Commissioner of Central Tax Vs Big C Mobiles Pvt. Ltd. (CESTAT Hyderabad)
Summary: CESTAT Hyderabad dismissed the Revenue’s appeal against an Order-in-Original which had confirmed service tax of Rs.1,43,75,615/- for the normal period while dropping the demand attributable to the extended period. The respondent, Big C Mobiles Pvt. Ltd., was engaged in sale of mobile phones through retail outlets in Telangana and Andhra Pradesh. Proceedings had been initiated through Show Cause Notice No.20/2018-19 dated 21.12.2018 alleging non-payment of service tax on insurance coverage charges collected from customers during 2013-14 to June 2018. After adjudication, the Commissioner confirmed the demand only for the normal period and dropped the extended-period demand. Thereafter, the respondent opted for settlement under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Its declaration was accepted, the amount determined was paid and Form SVLDRS-4 dated 10.02.2020 was issued as a discharge certificate for full and final settlement. The Tribunal held that the legal effect of such certificate, particularly under Section 129 of the Finance Act, 2019, was to bring finality to the matter and period covered by the declaration. It relied upon Astute Valuers and Consultants Pvt. Ltd. Vs Union of India (Bombay High Court), where continuation of proceedings after issuance of a discharge certificate was held inconsistent with the object and statutory finality of the Scheme. The Tribunal also independently examined limitation. The Show Cause Notice dated 21.12.2018 was the fifth notice involving substantially similar issues, and earlier notices had already been adjudicated. Therefore, the Department was fully aware of the respondent’s accounting method, collection of insurance charges and service-tax treatment. Relying upon Nizam Sugar Factory Vs Collector of Central Excise, A.P., the Tribunal held that once relevant facts were already within the Department’s knowledge through earlier notices, suppression could not be alleged again for invoking the extended period. The Tribunal consequently held that the SVLDRS discharge certificate rendered the departmental appeal unsustainable and, even otherwise, the Commissioner had correctly restricted the demand to the normal period. Revenue’s appeal was dismissed.
