S.I. Advertisers Vs Commissioner of Central Excise & CGST (CESTAT Allahabad)
Summary: The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, allowed the appeal of M/s S.I. Advertisers against a service tax demand of Rs.13,36,206/- sustained by the Commissioner (Appeals). The dispute concerned the extended limitation period invoked in a second show cause notice issued for financial year 2016-17, when the Department had already issued an earlier notice based on similar facts for financial year 2015-16. The first notice dated 28 December 2020 proposed a demand of Rs.1,51,99,322/- for 2015-16. That demand was dropped by the Additional Commissioner on 15 March 2023 and the Revenue did not appeal. The second notice dated 7 October 2021 proposed Rs.1,76,76,097/- for 2016-17. The Commissioner (Appeals) subsequently set aside Rs.1,63,39,891/- but sustained Rs.13,36,206/-.
The appellant submitted that it earned a commission of 15% from print-media advertising and had paid service tax on that commission. It argued that the gross receipts appearing in its income-tax return and profit and loss account were not entirely taxable. The appellant also relied on the negative-list treatment of sale of advertising space in print media under Section 66D of the Finance Act, 1994. It contended that regular ST-3 filings and the earlier notice established departmental knowledge of the transactions. The Tribunal found that the Department already possessed the material facts when issuing the first notice. Accordingly, the same or similar facts could not support a fresh allegation of suppression in the subsequent notice for invoking the extended limitation period. It also observed that the Commissioner (Appeals) had not addressed the limitation objection.
Relying on the principles reflected in the cited judgments, the Tribunal held that the extended period was not available in these circumstances. It set aside the impugned order and allowed the appeal with consequential benefits, if any, in accordance with law. The decision turned on limitation rather than a fresh determination of the entire taxable value.
Cases Discussed
- Nizam Sugar Factory Vs. Collector of Cen. Ex., AP— 2006 (197) E.L.T. 465 (SC)
- CAPRIHANS India Ltd. Vs. Commissioner of Central Excise, Surat — 2015 (324) E.L.T. 8 (SC)
- Vandana Global Ltd. Vs. Commissioner of C.Ex. & S.T., Raipur — 2022 (382) E.L.T. 247 (Tri.-Del.)
- J.K. Enterprises Vs. Principal Commissioner, Central Excise, Alwar — 2023 (70) G.S.T.L. 297 (Tri.-Del.)
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
The Appellant, in the present appeal, has assailed the Order-in-Appeal No.546-ST/APPL/LKO/2023 dated 13.07.2023 passed by the learned Principal Commissioner (Appeals) whereby he has upheld the demand of Rs.13,36,206/- and set-aside the demand of Rs.1,63,39,891/-.
2. Briefly stated, the facts of the case are that the Appellant received two Show Cause Notices1 as under :-
(i) SCN No.59/JC/LKO/2020-21 dated 28.12.2020 for Rs.1,51,99,322/- for the period 2015-16. Service Tax Appeal No.70642 of 2024
(ii) SCN No.93/JC/CGST/LKO/2021 dated 07.10.2021 for Rs.1,76,76,097/- for the period 2016-17.
3. The demand raised under the first SCN dated 28.12.2020 has been dropped by the Additional Commissioner vide his order dated 15.03.2023 and Revenue has not preferred any appeal. The subsequent SCN dated 07.10.2021 has been confirmed by the Additional Commissioner vide his order dated 28.02.2023 against which the Appellant had preferred appeal before the learned Commissioner (Appeals) who upheld only a part of demand of Rs.13,36,206/- and dropped the demand of Rs.1,63,39,891/-. The reason for dropping the demand was that the SCN’s were issued on the basis of gross amount shown in the ITR/P&L A/c and not on taxable value which is commission i.e. 15% of the total amount billed by the Appellant. The Appellant had already discharged the Service tax liability on the commission received. The instant appeal before the Tribunal is against Rs.13,36,206/- as upheld by the learned Commissioner (Appeals) vide the impugned Order-in-Appeal dated 13.07.2023.
4. The Ld. Advocate appearing for the Appellant submitted that the demand for the year 2016-17 issued vide subsequent Notice dated 07.10.2021 is barred by limitation because Department was fully aware of the facts and activity of the Appellant when it issued the first SCN dated 28.12.2020 for the period 2015-16. Hence, the subsequent SCN dated 07.10.2021 for the year 2016-17 invoking the extended period of limitation on the similar and identical grounds based on the information provided by the Income Tax Department, would not be sustainable. He has also explained the following grounds for application of bar of limitation:-
(a) The Appellant has regularly filed ST-3 returns and the department has assessed the tax liability on the total gross receipts shown in ITR/P&L Account without making any enquiry and not on the taxable value which is the commission received by the Appellant from print media. Service Tax Appeal No.70642 of 2024
(b) The Appellant is liable to discharge its tax liability only on the component of taxable value and not on the total gross receipts shown in the Profit & Loss a/c. The sale of space for advertisement in print media which is covered under Negative List of Services under Section 66D of the Finance Act, and therefore, the amount which has been passed on to the Print Media will not attract tax.
5. The learned Advocate has further submitted that the instant issue is no more res-integra and is settled by the Hon’ble Supreme Court in the following cases:- (a) Nizam Sugar Factory Vs. Collector of Cen. Ex., AP 2006(197) E.L.T. 465 (SC). (b) CAPRIHANS India Ltd. Vs. Commissioner of Central Excise, Surat 2015 (324) E.L.T. 8 (SC).
6. He further added that the Tribunal has followed the above ratio in the following cases and set-aside the demand beyond the normal period of limitation:-
(a) J.K. Enterprises Vs. Principal Commissioner, Central Excise, Alwar 2023 (70) G.S.T.L. 297 (Tri- Del).
(b) Vandana Global Ltd. Vs. Commissioner of C.Ex. & S.T. Raipur 2022 (382) E.L.T. 247 (Tri-Del).
7. Heard both the sides and perused the appeal records.
8. We now proceed to take up the issue of limitation raised by the Appellant. We find that the Appellant has been regularly filing the ST-3 returns and were issued the SCNs consecutively for the year 2015-16 and 2016-17. We also find that all the necessary information were available to the Department on the basis of which first SCN was issued, and the Department should have issued the subsequent SCN for the normal period and thus a subsequent SCN invoking the extended period of limitation alleging suppression of facts is not sustainable. The Ld. Service Tax Appeal No.70642 of 2024 Commissioner (Appeals) has not addressed this issue of limitation in his order and it is totally silent on limitation. We also find that the Hon’ble Supreme Court, Hon’ble High Courts and the Tribunal have already examined this issue time and again and held that allegation of suppression of facts against the assessee could not be sustained if all the relevant facts were in the knowledge of the Department. We also find that the Appellant was regularly filing ST-3 returns and therefore while issuing second SCN, the same/similar facts could not be taken as suppression of facts on the part of the Appellant as these facts were already in the knowledge of the authority.
9. In view of the above discussions and the judgements cited supra, it is evident that there would be no suppression of facts on the part of assessee if the facts were already in the knowledge of the Department when the first SCN was issued.
10. In view of the above, we find that same and similar set of facts could not be taken as the basis for suppression of facts on the part of the Appellant in the instant SCN dated 07.10.2021 and the respondents were not justified in invoking the extended period of limitation.
11. The impugned order is set aside and the appeal filed by the Appellant is allowed, with consequential benefits, if any, as per law.
(Order pronounced in open court on -19.05.2026)
Notes:
1 SCN
