notice was issued to the appellant for charging service tax on services of commercial coaching and training and there was no proposal for demanding service tax on franchisee service which was not the subject-matter of show-cause notice. It was also held that dropping of proceedings by the learned Commissioner (Appeals) was correct. Against such order of the Tribunal, Revenue has gone to High Court.
2. It was also submitted by learned Counsel that during pendency of appeal before High Court Revenue issued another show-cause notice dated 27.6.2006 proposing to tax advance receipts under “franchisee service” which is not correct. It was further submitted by the appellant that proceeding is time-barred and for the same period issuance of another show-cause notice is unwarranted following the decision in the case of Twenty First Century Steels (P.) Ltd. v. CCE 2010 (255) ELT 524 (Punj. & Har.) and Paro Food Products v. CCE. 2005 (184) ELT 50 (Tri.-Bang.).
3. Revenue submits that there is no bar to initiate a proceeding once that is within the time-limit. Learned D.R. relied on the judgment of Apex Court in the case of Pradyumna Steel Ltd. v. Collector of Central Excise 1996 (82) ELT 441 to submit that mere mention of wrong provision of law in the show-cause notice and misreading of provision of the law shall not make a proceeding fatal once suppression causing evasion is detected.
4. Heard both sides and perused the record.
5. None of the parties have brought to our notice as to the matter in controversy before Hon’ble High Court and the issue involved therein. There is no dispute of taxability of receipts by the appellant under taxing entry of “Franchisee Service” which came into force from 1.7.2003. Therefore, that aspect need not be dilated further. The appellant has only misplaced sympathy submitting’ that subsequent show-cause notice dated 27.6.2006 cannot be issued for same period and time bar applies. We do not approve such a proposition when the judgment of Hon’ble Supreme Court in the case of Pradyumna Steel Ltd. (supra) is read and suppression was detected by Revenue.
6. Record reveals that time was very well available to the department to proceed against the appellant issuing show-cause notice dated 27.6.2006 since learned Commissioner (Appeals) acted erroneously under law and a receipt taxable under law had escaped taxation. It may be stated that the matter of classification was not jurisdiction of a single Member Bench of Tribunal as has been done by order dated 4.5.2006 in ST/03/2006 contrary to mandate of section 129C(4) of Customs Act, 1962 as adopted by section 83 of Finance Act, 1994. So also when service tax demand was Rs. 22,48,432/- (Ref: page 56 of appeal folder) in the earlier adjudication.
7. Looking to the interest of Revenue that has undergone suffering and exercise of power by learned Adjudicating Authority not being faulted as has been held by Apex Court in Pradyumna Steel Ltd. (supra) adjudication in terms of the impugned order cannot be said to be fatal because show-cause notice dated 27.6.2006 intended to tax the escaped receipts. Reliance of learned Counsel on the decision in Twenty First Century Steels (P.) Ltd. (supra) may not be profitable to him because Hon’ble High Court held that during pendency of a matter before CESTAT, issuance of show-cause notice on penal consequence is unwarranted. But that is not the case of appellant in the present appeal as proceeding in this case was initiated on a different premise when suppression was detected and wrong application of law was made by Authorities below. Further reliance on the decision of Tribunal in the case of Paro Food Products (supra) is also of no avail because the proceeding under appeal relating to taxability remained unchallenged while the single Bench had no jurisdiction to sit in appeal over a classification issue and also when service tax demand involved was Rs. 22,48,432/- and the appellant has presently only challenged exercise of power without challenging legality of taxation. Therefore, adjudication by the impugned order is upheld and tax demand of Rs. 5,27,018/- is confirmed which shall follow interest.
8. We have seen that due to confusion of law the appellant has travelled a long carrying the dispute to various forum. Therefore, considering genuine difficulty of the appellant, invoking provision of section 80 of Finance Act, 1994, penalty imposed under sections 76 & 78 of the Finance Act, 1994 is waived. But interest of tax demand should follow. Thus appeal is allowed partly and to the extent herein stated.