Custom, Excise & Service Tax Tribunal
Lomesh Kumar vs Cgst Ghaziabad on 24 September, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70317 of 2024
(Arising out of Order-in-Appeal No.GZB-EXCUS-000-APPL-MRT-146-23-24
dated 30/10/2023 passed by Commissioner (Appeals) Central Goods &
Service Tax, Meerut)
M/s Lomesh Kumar (DAPL), .....Appellant
(KA-41, Karpuri Puram,
Govind Puram, Ghaziabad-201013)
VERSUS
Commissioner of Central Excise &
CGST, Ghaziabad ....Respondent
(Commissionerate, CGST, Ghaziabad) APPEARANCE:
Shri Rajesh Chhibber, Advocate for the Appellant Shri A.K. Choudhary, Authorised Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70870/2024 DATE OF HEARING : 24 September, 2024 DATE OF DECISION : 24 September, 2024 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.GZB- EXCUS-000-APPL-MRT-146-23-24 dated 30/10/2023 passed by Commissioner (Appeals) Central Goods & Service Tax, Meerut. By the impugned order Order-in-Original dated 25.04.2022 has been upheld by holding as follows:-
"Order
(i). I confirm the demand of Service Tax amounting Rs.
2068479/- (Incl. Ed. Cess & H.& S. Ed. Cess) (Rupees Twenty Lakh Sixty Eight Thousand Four Hundred Seventy Nine Only) against M/s LOMESH KUMAR (PROP. DAPL ASSOCIATES), KA-41, HIGH DUPLEX, KARPURIPURAM, Service Tax Appeal No.70317 of 2024 2 GOVINDPURAM, GHAZIABAD, UTTAR PRADESH under the provisions of Section 73(1) of the Finance Act, 1994 by invoking the extended period of time limitation and order to recover the same from them alongwith interest payable under the provisions of Section 75 of the Finance Act, 1994.
(ii). I impose a penalty of Rs. 2068479/-. (Rupees Twenty Lakh Sixty Eight Thousand Four Hundred Seventy Nine Only) upon the said party under the provisions of Section 78 of the Finance Act, 1994.
(iii). I impose a penalty of Rs. 10,000/- (Rupees ten Thousand Only) upon the said party under the provisions of Section 77 (1) of the Finance Act, 1994 for failure to furnish the information / documents called for by the Range Superintendent"
2.1 Appellant is engaged in providing taxable services and is registered with the department.
2.2 During the course of verification and on the basis of third party data received from the Income Tax Department for the financial year 2014-15, it was observed that appellant has received an amount of Rs.1,67,35,265/- for the services provided. However, they did not discharge any service tax in respect of the same.
2.3 To ascertain the tax liability party was asked to submit their ITRs, 26 AS, Balance Sheet, Bank Account Statement, Sale Bills & ST-3 returns for the F.Y. 2014-15. Despite reminders/summons, no response was received by the appellant. 2.4 Thereafter, service tax liability was computed on the basis of information received from the Income Tax Department as in the table bellow:-
TABLE-'A' F.Y. Value of Value of Differential Service Tax Services as Service, as Value (Incl. Ed.
per ITR per ST-3 Services of Cess & H.&
Return S.Ed. Cess)
@12.36%
1 2 3 4 5
2014-15 16735265 0 16735265 2068479
2.5 Show cause notice dated 29.12.2020 was issued to the
appellant asking them to show cause as to why-
Service Tax Appeal No.70317 of 2024 3 "(i) The amount of Service Tax Rs. 20,68,479/- (Rupees Twenty Lac Sixty Eight Thousand Four hundred Seventy Nine) including (Ed. Cess & H & S.Ed. Cess) should not be demanded and recovered from them under provision to Section 73 (1) of Finance Act, 1994 read with Section 174 of the CGST Act 2017,
(ii) Interest on the above amount should not be demanded and recovered from them under section 75 of the finance Act, 1994 read with Section 174 of the CGST Act, 2017.
(iii) Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 read with section 174 of the CGST Act, 2017 as they have not disclosed true detail of services provided by them to the department with intent to evade payment of service tax as discussed supra.
(iv) Penalty should not be imposed upon them under Section 77 of the finance Act, 1994 read with Section 174 of the CGST Act 2017 as they have not shown true details of services provided and deposit particulars in any document as discussed supra."
2.6 The said show cause notice was adjudicated as per the Order-in-Original dated 25.04.2022 referred in para 1 above. 2.7 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed as per the impugned order. 2.8 Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Rajesh Chhibber learned Counsel appearing for the appellants and Shri A.K. Choudhary learned Authorised Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that-
Show cause notice was issued in mechanical manner as in the 26AS, certain amount pertained to interest paid by OBC Bank which has been considered as income in the Income Tax Department and solely this demand was considered as consideration for services provided. For the period April to September, 2014 the demand was issued for a period beyond 5 years. Hence, the same is barred by limitation also.
Service Tax Appeal No.70317 of 2024 4 Entire services were for construction/repair of roads and development work between the LIG houses and Government authorities and not for any industrial or commercial work. In the present case all constructions were awarded prior to 2014-15 and were exempt from service tax in terms of Notification No.25/2012 dated 20.06.2012.
The benefit of exemption has been denied on the ground that appellant did not submit all evidences, interestingly, the demand has been confirmed even in respect of the services for which evidences were produced all the documents for the period of demand has been enclosed with the appeal.
Show cause notice demanded service tax solely on the basis of value declared in ITR which was classifying the services under any category of Finance Act, 1994. No provision has been coated in the show cause notice or in the impugned orders for making the demand of service tax at higher rate even in absence of data. Reliance is placed on the following decisions:-
o 2022(1)Centax54 (Tri Ahmd) : Forward Resources P. Ltd.
o 2022(1)Centax 57 (Tri. Ahmd.) : Vatsal Resources P. Ltd.
o Final Order no.71246/2019 : Pappu Crane Services Extended period would not have been invoked in the present case.
The issue could only be in respect of interpretation. All the services in respect of this amount were received in respect of road works, siverline, water line, etc. for which the relevant contracts, which work orders has been enclosed, are exempted from service tax. 3.3 Learned Authorised Representative reiterates the findings recorded in the orders of the lower authorities.
4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument.
Service Tax Appeal No.70317 of 2024 5 4.2 For upholding Order-in-Original, impugned order records as follows:-
"4.2 I find that the subject Order dated 25.04.2022 has been statedly received by the appellant on 28.05.2022 and the subject appeal has been filed on 17.08.2022. Further, together with the subject appeal an application for condonation of the delay of filing of the appeal has also been filed. As regarding provisions of filing appeals before the appellate authority, I find that Section 85 of the Finance Act, 1994, sub-section (3A) thereof, stipulates that "An appeal shall be presented within two months from the date of receipt of the decision or order of such adjudicating authority, made on and after the Finance Bill. 2012 receives the assent of the President, relating to service tax, interest or penalty under this Chapter: Provided that the Commissioner of Central Excise (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to be presented within a further period of one month" In this regard, I also find that under Section 3(35) of the General Clauses Act, 1897 'month' has been defined to mean a month reckoned according to the British calendar. Thus, I find that in respect of the order dated 25.04.2022, so received by the appellant on 28.05.2022, the filing of the subject appeal on 17.08.2022 is beyond the statutorily stipulated time period of two months and is delayed by TWENTY ONE days. In this regard 1 find that in their application for condonation of delay the appellant has cited confusion with respect to time period for filing of the appeal as the reason for the said delay. In this regard, in terms of the settled legal axiom that ignorance of law cannot be an excuse for default in statutory compliances, 1 find that the appellant has failed to put forth valid and cogent reasons/explanations which prevented them in filing the subject appeal within the stipulated time. Devoid of cogent explanation on the part of the appellant for the said delay in filing of the subject Service Tax Appeal No.70317 of 2024 6 appeal, I find the subject appeal to be hit be time limitation. In this regard, I find support from the pronouncements made in the following cases wherein the importance of valid reasons for condonation of delay have been highlighted.
(i) In Re: J.S. Designer Ltd. [ 2018 (364) E.L.T. 1183 (G.O.I.)]: Held: Revision- Limitation - Delay in filing -
Condonation of-Delay as file was misplaced - Reason vague, casual and cannot be considered as sufficient cause as keeping documents was entirely within assessee's control- Delay due to lack of seriousness and not covered by term sufficient cause- Application time barred - Section 35EE(2) of Central Excise Act, 1944.
(ii) CCE Vs. Bharat Bijlee Ltd. [2017 (346) E.L.T. 553 (Bom.)]: Held: Appeal to High Court-Delay in filing- Condonation-Since reasons for delay are neither reasonable nor satisfactory, Department's appeal dismissed - Section 35G of Central Excise Act, 1944.
(iii) Rajlaxmi Petrochem Pvt. Ltd. Vs. CCE, Aurangabad [2013 (289) E.L.T. 171 (Tri. Mumbai)]: Held: Appeal- Limitation-Delay in filing-Condonation of-Assessee gave reason that concerned clerk kept the impugned order in the file and did not bring it to the notice of the Management - Negligence of employee not sufficient cause for not filing the appeal within normal period of limitation - Section 35B(5) of Central Excise Act, 1944.
(iv) Abdul Sattar Moulvi Vs. Commr. Of Customs, CSI Airport, Mumbai [2011 (264) E.L.T. 559 (Tri. - Mumbai)]:
Held: Appeal to Appellate Tribunal - Limitation - 30 days delay in filing appeal Condonation of Reason stated that appellant was mentally disturbed and under continuous stress and hence could not pursue appellate remedy, remaining unsubstantiated - No explanation for delay in filing the appeal - Application dismissed-Section 129A.
(i) Commissioner of Customs (Imports), Chennai Vs. Archean Granites Pvt. Ltd. [2011 (264) E.L.T. 290 (Tri.
Chennai)): Held: Appeal to Appellate Tribunal - Limitation -
Service Tax Appeal No.70317 of 2024 7 Delay in filing appeal-Reasons for condonation of delay stated as the case being sensitive, proper care made in deciding quantum of ground of appeal and that delay is unintentional - Not obvious, how case sensitive when lower appellate authority had asked original authority to hear and pass speaking order - Reasons given highly unsatisfactory Not a fit case for condoning delay - Section 1294 of Customs Act, 1962.
(ii) Kakda Rolling Mills Vs. CCE, Bhopal [2009 (238) E.L.T. 688 (Tri. - Del.)]: Held : Appeal to Appellate Tribunal- Limitation-Condonation of delay in filing-Property dispute amongst partners is not a sufficient cause for condoation of delay - Section 35B(3) of Central Excise Act, 1944.
(iii) CCE, Vapi Vs. Daman Ganga Board Mills P. Ltd. [2008 (232) E.L.T. 880 (Tri. - Ahmd.)]: Held: Appeal Limitation Delay in filing appeal Condonation of- Documents pertaining to case not traceable, causing delay as submitted by Revenue - No explanation given as regards which kind of document not traceable - No justifiable reason given by Revenue Application for condonation of delay in filing appeal dismissed-Section 35B of Central Excise Act, 1944. 4.3 Further, I find that that as per the provisions of Section 35F of the Central Excise Act, 1944, as made applicable to service tax matters vide Section 83 of the Finance Act, 1994, proof of mandatory pre-deposit of seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, has to be submitted while filing the appeal under the provisions of Section 85 of the Finance Act, 1994. In this regard, I find that the appellant had furnished DRC- 03 bearing ARN AD090822024103G dated 17.08.2022 regarding deposition of Rs.1,55,136/- towards mandatory pre-deposit. As, in terms of Instruction bearing No.CBIC- 240137/14/2022-SERVICE TAX SECTION-CBEC dated 28 10.2022 it stood clarified that payments through DRC-03 under CGST regime is not a valid mode of payment for making pre- deposits under section 35F of the Central Excise Act, 1944 and Section 83 of Finance Act. 1994 read Service Tax Appeal No.70317 of 2024 8 with section 35F of the CEA, so vide letters bearing even C. Nos. 274 dated 25.05.2023, 362 dated 03.07.2023 and 423 dated 12.07.2023 the appellant was inter alia requested to submit the requisite challan regarding deposition of mandatory pre-deposit amount under appropriate service tax head of account. In compliance the appellant submitted copy of the requisite challan bearing CIN 20230707183209803774 dated 07.07.2023 for Rs. 1,55,136/- [7.5% of Rs.20,68,479/- Rs 1,55,135.93] on 24.07.2023 and thus, I find that the said condition envisaged under Section 35F of the Central Excise Act, 1944, as made applicable to service tax matters vide Section 83 of the Finance Act, 1994, stands fulfilled by the appellant.
4.4 The genesis of the subject case is vested in the third- party data received from Income Tax Department for the financial year 2014-15 wherefrom it was observed that the value of taxable services provided by the appellant as per their Income Tax Return for 2014-15 was Rs. 1,67,35,265/- whereas the gross value of the taxable services declared in their respective ST-3 returns was NIL Accordingly, it became apparent that during the period 2014-15 the appellant had suppressed the value in their ST-3 returns by Rs. 1,67,35,265/- and had thereby short paid service tax, in total amounting to Rs 20,68,479/- which appeared liable to be demanded and recovered from them, along with interest, by invoking the extended period of time limitation together with imposition of penalties under the provisions of Section 78 and Section 77 of the Finance Act, 1994. Accordingly, a Show Cause Notice bearing S No. 26/SCN/D-III/GZB/20 dated 29.12.20 was issued against the appellant. The SCN dated 29.12.20 has been adjudicated by the Assistant Commissioner, Division III, Central Goods and Services Tax Commissionerate, Ghaziabad vide Order-in-Original No. 08/AC/S.Tax/Div-III/GZB/2022-23 dated 25.04.2022 where vide the adjudicating authority has confirmed the demand of service tax amounting to Rs 20,68,479/- [Rupees Twenty Service Tax Appeal No.70317 of 2024 9 Lakh Sixty Eight Thousand Four Hundred Seventy Nine only), along with interest, respectively under the provisions of Section 73 and Section 75 of the Finance Act, 1994, by invoking the extended period of time limitation, and equivalent amount of penalty under the provisions of Section 78 and penalty of Rs. 10,000/- under provisions of Section 77(1) of the Finance Act, 1994 have been imposed upon the appellant. In passing the subject order and confirming the demand along with interest and penalties the adjudicating authority has inter alia observed that the appellant has failed to factually and documentarily establish their claim of having provided exempted services of construction of road.
4.5 The appellant has filed the subject appeal mainly on the following grounds :: (1) that, they had provided services regarding construction of road and the same were exempted; (ii) that, otherwise too they had rendered works contract service and the benefit of N. No. 24/2012- ST (regarding abatement) and 30/2012-ST dated 20.06.2012 (regarding liability of 50% tax being on service recipient) is admissible to them, and (iii) the demand based on data received from Income Tax Department being vague and hence extended period of time limitation and penal provisions not being invokable and the demand has also been issued beyond the five years period.
4.6 As regarding services of maintenance of road, as claimed to have been done by the appellant, I find that entry no. 13(a) of Notfn. No. 25/2012-ST stipulated exemption to "Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) a road, bridge, tunnel, or terminal for road transportation for use by general public". As regarding activities constituting construction/repair and maintenance of road, I find that the Board vide its Circular No. 110/4/2009-S.T., dated 23-2- 2009 has clarified as hereunder:
Service Tax Appeal No.70317 of 2024 10 Representations have been received by the Board pointing out divergent practices being followed by field formations with regard to levy of service tax on maintenance and repair of roads.
2. Commercial or industrial construction service (section 65(105)(zzq)) specifically excludes construction or repairs of roads. However, management, maintenance or repair provided under a contract or an agreement in relation to properties, whether Immovable or not, is leviable to service tax under section 65(105)(zzg) of the Finance Act, 1994.
There is no specific exemption under this service for maintenance or repair of roads etc. Reading the definitions of these two taxable services in tandem leads to the conclusion that while construction of road is not a taxable service, management, maintenance or repair of roads are in the nature of taxable services, attracting service tax.
3. The next issue requiring resolution is the types of activities that can be called as "construction of road" as against the activities which should fall under the category of maintenance or repair of roads.
In this regard the technical literature on the subject indicate that the activities can be categorized as follows, - (A) Maintenance or repair activities:
I. Resurfacing II. Renovation III. Strengthening IV. Relaying V. Filling of potholes (B) Construction Activities:
I. Laying of a new road II. Widening of narrow road to broader road (such as conversion of a two lane road to a four lane road) III. Changing road surface (graveled road to metalled road/ metalled road to blacktopped/blacktopped to concrete etc. Service Tax Appeal No.70317 of 2024 11
4. The cases may be decided/revenue should be protected based on the above classification. Suitable Trade and Public notices may be issued for information of the trade and field formations. 4.7 In the instant case, I find that the appellant in support of their claim has given copies of some extract copy of contract documents, quantity bills, etc. However, I find that the appellant has not submitted the requisite copies of complete contracts with the detailed description of work executed as also copies of invoices raised by them and the evidence of payments received by them in respect of the said claimed exempted services and the essential corresponding contract-wise; invoice-wise, payment receipt- wise reconciliation sheet in respect of the entire consideration, so claimed to be in respect of exempted services. Thus, I find that the said contention of the appellant is not established factually and documentarily. As regarding the said certificate dated 07.07.2023 purportedly issued by the Executive Engineer, CD-2, PWD, Ghaziabad regarding the appellant having rendered works contract service in respect of construction of roads, I find that first, the said official of PWD is not the designated authority for claim of exemption under Notification No. 25/2012-ST dated 20.06 2012 and secondly, the said certificate cannot suffice for the said essential documents for ascertainment of the said claim of exemption viz. contracts, invoices, reconciliation statement based thereon etc. In respect of claim of exemption, it is an established fact that the same cannot be ascertained without examining each and every contract and examining scope of each work order and corresponding details. I find that it is a legally established dictum that the entity claiming exemption envisaged under any exemption notification has to prove that they are entitled for the said exemption and in this regard the sole onus of proof is vetted upon them. In this regard, I find support from the pronouncements made in the following cases:
Service Tax Appeal No.70317 of 2024 12
(i) CCE, New Delhi Vs. Hari Chand Shri Gopal (2010 (260) E.L.T. 3 (S.C.): Held : Exemption - Burden of proof-
Person who claims exemption or concession har to establish that he is entitled to that exemption or concession.
(ii) BOC India Ltd. Vs. State of Jharkhand (2009 (237) E.L.T. 7 (S.C.)]: Held:Exemption - Burden of proof-For purpose of claiming exemption from payment of tax/special rate of inx applicable to a commodity assessee must bring on record sufficient materials to show that it comes within the purview of notification.
(iii) Escorts Construction Equipment Ltd. Vs. CCE, Delhi- IV (2009 (244) E.L.T. 151 (Tri. Del.)): Held: Exemption Burden of proof-Assessee has to bring on record sufficient material showing that they come within the purview of exemption.
4.8 As regarding the contention of the appellant that the entire consideration was in respect of works contract service and the benefit of N. No. 24/2012-ST (regarding abatement) and 30/2012-ST dated 20.06.2012 (regarding liability of 50% tax being on service recipient) is admissible to them, I find that works contract service had been defined under Section 65B(54) of the Finance Act, 1994 as meaning to be a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property. In the subject case. I find that the appellant has documentarily not established that the services rendered by them qualify to be covered under "works contract service' in as much as they have not furnished the related complete contracts, work Service Tax Appeal No.70317 of 2024 13 orders etc. to inter alia prove that the said contracts also involved transfer of property in goods involved in execution of the said contracts and that the same were leviable to tax as sale of goods. Thus, I find the contention of the appellant does not hold ground on factual and statutory terms. 4.9 As regarding the contention of the appellant regarding the subject demand being vague on the grounds that it has been raised on the basis of data received from the Income Tax Department and consequently the extended period of time limitation and penal provisions were not invocable and that the demand having been issued beyond the five years period, I find that the said data sharing between the CBIC and CBDT is in terms of approved policy of the Government of India to inter alia track tax evasion and in this regard earlier an MOU was signed between the CBDT and the erstwhile CBEC in the year 2015 and later, with the introduction of GST and other allied changes, in supersession of the MOU signed in 2015 another MOU was signed between the CBDT and CBIC on 21.07.2020. I find that it is on the basis of the subject data received from the Income Tax Department that the subject short payment of service tax came to the notice of the Department. Had it not been for the receipt of the subject data from the Income Tax Department the subject short payment of service tax would have not come to the notice of the department for it was never the intention of the appellant to reveal the same on their own accord, as accentuated from the fact that the appellant had wilfully and deliberatively not declared the same in their statutory 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.
Service Tax Appeal No.70317 of 2024 14 Accordingly. equivalent penalty under Section 78 as also penalties under Section 77 of the Finance Act, 1994 have rightly been imposed upon the appellant. Further, as regarding the contention of the appellant regarding issuance of the SCN in this case beyond a period of five years, I find it pertinent to state that vide Section 6 of The Taxation And Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 read with Notification Dated 30.09.2020, so issued vide F. No. 450/61/2020-Cus IV(Part-1), it had inter alia been specified that "Notwithstanding anything contained in the Chapter V of the Finance Act, 1994, as it stood prior to its omission vide Section 173 of the CGST Act. 2017 w.e. f. 01.07.2017, the time limit specified in, or prescribed or notified under, the said Act which falls during the period from the 20th day of March, 2020 to the 30 day of December. 2020 for completion or compliance of such action as specified under clause (a) or (b) of the said section, shall stand extended to 31 day of December, 2020 Thus, the issuance of the subject SCN for the period 2014-15 on 29.12.2020 is legally correct. As regarding imposition of penalty upon the appellant under the provisions of Section 78 of the Finance Act, 1994, I find that the foregoing findings unambiguously establishes the same, however, corroboratedly 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::
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 Service Tax Appeal No.70317 of 2024 15 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 furnish 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,
(iv) Prathyusha Associates Shipping P. Limited Vs CCE, C & ST, Visakhapatnam-I [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) RS Joshi Vs Ajit Mills [AIR1977SC2279 (1977)40STC497=1979UPTC171 (SC 7 Member Bench)]::
Service Tax Appeal No.70317 of 2024 16 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:: Penalry- 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 froud 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) FIT 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 mattera).
(viii) UOI Vs Rajasthan Spinning & Weaving Mills [2009 (238) ELT 3 (SC)] :: Held:: Penalty Mandatory penalty under Section HAC 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! 4.10 In light of the cited facts and findings in their entirety, I find that the subject appeal is hit by time limitation and also does not hold ground on factual and statutory merits.
Service Tax Appeal No.70317 of 2024 17 Accordingly, I find no reason to interfere with the subject order of the adjudicating authority."
4.3 Findings of the Appellate Authority that appeal is barred by limitation did not stand the test of reasonability, the Appeal has been filed within the condonable period in filing the appeal, Commissioner (Appeals) should have considered the appeal and condoning the delay and taking up the appeal on merits. Interestingly, even after recording the finding that delay cannot be condoned he proceeded to decide the appeal on merits also, this clearly shows that the impugned order is passed in other state of confusion.
4.4 On merits of the case, we find that appellant during the course of argument have provided a chart of re-conciliation which is reproduced bellow:-
DAPL ASSOCITAES SALE CHART FY 2014-15 Sales Per S Difference Difference No Party Name Books (A) 26 AS (B) Certificate (C) (A-C) (B-C) 1 Executive 9906408 9906408 9906408 Engineer Construction Division-2 PWD Ghaziabad UP 3 Executive 3,769,272 3,769,272 3,769,272 Engineer Provincial Division PWD, Hapur 3 Meerut 1354210 1354210 1354210 Development Authority 4 Block 1,705,375 796,081 1,537,371 168,004 909,294 Development Officer Pilana District Baghpat The deductions as per 26AS in respect of the very same contracts/ work order are referred in the order in original. 4.5 On perusal of the said contracts, we find that from the certificate issued by the concerned authorities which are Service Tax Appeal No.70317 of 2024 18 Government Authorities that the said contracts are in respect of Road works etc. the copies of the certificates are re produced bellow:-
Service Tax Appeal No.70317 of 2024 20 4.6 In view of the facts that these activities are in respect of road work etc. which are exempted by Notification No.25/2012 at Sl. No.12 reproduced bellow:-
"12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
(b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);
(c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;
(d) canal, dam or other irrigation works;
Service Tax Appeal No.70317 of 2024 21
(e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or
(f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act;"
4.7 As the entire amount against which demands have been made is in respect of exempted services provided to Government Authorities in respect of construction, repair and maintenance of road etc, we do not find any merits in this demand and in the impugned order and set aside the same. 4.8 As we are setting aside the matter on merits of the case itself, we are not recording any finding on limitation. 5.1 Appeal is allowed.
(Operative part of the order pronounced in open court) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp