Custom, Excise & Service Tax Tribunal
M/S Massarrat Ali Khan vs Cgst Kanpur on 19 November, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.II
Service Tax Appeal No.70711 of 2025
(Arising out of Order-in-Appeal No.705/ST/Alld/2023 dated 31/10/2023
passed by Commissioner (Appeals) Customs, Central Excise & CGST,
Allahabad)
M/s Massarrat Ali Khan, .....Appellant
(236, Kosma Ghiror, Mainpuri)
VERSUS
Commissioner of Central Excise &
CGST, Kanpur ....Respondent
(117/7, Sarvodaya Nagar, Kanpur-208005) APPEARANCE:
Ms Stuti Saggi, Advocate for the Appellant Shri Santosh Kumar, Authorised Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70819/2025 DATE OF HEARING : 19 November, 2025 DATE OF DECISION : 19 November, 2025 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.705/ST/Alld/2023 dated 31/10/2023 passed by Commissioner (Appeals) Customs, Central Excise & CGST, Allahabad. By the impugned order following has been held:-
"5. In view of the above, I modify the impugned Order as under:
(i) Confirmation of demand of Service Tax (including Cesses) is reduced to Rs.7,31,302/ under proviso to Section 73 (1) of the Act along with interest under Section 75 of the Act.
Service Tax Appeal No.70711 of 2025 2
(ii) Penalty imposed upon the appellant, under Section 78 of the Act, is reduced to Rs.7,31,302/-
(iii) The penalties imposed under Section 77(1)(a) , 77(1)(c) 77(1)(d) 77 (2) of the Act & under Section 70 of the Act read with Rule 7(c) of the Service Tax Rules, 1994 shall remain unchanged."
1.2 By the Order-in-Original No.107/AC/ADJ/ST/2022 dated 12/05/2022 following has been held:-
"ORDER i. confirm the amount of Rs.73,06.829/- (Rupees Seventy Three Lakh Six Thousand Eight Hundred Twenty Nine Only) charged/ received during the F.Y 2015-16 by M/s.
Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri as taxable value under Section 67 of the Finance Act, 1994 and accordingly confirm the demand of service tax amounting to Rs. 10,59,490/- (Rupees Ten Lakh Fifty Nine Thousand Four Hundred Ninety Only) under proviso to Section 73(1) of the Finance Act, 1994 as amended read with Section 174 of the CGST Act, 2017 and order to recover the same from M/s. Massarrat Ali Khan, 236. Village Kosma Ghiro, Mainpuri under Section 73(2) of the Finance Act, 1994 as amended read with Section 174 of the CGST Act, 2017, ii. I order to recover interest at the applicable rates on said confirmed amount of service tax from Mis Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri under Section 75 of the Finance Act, 1994 read with Section 174 of CGST Act 2017 as discussed above. iii. I impose a penalty of Rs. 10,59,490/- (Rupees Ten Lakh Fifty Nine Thousand Four Hundred Ninety Only) upon Mis. Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 as discussed above. Further I give an option to the party to pay 25% penalty of demand confirmed as provided in the Section Service Tax Appeal No.70711 of 2025 3 78 of the Act, if Service Tax and Interest is paid within a period of 30 days of the date of receipt of this order. Further the benefit of reduced penalty shall be available only if the amount of such reduced penalty is also paid within 30 days.
iv. I impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) upon M/s Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuriunder Section 77(1)(a) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017as discussed above.
v. I impose a penalty of Rs.10,000/- (Rupees Ten Thousand only) upon M/s. Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri under Section 77(1)(c) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017as discussed above.
vi. I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand only) under Section 77(1)(d) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 upon M/s. Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri as discussed above.
vii. I impose a penalty of Rs. 10,000/- (Rupees Ten Thousands only) upon M/s. Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri under Section 77(2) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 as discussed above.
viii. I impose a penalty of Rs.20,000/- (Rupees Twenty Thousand only) upon M/s. Massarrat Ali Khan, 236, Village Kosma Ghiro, Mainpuri under Section 70 of the Finance Act, 1994 read with Rule 7(C) of Service Tax Rules, 1994 read with Section 174 of CGST Act, 2017 as discussed above."
2.1 Appellant is engaged in the taxable activity which qualify as per Section 65B(44) of the Finance Act, 1994 and liable to pay service tax as per the provisions of 66B of the Act. Appellant have neither obtained Service Tax Registration nor paid service tax against the taxable services so provided.
Service Tax Appeal No.70711 of 2025 4 2.2 On the basis of the information received from Income Tax Department, it was observed that the appellant have received huge amount on account of providing services as per ITR for the F.Y. 2015-16 but have not paid due service tax.
2.3 Appellant vide letters C.No.386 dated 07.11.2019 and subsequent reminder letter of C.No. 188 dated 09.06.2020 issued by Superintendent, was requested to provide the documents i.e. Form ST-2; details of nature of work/services provided; ST-3 returns, Bills/ Invoice/Job-work bills issued towards services provided, Form-26AS; Balance Sheets along with Profit & Loss A/c, Income Tax returns along with computation/calculation of Income, Reconciliation of amount received under different Sections of Income Tax [excluding Sec 194A] in Form-26AS vis-à-vis taxable value of services reflected in ST-3 returns along with reasons for difference, if any. Appellant did not provide any document or reconciled the figures.
2.3 In absence of any information, tax liability in respect of the services provided has been demanded as shown in table below:-
Receipts as per Value shown Higher of (1) Service Tax 26AS in ITR & (2) Rate % Payable 'Rs 1 2 3 4 5 73,06,829 73,06,829 73,06,829 14.50 10,59,490 2.4 Show cause notice dated 14.12.2020 was issued to the appellant, asking them to show cause as to why-
"(1) An amount of Rs.73,06,829/-(Rupees Seventy Three Lakh Six Thousand Eight Hundred Twenty Nine Only) should not be treated as the value of taxable services provided by them during the Financial Years 2015-16, and accordingly Service Tax amounting to Rs. 10,59,490/-
(Rupees Ten Lakh Fifty Nine Thousand Four Hundred Ninety Only) as detailed in Table-A not paid /short paid including Education Cess, Secondary & Higher Education Cess and Swachh Bharat Cess should not be demanded and recovered from them Under proviso to Section 73(1) Service Tax Appeal No.70711 of 2025 5 of the Finance Act, 1994 as amended-read with Section 174 of the COST Act, 2017
(ii) Interest at the appropriate rate should not be charged and recovered from the 'Noticee' in respect of amount of service tax mentioned at S.N. (i) aboveunder Section 75 of the 'Act' read with Section 174 of CGST Act, 2017;
(iii) Penalty should not be imposed upon them in respect of amount of service tax mentioned at S.N. (i) aboveunder Section 78 of the 'Act' read with Section 174 of CGST Act, 2017.
(iv) Penalty under Section 77(1)(a), 77(1)(c), 77(1)(d) and 77(2) of Finance Act, 1994 readwith Section 174 of CGST Act, 2017 should not be imposed upon them for their various acts of omission and commission as discussed above;
(v) the late fee / amount under Section 70 of Finance Act, 1994 read with Rule 7(C) of ibid and read with: Section 174 of CGST Act, 2017should not be Imposed upon them for their various acts of omission and commission as discussed above;"
2.5 The said show cause notice was adjudicated as per the Order-in-Original dated 12.05.2022 referred in para 1.2 above.
2.6 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been disposed of as per the impugned order.
2.7 Aggrieved appellant have filed this appeal.
3.1 I have heard Ms Stutti Saggi learned Counsel appearing for the appellant and Shri Santosh Kumar learned Authorised Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- The demand has been confirmed against the appellant by observing that appellant have failed to provide the necessary documents to verify the nature of services provided and the payment received, although, the said Service Tax Appeal No.70711 of 2025 6 documents were provided by them to the office of the First Appellate Authority through E-mail.
The demand is time barred as this demand has been made by invoking the extended period of limitation without specifying how they satisfy the ingredients as per proviso to Section 73 (1) necessary for invoking the same. 3.3 Learned Authorized Representative 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 Impugned order records the findings as follows:-
"4.5 The impugned order has been issued confirming demand of service tax amounting to Rs. 10,59,490/- under proviso to Section 73(1) of the Act with imposition of penalty equivalent to tax confirmed under Section 78 of the Act on the basis of data received from CBDT for the period 2015-16. During the adjudication proceedings, appellant has submitted that they have rendered repair and maintenance work to irrigation department, Bulandsahar during the relevant period. However, the adjudicating authority has found that no work orders, Bill /Invoice etc have been provided to support its claim and accordingly, in absence of any substantial document, the demand calculated on the entire amount received during 2015-16 as per the ITR details has been confirmed against them in the impugned order.
4.6 The appellant in the instant appeal has contested that the work falls under S.No. 12 (d) of the negative list of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 and therefore non taxable. The appellant has contested that the amount received is for work which is assessable under VAT only. It has been submitted that the department has not enquired that whether the service tax has been charged by them or not. They have been Service Tax Appeal No.70711 of 2025 7 assessed under VAT for supply of material for the work and Service tax is not applicable to them.
4.7 The appellant has provided some documents at the appellate stage to claim, the exemption under the said Notification. On going through the details of the documents, it is observed that the appellant has provided copy of balance sheet form 26 AS and the VAT returns for the said period showing their assessment under work contract. It is beyond doubt that work contract was leviable to VAT as well as Service Tax as per the extant provisions laid down under the Act as amended from time to time. Therefore, it is clear that contention of the appellant that service tax is not imposable on these work contract do not hold any ground.
4.8 Further it is observed that the appellant has claimed that their work falls under purview of services provided at Sl. No. 12 (d) of the Notification No. 25/2012-ST dated 20.06.2012 but they did not provide any documents evidencing the details of work viz work orders, invoice/bill showing the name and scope of work, from where it could be concluded that the said work is part of the services mentioned in the negative list of services and therefore, non taxable.
4.9 Further, coming to the point of valuation of the work contract services, it is found that once the work of the appellant has been concluded to be repair and maintenance work under work contract service as per para 38 of the impugned order, the valuation of the taxable service needs to be arrived under the laws laid down for work contract service as per Rule 2A (il) of Service Tax (Dertermination of Value) Rules, 20016 which provides as under:
"2A. Determination of value of service portion in the execution of a works contract.-Subject to the provisions of section 67, the value of service portion in the execution of Service Tax Appeal No.70711 of 2025 8 a works contract, referred to in clause (h) of section 66E of the Act, shall be determined in the following manner, namely:-
(i) -----------
(a)------------
(b)--------
(c)-------
(ii) Where the value has not been determined under clause
(i), the person liable to pay tax on the service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely:-
(A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent of the total amount charged for the works contract, (B) in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy percent of the total amount charged for the works contract; (C) in case of other works contracts, not covered under sub-clauses (A) and (B), including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property, service tax shall be payable on sixty per cent. of the total amount charged for the works contract;
4.10 It is observed that VAT details assessed for supply of material is evidenced from the documents furnished by the appellant and it is found that adjudicating authority has not adopted any of the above parameters and calculated the service tax on entire value of receipts, which do not seem to be proper and justified. It is found that assessment of the taxable value in the instant case, in to assess the tax under repair and maintenance work contract for which taxable value is 70% of the whole value of receipts under the work contract after the due Service Tax Appeal No.70711 of 2025 9 abatement provided under the Rule 2A (ii) of Service Tax (Dertermination of Value) Rules, 2006 and accordingly, the service tax leviable upon the appellant comes as under:
S. Period Gross Taxable Rate of Service
No Value value ( 70% Service Tax
of Gross Tax Amount.
Value) (Rs.)
1. 01.04.15 to 31.05.15 0 0 12.36% 0
2. 01.06.15 to 14.11.15 5855950 4099165 14% 573883
3. 15.11.15 to 31.03.16 1550924 1085647 14.50% 157419
Total 731302
4.11 Accordingly, I hold that the appellant has provided work contract services as found in the impugned order. It is found that the adjudicating authority has arrived at the service tax liability of R.s 10,59,490/ on consideration of whole value of receipts where as the proper tax liability is Rs. 7,31,302/- after considering the taxable value in terms of Rule 2A (ii) of Service Tax (Determination of Value) Rules, 2006 for for the period 2015-16 under proviso to Section 73(1) of the Act along with interest under Section 75 of the Act.
4.12 I observe that under the self-assessment procedure specified in the statute, the appellant was required to assess & pay their Service Tax liability correctly. The appellant has not furnished the ST-3 returns as required under the provisions of service tax laws. The non- payment of Service Tax could be detected only during the course of enquiry conducted by the Department. Thus, it is a clear case of mis-declaration & suppression of facts and contravention of the statutory provisions, with intent to evade payment of Service Tax. Thus, I find that extended period of limitation has been rightly invoked in this case and appellant is liable for penalty of Rs. 7,31,302/ under Section 78 of the Act as imposed by the adjudicating authority.
4.13 It is observed that the appellant has contested the issue of time bar submitting therein that SCN has been issued beyond 30 months of 2015-16. It is found that Service Tax Appeal No.70711 of 2025 10 extended time limit of five years is applicable in the instant case as per discussion in above paras accordingly, I hold that the demand notice issued is within prescribed time limit in terms of proviso to Section 73(1) of the Act. 4.14 It is observed that the adjudicating authority has found contraventions of Section 77(1)(a) 77(1)(c) 77(1)(d) 77 (2) of the Act & under Section 70 of the Act read with Rule 7(c) of the Service Tax Rules, 1994 on the part of appellant in the impugned order. I find the contraventions apparent on the record and hence hold that penalty imposed in the impugned order is proper and justified." 4.3 I find that the first issue which needs to be considered in the present case is with regards to invocation of extended period of limitation. In the show cause notice following has been recorded:-
"8. It has been noticed that the Noticee did not inform the department that they provided a taxable service without obtaining the registration from the department and also did not show the amount received from the service recipients by not filing the due ST-3 Returns to the department. Thus, it appears that the Noticee' suppressed the fact of receiving the taxable amount from the Department with intent to evade payment of service tax. Therefore, the Service Tax, alongwith cesses amounting to Rs. 10,59,490/-appears to be recoverable from the 'Noticee' by invoking extended period of five years under Section 73 of the "Act along with interest thereon under Section 75 of the 'Act' read with Section 174 of CGST Act, 2017. The 'Noticee' also appears to be liable for imposition of penalty under Section 78 of the 'Act read with Section 174 of CGST Act, 2017 for suppressions of the facts with intention to evade payment of Service. Tax The 'Noticee' also appears to be liable for penalty under Section 77(1)(a) of the Act read with Section 174 of CGST Act, 2017 as the 'Noticee' failed to take the registration in accordance with the provisions of Section 69 of ibid read Service Tax Appeal No.70711 of 2025 11 with Rule 4 of Service Tax Rules, 1994. The 'Noticee' also appears to be liable for penalty under Section 77(1)(c) of the Act read with Section 174 of CGST Act, 2017 as the 'Noticee' failed to furnish information and produce information called by the Central Excise officer. The 'Noticee' also appears to be liable for imposition of penalty under Section 77(2) of the 'Act' for non-filing the due ST-3 returns as required under Section 70 of Finance Act, 1994 read with Section 174 of CGST Act, 2017.
9. And whereas, according to Section 73(1) of the Finance Act, 1994 (as amended) from time to time, where any service tax has not been levied or paid or has been short- levied or short-paid or erroneously refunded by reason of -
(a) fraud; or
(b) collusion; or
(c) willful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent. "
4.4 In this regards, Order-in-Original records the findings as follows:-
"52. In the instant case, the party did not furnish the desired information/ documents called for by the departmental officers. I observe that the party was asked several limes by the departmental officers to produce relevant record/documents but despite of several communications sent to them in this regard they failed to produce the requisite documents. They tried to avoid coming with record before the officers on one pretext or the other. For this deliberate action of non-production of records/information on the part of the party with an ulterior motive of suppressing the requisite information, I conclude that the party is liable to penal action under Section 77 (1) (c) of the Finance Act, 1994read with Service Tax Appeal No.70711 of 2025 12 Section 174 of the CGST Act, 2017 are imposable upon the party.
Section 77(1) (d) of the Finance Act, 1994 provides that-
"Any person, who is required to pay tax electronically, through internet banking. fails to pay the tax electronically, shall be liable to a penalty which may extend to ten thousand rupees"
53. Since the party did not pay the tax electronically, through internet banking. I hold that they are liable to penal action under Section 77 (1) (d) of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017are imposable upon the party.
54. It is also observed that the party had suppressed the correct value of taxable services provided by them, during the period 2015-16 from the jurisdictional service tax authorities as they did not file service tax return for the period in question, though they nad provided taxable services during the said period. By this deliberate action of omission or failure on the part of the party to fumish the correct value of taxable service in returns, as prescribed under Section 70 of the Act ibid, to disclose wholly and truly all the material facts viz. the gross amount received by them for rendering the taxable service, necessary for their assessment for the said period, the value of taxable service had escaped assessment. Hence, contravention of Section 67, 68, 69 and 70 of Finance Act. 1994 is established against them. Thus, I conclude that they have contravened the provisions of Section 70 of Finance Act, 1994 read with Rule 7 of the Service Tax Rules, 1994. For having committed the above contraventions, I hold that they rendered themselves liable to penal action under Section 77(2) of the Finance Act 1994read with Section 174 of the CGST Act, 2017are imposable upon the party." 4.5 Impugned also records the submissions made by the appellant for the reasons why extended period could not have been invoked:-
Service Tax Appeal No.70711 of 2025 13 "26. Further, they claimed that the impugned demand is time barred as the SCN is issued only for the reason that the turnover in income tax records do not match with the turnover in the service tax records and the burden is on the revenue to prove any of the above elements to uphold validity of extended period of 5 years. In this regard, they referred the case of M/s Cosmic Dye Chemical Vs Collector of Cen Excise Bombay (1995)(75) ELT 721(S.C).
27. It is also stated that in absence of any instance of fraud or collusion being pointed out there is nothing for rebuttal by the person receiving such notice. How is the person required to prove that he is not liable for service tax other than relying upon government notification. A person can offer rebuttal with evidence only where the department provides the details of the transactions, which they consider to have led to underpayment/non payment of service tax. Merely comparing the income tax returns with service tax returns will not be an instance, especially where it has been repeatedly pointed out that there was no liability on the party to collect and pay service tax. The department has not rebutted this contention while issuing the standard format SCNS. The allegations of fraud and collusion etc., are allegations of serious nature and they cannot be just thrown at a party lightly an in a vague manner. These allegations lead to serious consequences and such light mannered, routine allegations if upheld will give unbridled and arbitrary powers to the department to just allege and leave the party receiving notice scurrying to some how prove his innocence and bona fide which is not the mandate of law."
4.6 It is evident from the above that appellant was providing taxable services for which he entertained a bonafide belief that the services were exempt from payment of service tax in terms of Notification No.25/2012 dated 26.06.2012. Further, it is also evident that appellant in terms of contract entered with the Irrigation Department, Uttar Pradesh Bulandshahr Division Service Tax Appeal No.70711 of 2025 14 Ganga Canal Bulandshahr have not received any service from them. The details of payment received are duly certified by Executive Engineer are reproduced below:-
4.7 As appellant have not charged any service tax from service recipient their claim of bonafide belief that he is not liable to pay any service tax and the service is exempt from payment of service tax is well founded.
4.8 Hon'ble Supreme Court in the case of Uniworth Textiles Ltd. 2013 (288) ELT 161 has held as follows:-
"21. The Revenue contended that of the three categories, the conduct of the appellant falls under the case of "willful misstatement" and pointed to the use of the word "misutilizing" in the following statement found in the order of the Commissioner of Customs, Raipur in furtherance of its claim :
"The noticee procured 742.51 kl of furnace oil valued at Rs. 54,57,357/- without payment of customs duty by misutilizing the facility available to them under Notification No. 53/97-Cus., dated 3-6-1997"
22. We are not persuaded to agree that this observation by the Commissioner, unfounded on any material fact or Service Tax Appeal No.70711 of 2025 15 evidence, points to a finding of collusion or suppression or misstatement. The use of the word "willful" introduces a mental element and hence, requires looking into the mind of the appellant by gauging its actions, which is an indication of one‟s state of mind. Black‟s Law Dictionary, Sixth Edition (pp 1599) defines "willful" in the following manner :-
"Willful. Proceeding from a conscious motion of the will; voluntary; knowingly; deliberate. Intending the result which actually comes to pass...
An act or omission is "willfully" done, if done voluntarily and intentionally and with the specific intent to do something the law forbids, or with the specific intent to fail to do something the law requires to be done..."
23. In the present case, from the evidence adduced by the appellant, one will draw an inference of bona fide conduct in favour of the appellant. The appellant laboured under the very doubt which forms the basis of the issue before us and hence, decided to address it to the concerned authority, the Development Commissioner, thus, in a sense offering its activities to assessment. The Development Commissioner answered in favour of the appellant and in its reply, even quoted a letter by the Ministry of Commerce in favour of an exemption the appellant was seeking, which anybody would have found satisfactory. Only on receiving this satisfactory reply did the appellant decide to claim exemption. Even if one were to accept the argument that the Development Commissioner was perhaps not the most suitable repository of the answers to the queries that the appellant laboured under, it does not take away from the bona fide conduct of the appellant. It still reflects the fact that the appellant made efforts in pursuit of adherence to the law rather than its breach.
Service Tax Appeal No.70711 of 2025 16
24. Further, we are not convinced with the finding of the Tribunal which placed the onus of providing evidence in support of bona fide conduct, by observing that "the appellants had not brought anything on record" to prove their claim of bona fide conduct, on the appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India v. Ashok Kumar & Ors. - (2005) 8 SCC 760 that "it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility."
25. Moreover, this Court, through a catena of decisions, has held that the proviso to Section 28 of the Act finds application only when specific and explicit averments challenging the fides of the conduct of the assessee are made in the show cause notice, a requirement that the show cause notice in the present case fails to meet. In Aban Loyd Chiles Offshore Limited and Ors. (supra), this Court made the following observations :
"21. This Court while interpreting Section 11-A of the Central Excise Act in Collector of Central Excise v. H.M.M. Ltd. (supra) has observed that in order to attract the proviso to Section 11-A(1) it must be shown that the excise duty escaped by reason of fraud, collusion or willful misstatement of suppression of fact with intent to evade the payment of duty. It has been observed :
„...Therefore, in order to attract the proviso to Section 11- A(1) it must be alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Service Tax Appeal No.70711 of 2025 17 Rules made thereunder with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been practiced or that the assessee was guilty of wilful misstatement or suppression of fact. In the absence of any such averments in the show-cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act.‟ It was held that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assessee is put to notice the assessee would have no opportunity to meet the case of the Department. It was held :
...There is considerable force in this contention. If the department proposes to invoke the proviso to Section 11- A(1), the show-cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the Excise Department places reliance on the proviso it must be specifically stated in the show-cause notice which is the allegation against the assessee falling within the four corners of the said proviso...." (Emphasis supplied)
26. Hence, on account of the fact that the burden of proof of proving mala fide conduct under the proviso to Section 28 of the Act lies with the Revenue; that in furtherance of the same, no specific averments find a mention in the show cause notice which is a mandatory Service Tax Appeal No.70711 of 2025 18 requirement for commencement of action under the said proviso; and that nothing on record displays a willful default on the part of the appellant, we hold that the extended period of limitation under the said provision could not be invoked against the appellant."
4.9 Following decisions also hold against invocation of extended period of limitation in case where the person entertained a bonafide belief with regards to non taxability of services provided or exempted nature of services.:-:-
Anand Nishikawa Co. Ltd. Vs CCE, Meerut 2025 (188) ELT 149;
Infinity Infotech Parks Ltd. Vs UOI 2014 (36) STR 37; CCE, Chennai Vs Chennai Petroleum Corporation Ltd. 2007 (211) ELT 193;
4.10 In view of the above, I find that demand is hit by limitation and the findings recorded in the impugned order in this regard cannot stand in the eyes of law. Accordingly, the impugned order is set aside.
5.1 Appeal is allowed.
(Dictated and pronounced in open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp