Custom, Excise & Service Tax Tribunal
Western Up Chamber Of Commerce And ... vs Meerut-I on 13 November, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.II
Service Tax Appeal No.70649 of 2025
(Arising out of Order-in-Appeal No.MRT/EXCUS/000/APPL-MRT/171/2023-24
dated 24/11/2023 passed by Commissioner (Appeals) Central Goods &
Services Tax, Meerut)
M/s Western U.P. Chamber of Commerce &
Industries, .....Appellant
(Bombay Bazar, Near Hanuman
Chowk, Meerut Cantt., Meerut)
VERSUS
Commissioner of Central Excise &
CGST, Meerut-I ....Respondent
(Mangal Pandey Nagar, Meerut) APPEARANCE:
None, for the Appellant Shri Manish Raj, Authorised Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70824/2025 DATE OF HEARING : 13 November, 2025 DATE OF DECISION : 13 November, 2025 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.MRT/EXCUS/000/APPL-MRT/171/2023-24 dated 24/11/2023 passed by Commissioner (Appeals) Central Goods & Services Tax, Meerut. By the impugned order following has been held:-
"5.8 Therefore, in light of the foregoing facts and findings, I opine that the total amount of Service Tax short-paid by the appellants during April 2015 to June 2017 is Rs.
1,21,676/-and the same is liable to be demanded and recovered from the appellants, along with the accrued amount of interest, by invoking the extended period of Service Tax Appeal No.70649 of 2025 2 time limitation, and equal penalty under the provisions of Section 78 of the Finance Act, 1994 is liable to be imposed upon the appellants.
5.9 In the light of the discussion and findings recorded above, I uphold the impugned Order-in-Original No. 09/AC/CGST/DIV-I/MRT/2022-23 dated 25.07.2022 and reject the present appeal bearing No. 131-ST/APPL- MRT/MRT/2022-23 dated 21.09.2022 filed by M/s Western U.P. Chamber of Commerce & Industry, Bombay Bazar, Near Hanuman Chowk, Meerut (U.P.)."
1.2 By the Order-in-Original No. 09/AC/CGST/DIV- I/MRT/2022-23 dated 25.07.2022 following has been held:-
"ORDER
(a) 1 confirm the demand of Service Tax amounting to Rs.
1,21,676/-(Rs. One Lacs Twenty One Thousand Six Hundred and Seventy Six only) including cess, and order to recover the same from M/s Western UP Chamber of Commerce & Induetry. Bombay Bazar, Near Hanuman Chowk, Meerut under proviso to Section 73(1) of the Finance Act, 1994 read with Section 142(8) and Section 174(2) of CGST Act, 2017 1944:
(b) I confirm the demand of interest, payable against the said demand mentioned in clause (a) from the party, in terms of Section 75 of the Finance Act, 1994 read with Section 142(8) and Section 174(2) of CGST Act, 2017 1944.
(c) I impose a penalty of Rs.1,21,676/-(Rs. One Lacs Twenty One Thousand Six Hundred and Seventy Six only) upon M/s Western UP Chamber of Commerce & Induetry.
Bombay Bazar, Near Hanuman Chowk, Meerut in terms of Section 78 of the Finance Act, 1994 read with Section 174 of Central Goods and Service Tax Act. 2017." 2.1 The appellant was registered as service provider with Service Tax Registration No. AAACW6387MSD01, for providing/receiving taxable services under the category of taxable services namely 'Club or Association Services' and Service Tax Appeal No.70649 of 2025 3 'Convention service etc. and liable to pay service tax on the same in terms of Section 68 (1) of the Finance Act, 1994 read with Rule 6(1) of the Service Tax Rules, 1994. 2.2 During the audit of the records of the appellants for the period April 2015 to June 2017 on account of issuance of certificate of origin on which service tax has not been discharged. It was observed that appellant has received amount as detailed in table below on which service tax was not paid:-
Amount Collected for issuance Service tax Period of Certificate of Origin rate(%) Payable (Rs) 2015-16 3,33,700/- 14.50 48,386 2016-17 4,04,450/- 15 60,668 2017-18 (Apr-June) 84,150/- 15 12,622 Total 1,21,676 2.3 A show cause notice dated 19.04.2021 was issued to the appellant, asking them to show cause as to why:-
"(a) Service Tax short paid amounting to Rs. 1,21,676/-
(Rupees One Lac Twenty One Thousand Six Hundred and Seventy Six only) should not be demanded and recovered from them under the provision of proviso to section 73(1) of the Finance Act, 1994 read with Section 142(8) and Section 174(2) of CGST Act, 2017;
(b) Interest on the amount mentioned above at 9 (a) should not be charged & recovered from them under Section 75 of the Finance Act, 1994, read with Section 142(8) and Section 174(2) of CGST Act, 2017;
(c) Penalty under Section - 78 of the Finance Act on the amount shown at 9 (a) should not be imposed upon them." 2.4 The said show cause notice was adjudicated as per the Order-in-Original dated 25.07.2022 referred in para 1.2 above. 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been disposed of as per the impugned order.
2.6 Aggrieved appellant have filed this appeal. 3.1 When the matter was listed for hearing none appears on behalf of the appellant.
Service Tax Appeal No.70649 of 2025 4 3.2 As I find that the issue is very narrow compass, the matter is taken up for consideration after hearing Shri Manish Raj learned Authorised Representative appearing for the revenue, who reiterates the findings recorded in the orders of the lower authorities.
4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument.
4.2 In the present case, the demand has been challenged by the appellant only on the ground of limitation for which they have placed reliance upon the following decisions:-
Sends Hotel Pvt. Ltd. Vs CST, Mumbai 2009 (01) LCX0175; CCE Hyderabad Vs Chemphar Drugs and Liniments 1989 (02) LCX0024 (SC);
Lubri-Chem Industries Ltd. Vs CCE, Bombay 1994 (09) LCX 0094 (SC);
Padmini Products Vs CCE 1989 (08) LCX0031; Gopal Zarda Udyog & Ors. Vs CCE 2005 (09) LCX0016; Pushpam Pharmaceuticals Co. Vs CCE, Bombay 1995 (03) LCX0088 (SC);
Anand Nishikawa Co. Ltd. CCE, Meerut 2005 (09) LCX 0013;
Pushpam Pharmaceuticals Co. Vs CCE, Bombay 1995 (78) ELT 401 (SC);
Tamil Nadu Housing Board Vs CCE, Madras 1994 (09) LCX103;
CCE, Chandigarh Vs Punjab Laminates Pvt. Ltd. 2006 (202) ELT 578 (SC);
Hindustan Steel Ltd. Vs State of Orissa 1969 (08) LCX0002;
CCE, Vapi Vs Shree Shop Chemicals Ind. 2008 (05) LCX0171;
Sayaji Hotel Ltd. Vs CCE 2011 (01) LCX0230 (Tri.-Del); 4.3 To uphold the demands impugned order records as follows:-
Service Tax Appeal No.70649 of 2025 5
"5.7 Thus, regarding the contention of the appellants that the allegation of suppression of information being untenable and the subject demand being baseless on the grounds that it has been raised on the basis of the Department coming to know of the activities of the appellants through assessee only and consequently the extended period of limitation and penal provisions are not liable to be invoked in the subject case, I find that it is on the basis of the subject data garnered from the appellants' Profit & Loss Account during audit that the subject short- payment of Service Tax came to the notice of the Department. Had it not been for the disclosure of the subject data during audit, the short-payment of Service Tax would have not come to the notice of the Department for it was never the intention of the appellants to reveal the same on their own accord, as is evident from the fact that the appellants had wilfully and deliberatively not declared the same in their statutory Service Tax returns. Thus, I find that the ingredients to invoke the extended period of time limitation to raise the subject demand was intrinsically inherent in the facts of the subject case and consequently the penal provisions under Section 78 of the Finance Act, 1994 are automatically attracted. Further, I find that once it is established that ingredients to attract operation of Section 78 of the Finance Act, 1994 are present in a case, the discretion to quantify the amount of penalty ends. Accordingly, equivalent penalty under Section 78 has rightly been imposed upon the appellants. Hence, as regards imposition of penalty upon the appellant under the provisions of Section 78 of the Finance Act, 1994, I find that the foregoing findings unambiguously establish the same. However, corroborative reliance is placed upon the pronouncement made in the following cases:
(i) Inox Leisure Limited Vs Commissioner of Service Tax, Mumbai [2016 (42)STR 497 (Trib-Mumbai)]:: Held ::
Service Tax Appeal No.70649 of 2025 6 Demand - Limitation - Extended period -Invocation of - Suppression of facts - Responsibility cast on appellant to furnish details to authorities at prescribed frequency under Rule 7 of Service Tax Rules, 1994 and declare services rendered, assess tax due and make payment of Service Tax by due date - Non-payment of Service Tax came to light in pursuance to investigation Extended period of limitation sustainable There being suppression of fact, penalty under Section 78 of Finance Act, 1994 warranted - Interest payable Appropriate penalties under Sections 76, 77 and 78 ibid payable.
This Order was upheld by the Hon'ble Supreme Court and in its judgement the Learned Court held that Demand - Limitation Extended period invocable for failure of registered assessee to fumish details and to pay Service Tax under the Rule [2016 (44) STR J 276 (SC)];
(ii) Cairn Energy India Pvt. Ltd. Vs CCE & Cus., Visakhapatnam-II [2019 (27) G.S.T.L. 363 (Tri. Hyd.)]:
Held: Demand - limitation - Extended period of Assessee violating conditions of Finance Act, 1994 and Rules and failed to pay Service Tax with intent to evade tax - Extended period of limitation applicable [Affirmed in 2020 (32) GSTL J40 (Supreme Court)]
(iii) Lakhan Singh & Co. Vs CCE, Jaipur [2016(46)STR 297 (Trib-Delhi)] :: Held :: Demand-Limitation - Suppression-
Suppression with intent to evade payment of duty It is seldom done by actions leaving trails Hence, "positive act of suppression cannot be something which can always be demonstrated through existence of a physical thing or document - It is about state of mind, which has to be judged from facts of case - Demand - Limitation - Suppression - Under self-assessment scheme, onus of assessee to disclose information to department has become more important - Demand-Limitation - Suppression - If ignorance of law is not a defence, wrong understanding of law can be a much lesser defence, Service Tax Appeal No.70649 of 2025 7
(iv) Prathyusha Associates Shipping P. Limited Vs CCE, C & ST, Visakhapatnam-1 [2014 (36) STR 1145 (Trib-Bang)]::
Held: Demand -Limitation Extended period Where the responsibility of assessment is on assessee and not on the department, no one has the liberty to make assumption about the liability - Extended period of limitation invokable;
(v) R S Joshi Vs Ajit Mills [AIR1977SC2279 = (1977)40STC4971979UPTC171 (SC 7 Member Bench)]::
Held :: "in economic crimes and departmental penalties, 'mens rea' is not essential for imposing penalty;
(vi) UOI Vs Dharamendra Textile Processors [2008 (231) ELT 3 (SC)] :: Held :: "Penalty - Mandatory penalty Lesser penalty not imposable No discretion available on quantum of penalty under Section 11AC of Central Excise Act, 1944
- Mens rea not an essential ingredient thereunder" [Parallel provisions in Service Tax matters):
(vii) CCE & C, Aurangabad Vs Padmashri V. V. Patil S.S.K. Limited [2007 (215) ELT 23 (Bom)]:: Held:: Penalty Quantum of Evasion of excise duty -Discretion to reduce mandatory penalty Section 11AC of Central Excise Act, 1944 providing for imposition of penalty equal to duty -
Impugned Section 11AC ibid penal in nature and applicable when non-payment or short payment due to fraud, collusion, wilful misstatement or suppression of facts with intent to evade duty-Discretion to impose lower penalty than equal amount not provided - Penalty payable at 25% if duty determined paid within thirty days and no discretion to reduce 25% penalty in such cases - Supreme Court confirming Tribunal decision in 2003 (161) ELT 285 rendered before amendment to relevant provisions Penalty equal to duty imposable from 11-5-2001 if duty demand confirmed for intentional evasion Section 11AC ibid. [Parallel provisions in Service Tax matters):
(viii) UOI Vs Rajasthan Spinning & Weaving Mills [2009 (238) ELT 3 (SC)] :: Held :: Penalty - Mandatory penalty Service Tax Appeal No.70649 of 2025 8 under Section 11AC of Central Excise Act, 1944 not applicable to every case of non-payment or short-payment of duty - Conditions mentioned in Section 11AC ibid should exist for penalty thereunder - Authorities having no discretion on quantum and penalty equal to duty must be imposed once Section 11AC ibid is applicable. [Parallel provisions in Service Tax matters)."
4.4 I find that the entire case is made against the appellant on the basis of figures taken from the profit and loss account of the appellant. The fact that appellant was providing these taxable services were well within the knowledge of the department, as is evident from the Circular No.145/14/2011-ST dated 19.08.2011 which has been reproduced in the order in original at para 4.3 and is reproduced below:
"2. These representations have been examined. Service provided by a Chamber of Commerce by way of issuance of COOC appears to fall under two different headings, namely, „club or association service‟ [Finance Act, 1994, section 65(105)(zzze)], or „technical inspection or certification service‟ [Finance Act, 1994, section 65(105)(zzi)]. It is well known that in our country, Chambers of Commerce, Export Promotion Councils (EPC), some Trade Associations have been authorised by the Government to issue COOC to the exporters. General practice followed is that the exporter makes an application to the Chamber or any authorised agency for issuance of COOC, in the prescribed form, along with a copy of commercial invoice and other documents and pays the prescribed fees. On the basis and verification of the information provided in the application for COOC and the supporting documents with reference to the goods sought to be exported, the Chamber or the authorised agency issues a COOC.
3. The above activity carried out by the Chambers, involving certification of the national character of the Service Tax Appeal No.70649 of 2025 9 export goods, squarely falls under „technical inspection or certification‟, as defined in section 65(108) of Finance Act, 1994. In certain cases, when COOC is issued with reference to national character of the goods upon examination of the origin of their composition, requirements of the definition provided in section 65(108) of Finance Act, 1994 is clearly fulfilled. A chamber or EPC or Trade Association which issues COOC acts as a technical inspection and certification agency, and issuance of COOC attracts service tax under „technical inspection and certification agency‟ service, which is a specific description when compared to a general description like „club or association service‟, by the application of the principles of classification provided in section 65A of Finance Act, 1994."
4.5 As the appellant is a chamber of commerce and were issuing the certificate of origin in accordance with circular dated 19.08.2011 and the fact that it attracted levy of service tax was not in dispute. Appellant being registered and were also filing ST-3 returns as required. It was just for the reason that certain amounts were not reflected in the ST-3 returns the same cannot made a charge for invocation of extended period of limitation as has been held in the case of M/s Anand Nishikawa Co. Ltd. Vs CCE, Meerut 2005 (188) E.L.T. 149 (S.C.) wherein Hon'ble Supreme Court has held as follows:-
"26. In Tata Iron & Steel Co. Ltd. v. Union of India & Ors. [1988 (35) E.L.T. 605 (S.C.)], this Court held that when the classification list continued to have been approved regularly by the department, it could not be said that the manufacturer was guilty of "suppression of facts". As noted herein earlier, we have also concluded that the classification lists supplied by the appellant were duly approved from time to time regularly by the Excise authorities and only in the year 1995, the department found that there was "suppression of facts" in the matter Service Tax Appeal No.70649 of 2025 10 of post-forming manufacturing process of the products in question. Furthermore, in view of our discussion made herein earlier, that the department has had the opportunities to inspect the products of the appellant from time to time and, in fact, had inspected the products of the appellant. Classification lists supplied by the appellant were duly approved and in view of the admitted fact that the flow-chart of manufacturing process submitted to the Superintendent of Central Excise on 17-5-1990 clearly mentioned the fact of post-forming process on the rubber, the finding on "suppression of facts‟‟ of the CEGAT cannot be approved by us. This Court in the case of Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay [1995 Supp (3) SCC 462], 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 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 Service Tax Appeal No.70649 of 2025 11 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. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to the CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts". In Densons Pultretaknik v. Collector of Central Excise [2003 (11) SCC 390], this Court held that mere classification under a different sub-heading by the manufacturer cannot be said to be willful mis-statement or "suppression of facts". This view was also reiterated by this Court in Collector of Central Excise, Baroda v. LMP Precision Engg. Co. Ltd. [2004 (9) SCC 703].
4.6 I find that it is a settled position in law that for invocation of extended period of limitation, failure to declare cannot be said to be suppression with intend to evade payment of taxes. Some more positive act is required to allege the same. Further, I also observed that appellant was declaring the figures in the profit and loss account and the demand has been worked out only on the basis of the figures declared in the said profit and loss account, that being so the charge of suppression with intent to evade payment of taxes cannot be made against the appellant. In case of Hindustan Cables Ltd. [] Hon'ble Kolkata High Court observed as follows:
10.After we have elaborately heard the Learned Counsels for the parties and carefully perused the materials placed on record, we have no hesitation to hold Service Tax Appeal No.70649 of 2025 12 that the order passed by the Tribunal was just and proper and does not call for any interference. We support such conclusion with the following reasons. Firstly, to invoke the power under Section 11A that is to invoke the extended period of limitation there should be a clear finding of wilful misstatement or suppression on the part of the assessee with an intent to avoid payment of duty. On perusal of the show cause notice we find there is absolutely no such allegation against the assessee and this aspect of the matter is not disputed by the revenue. The allegation against the assessee was that of not properly maintaining the register required to be maintained in terms of Rule 57F(2) of the Rules. If such is the allegation against the assessee, the adjudicating authority committed a serious error in invoking the power under Section 11A of the Act. A reading of the show cause notice clearly shows that the information was gathered from the registers and challans maintained by the assessee and the show cause notice is not on account of any discovery of new facts by the department either by conducting an inspection or based on intelligence. Therefore, the Tribunal was right in holding that the extended period of limitation could not have been invoked by the authority.
4.7 In case of Jharkhand State Cricket Association [(2024) 23 Centax 432 (Tri.-Cal)] Kolkata Bench held as follows:
"7.3. In this regard, we observe that the demand has been raised in the notice on the basis of Annual Report for the year 2008-09 to 2013-14 which is published every year and the Ledger A/c maintained by them. When the demand is raised on the basis of the books of accounts maintained by the appellant, extended period cannot be invoked. This view has been held in the case of Commissioner of C.Ex. v. Hindustan Cables Ltd. 2022 (382) E.L.T. 188 (Cal.) wherein the Hon'ble Calcutta High Court has held that when Show Cause Notice issued is on Service Tax Appeal No.70649 of 2025 13 the basis of book of accounts maintained by the assessee and not discovery of new facts by Department, extended period of limitation cannot be invoked. We observe that the same view has been held in the case of U.T Ltd. v.
Commissioner of C.Ex. reported in (2001) 130 E.L.T 791 (Tri. - Kol.), wherein it is held that when demand is based on balance sheet which is a published document, no intention to suppression fact can be imputed and extended period of limitation. Similar views have been expressed in the case of Rolex Logistics Pvt. Ltd. v. Commissionerof C.Ex. [2009 (13) S.T.R. 147 (Tri. - Bang).
7.4. By relying on the decisions cited above, we hold that the demands confirmed in the impugned order for the extended period of limitation is not sustainable. No penalty is imposable as suppression of fact with intention to evade the tax is not established in this case."
4.8 Accordingly, I do not find any merits in the impugned order confirming demand against the appellant by invoking the extended period of limitation.
5.1 Appeal is allowed.
(Dictated and pronounced in open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp