Custom, Excise & Service Tax Tribunal
Ghaziabad Development Authority vs Ce & Cgst Ghaziabad on 7 January, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70132 of 2015
(Arising out of Order-in-Appeal No.GZB/EXCUS/000/APP/ 42/15-16 dated
29.07.2015 passed by Commissioner (Appeals) Customs, Central Excise &
Service Tax, Noida)
M/s Ghaziabad Development Authority, .....Appellant
(Navyug Market, Ghaziabad)
VERSUS
Commissioner of Central Excise &
Service Tax, Ghaziabad ....Respondent
(CGO Complex-II, Hapur Road,
Kamla Nehru Nagar, Ghaziabad)
APPEARANCE:
Shri Atul Gupta, Advocate &
Ms Aayushi Srivastava, Advocate for the Appellant
Smt Chitra Srivastava, Authorised Representative for the Respondent
CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.70007/2025
DATE OF HEARING : 27 September, 2024
DATE OF PRONOUNCEMENT : 07 January, 2025
SANJIV SRIVASTAVA:
This appeal is directed against ORDER IN APPEAL
NO.GZB/EXCUS/000/APP/ 42/15-16 dated 29.07.2015 of
Commissioner (Appeals II) Meerut. By the impugned order,
Order-In-Original No. No. 13-14/ADC/ST/GZB/2014-15 dt.
28.11.2014 of Additional Commissioner, Central Excise and
Service Tax Commissionerate Ghaziabad has been partially
modified and flowing has been held:
ORDER
1. I uphold the demand of Service Tax for the period 2008-09 to 2012-13 along with - interest as confirmed in the Service Tax Appeal No.70132 of 2015 2 impugned order subject to the redetermination of the Service Tax amount allowing the benefit of cum-Tax/ duty benefit for computation of service tax in view of the provisions of Section 67 (2) of the Finance Act, 1994.
2. I also uphold the penalty imposed under Section 78 of the Finance Act, 1994 against the appellant equal to re- determined/re-computed demand as ordered above.
3. I also uphold the penalty of Rs. 10,000/- imposed under Section 77 of the Finance Act, 1994 against the appellant.
2.1 On the basis of intelligence an enquiry was conducted by the officers of Anti-Evasion Branch of Central Excise & Service Tax Commissionerate, Ghaziabad which revealed that the Appellants were evading payment of Service Tax on the taxable service under the category of "Renting of immovable property" & "Mandap Keeper/ Renting of Community Centre" provided by them 2.2 Appellants had also not got themselves registered under Service Tax law and neither filed Service Tax returns (ST-3) nor deposited Service Tax in respect of the taxable services being rendered by them.
2.3 A show cause notice dated 17.04.2013 was issued to them asking to show cause to the Additional Commissioner Central Excise and Service Tax, Ghaziabad as to why:
(i) Service Tax amounting to Rs 16,86,976/- payable on the amounts received against the taxable services rendered by them during the period 2008-09 to 2011-
12, should not be demanded and recovered from them under the provisions of sub section (1) of the Section 73 of the Finance Act, 1994 as amended
(ii) Interest at appropriate rate should not be charged and recovered from them against aforesaid demand under the provisions of Section-75 of the Finance Act, 1994, as amended Service Tax Appeal No.70132 of 2015 3
(iii) Penalty should not be imposed upon them under the provisions of Section- 76, 77 and 78 of the Finance Act, 1994 for their alleged evasion of Service Tax in contravention of the provisions of Rule 4, 5, 6 & 7 of the Service Tax Rules, 1994, read with the provisions of Section 68, 69 &70 of the Finance Act, 1994, as amended
(iv) The Finance Controller of M/s Ghaziabad Development Authority who is tasked with the responsibility of looking after financial transactions of M/s Ghaziabad Development Authority including matters related to Service Tax has not ensured that registration under Service Tax Rules has been applied/obtained, Service Tax dues paid/returns filed etc .for Ghaziabad Development Authority and therefore for his illegal acts of omission and commission that led to contravention of Rule 4, 5, 6 & 7 of the Service Tax Rules, 1994 read with the provisions of Section 68, 69 & 70 of the Finance Act, 1994, as amended, has rendered himself liable for a personal penalty under Section 77 of the Finance Act-1994 2.4 Another show cause notice dated 21.05.2014 was issued for the subsequent period asking the appellant to show cause as to why:
(i) Service Tax amounting to RS 6,87,463/- payable on the taxable amount received D during the financial year 2012-13 on account of service rendered by them should not be demanded and recovered from, them under the provisions of sub section (1) of the Section 73 of the Finance Act, 1994
(ii) Interest at appropriate rate should not be charged and recovered from them against aforesaid demand leviable on the above amount under the provisions Section- 75 of the Finance Act, 1994, as amended.
Service Tax Appeal No.70132 of 2015 4
(iii) Penalty should not be imposed upon them under the provisions of Section- 76, 77 and 78 of the Finance Act, 1994 for their alleged act of evasion of above mentioned amount of Service Tax in contravention of the provisions of Rule 4,5,6 & 7 of the Service Tax Rules 1994, read with the provisions of Section 68, 69 &70 of the Finance Act, 1994, as amended.
2.5 Both the show cause notice were adjudicated as per the order in original referred in para 1 above, holding as follows:
(i) I confirm the demand and recovery of Rs. 23,74,439/- ( Rs 16,86,976/- +Rs 6,87,463/-) (Rs Twenty Three Lac Seventy Four Thousand and Four Hundred Thirty Nine Only) towards Service Tax (including Education Cess and Secondary and Higher Education Cess) from M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad under Section 73(1) of the Finance Act, 1994.
(ii) I order the charging and recovery of appropriate interest under Section 75 of the Finance Act, 1994 on the above amount of confirmed demand from M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad.
(iii) I hereby impose penalty of Rs 23,74,439/- (Rs Twenty Three Lac Seventy Four Thousand and Four Hundred Thirty Nine Only)under Section 78 of the Finance Act, 1994 upon M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad
(iv) I hereby impose penalty of Rs 10,000/-(Rs Ten Thousand Only) under Section 77 of the Finance Act,1994 upon M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad,.
(v) I hereby impose a personal penalty of Rs 10,000/-(Rs Ten Thousand Only) under Section 78A of the Finance Act,1994 upon the Finance Controller of M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad.
Service Tax Appeal No.70132 of 2015 5 2.6 Aggrieved appellant filed the appeal before Commissioner (Appeal) which has been disposed as per the impugned order referred in appeal.
2.7 Aggrieved appellant have filed this appeal.
3.1 We have heard Shri Atul Gupta and Ms Ayushi Srivastava, Advocates for the appellant and Ms Chitra Srivastava, Authorized Representative for the revenue.
3.2 Arguing for the appellant learned counsel submits that:
The SCN issued were vague and issued without application of mind and thus the whole demand confirmed liable to be set aside. Reliance placed on the following:
o Brindavan Beverages (P) Ltd. [2007 (213) ELT 487 (SC)] o Royal Oilfield Private Ltd. [2006 (194) ELT 385 (Bom)] The show cause notice dated 27.05.2014 have been issued quoting the obsolete provisions hence bad in law. Reliance on o Kusum Healthcare Pvt. Ltd. [2023 (73) GSTL 357 (T- Del)] o FICCI [2014 TIOL 701 (T-Del)] o The Peoples Choice 2014-TIOL-431-HC-KAR-ST.
The appellant being owner of the immovable property given on rent therefore service tax is not payable.
o Cuddalore Municipality [2021 (4) TMI 500 (MAD)] Service Tax demand cannot be confirmed under the category of Mandap Keeper Services against the appellant where such services were provided for religious functions.
o Heera Panna Guest House [2012 (26) STR 36 (T- Del)] o Karbala Trust [2006 (2) STR 339 (T-Bang)] Appellant is a Governmental Authority as defined by Notification No 25/2012-ST dated 20.06.2012 and thus exempted in terms of S No 39 of the Notification.
Service Tax Appeal No.70132 of 2015 6 The major portion of demand is barred by limitation as extended period of limitation could not have been invoked. Penalty is not imposable.
3.3 Authorized representative reiterated the findings recorded in the impugned order.
4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Impugned order records the findings as follows "I observe that as per the allegation made against the appellant, they provided taxable Renting of Immovable Property and Mandap Keeper Services during the year 2008-09 to 2012-13 without discharging their Service Tax liability. It has also been alleged that they neither got themselves registered under Service Tax law nor filed Service Tax returns (ST- 3) in respect of the taxable services rendered by them as mentioned above.
The Appellant's contention that the impugned order has confirmed a vague SCN wherein charge on Appellant was not set out is not correct as in both Show Cause Notices the charges/ allegations have, been very well elaborated supported by the appropriate provisions of Service Tax law.
The Appellant also contended that they have received an amount of Rs. 5,55,000/- during the period 2008-2012, which were purely towards religious activities such as holding of kirtan, jagrans, satsang, organizing poojas etc., and these amounts are not taxable under the category of Mandap Keeper service as religious functions cannot be considered as any official, social or business function. I find that there is no evidence available on case record which may establish that they were providing their community centre for religious activities I have also perused the four sample invoices/ receipts enclosed by the Appellant which were issued for the booking of community centre. I find that Service Tax Appeal No.70132 of 2015 7 it has not been mentioned anywhere on the said invoices the purposes for which the community centres have been booked. Thus the Appellant failed to provide any evidence which may prove that the said community centres are given for religious activities The Appellant also contended that heir activities are exempt from service tax under S.No. 39 of Notification 25/2012-ST dated 20.06.2012 for the period 01.07.2012 to 31.03.2013 as they are a body established with complete participation and control by the Government and it has been set up by the Uttar Pradesh Urban Planning and Development Act, 1973 Act therefore it qualifies under the definition of "governmental authority". The above contention of the Appellant is not acceptable and I agree with the findings of the adjudicating authority that that the Appellant is neither a Government Authority nor a local authority.
I observe that services provided by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution are specifically exempt under the mega exemption. Notification 25/2012-ST dated 20.06.2012. I also observe that 'Governmental authority' has been defined in the said mega exemption as a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution.
I therefore find that there is nothing on the record which may prove that GDA has been established with 90% or more participation by way of equity or control by Government. As regards Local authority the same is defined in clause (31) of section 65B and means the following:-
Service Tax Appeal No.70132 of 2015 8 A Panchayat as referred to in clause (d) of Article 243 of the Constitution A Municipality as referred to in clause (e) of article 243P of the Constitution A Municipal Committee and a District Board, legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund A Cantonment Board as defined in section 3 of the Cantonments Act, 2006 A regional council or a district council constituted under the Sixth Schedule to the Constitution A development board constituted under article 371 of the Constitution, or A regional council constituted under article 371A of the Constitution Therefore, local bodies constituted by a State or Central Law are not local authorities in view of the aforesaid definition Therefore, I hold that M/s Ghaziabad Development Authority did not fall under any of the above categories as per the provisions of Service Tax Law and thus they are not entitled to exemption granted under the mega Exemption Notification 25/2012-ST dated 20.06.2012 The Appellant's contention that there is no suppression of facts by them as their activities were all in public domain and it was carried out in open is also not tenable as they failed to declare to the department that they are providing taxable service. They neither got themselves registered with the department nor paid any service tax as well as filed their Service tax return. Therefore, I find that the extended period of limitation as envisaged under proviso to Section 73(1) of the Finance Act, 1994 has been correctly invoked in this case.
Service Tax Appeal No.70132 of 2015 9 The Appellant in their additional submission stated that vide the Finance Act 2010 Section 76(A)(6)(h)(i) and Section 77 reintroduced Service Tax on "'Renting of Immovable Property' retrospectively i.e. from 01.06.2007 by amending Section 65(105)(zzzz) which was challenged in the various High Courts. The said challenge was rejected by some High Courts. Special Leave Petition against the order upholding the validity of the retrospective amendment and validation are pending in the Hon'ble Supreme Court. They further submitted the position is not yet clear as the same is not decided by the Hon'ble Apex Court, thus clearly evidencing that issue involved is that of interpretation of law.
The Appellant's contention that that no penalty can be imposed when retrospective amendment in the statute creates liability on the assessee is not acceptable as the challenge against leviability of Service Tax on 'Renting of Immovable Property' with effect from 01.06.2007 was rejected by the Hon'ble High Courts and as on date the "Renting of Immovable Property" is a taxable service with effect from 01.06.2007 on which no service tax has been paid by the Appellant. Therefore, demand of service tax on 'Renting of Immovable Property' covering the period from 2008-09 to 2012-13 is legally justified and thus penalty is also imposable on them. The case laws quoted are not relevant in this case.
The Appellant contended that all the records including computerized data and other records maintained by Appellant were found to be accurate and in terms of the first proviso to sub-Section (1) of Section 78, in a situation "where true and complete details of the transactions are available in the specified records" penalty cannot exceed fifty percent of the service tax amount demanded. I find that it has been established that the Appellant failed to ascertain their Service Tax liability in their records, the aforesaid contention of the Appellant that all the records Service Tax Appeal No.70132 of 2015 10 including computerized data and other records maintained by Appellant were found to be accurate is not therefore correct.
In view of the foregoing discussions, I hold that the services rendered by the Appellant are covered under the Service tax net within the definition of 'Renting of immovable property' and Mandap keeper and they are liable to pay Service-tax on the amount as adjudged in the impugned order under Section 73(1) of the Finance Act,1994 alongwith interest at appropriate rate under Section 75 ibid. The appellant also rendered themselves liable for penal action Section 77 and 78 of the Finance Act, 1994 Further, for the determination of liability of service tax, the appellant also claimed that in any case amount received towards renting/hire is to be treated as cum tax price in view of the provisions of Section 67 (2) of the Finance Act, 1994. I find that there is no evidence to the fact that the appellant has received the Service Tax amount from the tenant/clients hence amount received from Renting of Immovable Property service shall be taken as cum tax price in view of the provisions of Section 67 (2) of the Finance Act, 1994 Accordingly, I hereby direct the adjudicating authority/jurisdictional Divisional officer to re-determine the service tax liability allowing benefit of cum Tax price as stated above."
4.3 One of the ground for challenge of the demand made is that the appellant being government authority is not required to pay the service tax or is exempt as per the notification 25/2012- ST (Sl No 39) dated 20.06.2012 for the period from 01.07.2012. However we find that in the case of Greater Noida Development Authority [2015 (40) S.T.R. 95 (All.)] Hon'ble Allahabad High Court has held as follows:
32. Similarly under Clause 999.01 with regard to the sovereign/public duties/functions, it has been clarified that activities assigned to and performed by the sovereign/public Service Tax Appeal No.70132 of 2015 11 authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account. Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to be performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services.
Any amount/fee collected in such cases are not to be treated as consideration for the purposes of levy of Service Tax.
33. However, if a sovereign/public authority provides a services, which is not in the nature of an statutory activity and the same is undertaken for a consideration (not a statutory fee), then in such cases, Service Tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined.
34. Letting of immovable property for consideration, which is determined on the basis of offers received from public at large by the assessee Greater Noida Industrial Development Authority is a service provided for consideration and not on payment of statutory fees, neither it is a statutory service performed by the assessee. It may be that the statute permits such activities of letting out of immovable property for augmenting its finances but the same cannot be termed as the service in public interest nor it is a mandatory or statutory functions of the Development Authority. Accordingly such activity of leasing do constitute a taxable service, in our opinion.
4.4 In the case of Greater Noida Development Authority [2015 (38) S.T.R. 1062 (Tri. - Del.)] which has been upheld by the Hon'ble High Court as per the order referred in Para 4.3 above Service Tax Appeal No.70132 of 2015 12 we find that on issue of limitation and Penalties, Delhi Bench has observed as follows:
14. Whether for demand of Service Tax extended period of 5 years from the relevant date under proviso to Section 73(1) of Finance Act, 1994 would be invokable and whether penalty would be imposable on the Appellant under Section 76, 77 and 78 of the Finance Act, 1994.
"14.1 In terms of Section 73(1) of Finance Act, 1994, where any tax has not been levied or short paid or erroneously refunded, the central excise officers may within one year from the relevant date, serve notice on the person chargeable with the Service Tax which has not been levied or paid or which has been short levied or short paid or the person to whom such tax has been erroneously refunded requiring him to show case as to why he should not pay the amount specified in the show cause notice. The term, "relevant date" is defined in sub-section (6) of the Section
73. With effect from 28-5-2012, the normal limitation period has been enhanced to 18 months. In terms of proviso to Section 73(1) wherever Service Tax has not been levied or paid or short levied or short paid or erroneously refunded by reason of fraud, any wilful suppression of facts, mis- statement or contravention of any provisions of Chapter V of Finance Act, 1994 or of the Rules made thereunder with intent to evade payment of tax, the notice for recovery of such short levied, short paid or erroneously refunded Service Tax can be made within 5 years from the relevant date. Thus, longer limitation period of 5 years is applicable only when there is an element of fraud, collusion, wilful mis- statement, suppression of facts or deliberate contravention of the tax provisions with intent to evade payment of tax. The provisions of Section 73(1) of Finance Act, 1994 are in pari materia with the provisions of the provision to Section 11A(1) of Central Excise Act, 1994. The Apex Court in a Service Tax Appeal No.70132 of 2015 13 series of judgments in the cases of CCE v. Chemphar Drugs & Liniments reported in 1989 (40) E.L.T. 276 (S.C.), Pushpam Pharmaceuticals Company v. CCE, Bombay (S.C.) reported in 1995 (78) E.L.T. 401 (S.C.), Wallace Flour Mills in Cuttack reported in 1989 (41) E.L.T. 198 (S.C.) has held that the extended period of five years for recovery of short paid, short levied or erroneously refunded duty under proviso to Section 11A(1) of Finance Act, 1994 would not be applicable for failure or negligence of the manufacturer to take out licence or to pay duty when there was scope for doubt that the goods were dutiable or not, that the extended period under proviso to Section 11A(1) is applicable only when there is something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, or contravention of the provision of Central Excise Act, 1944 or of the Rules made thereunder with intent to evade payment of duty. It has also been observed that expression "suppression of facts" in proviso to Section 11A(1) is to be interpreted strictly because it has been used in the company of such strong words as "fraud", "collusion", "wilful mis- statement", and where the facts are known to both the parties. It is not the case of suppression of facts. The Apex Court in the case of Continental Foundation Joint Venture v. CCE, Chandigarh reported in 2007 (216) E.L.T. 177 (S.C.) has held that wherever on account of conflicting judgments on an issue or conflictions circular of the Board on an issue, there is scope for doubt, the extended period under proviso to Section 11A(1) of Central Excise Act, 1944 would not be applicable. In our view, the ratio of the above judgments of the Apex Court would be applicable while interpreting the provisions of Section 73(1) of the Finance Act, 1994. In this case, the appellant is a body corporate of the Government of Uttar Pradesh for performing statutory functions in accordance with the provisions of U.P. Industrial Area Service Tax Appeal No.70132 of 2015 14 Development Act, 1976 and one of its functions is the allotment of vacant land to various persons for industrial or residential purposes on long term lease basis. In our view, there is merit in the appellant‟s plea that they were under bona fide belief that the allotment of vacant land to various persons on long term lease basis for construction of building for industrial purposes, would not attract Service Tax under Section 65(105)(zzzz). Therefore, in the circumstances of the case, in our view, longer limitation period of 5 years from the relevant date would not be applicable and the Service Tax demand would survive only for the normal period of one year from the relevant date, which would be quantified by the adjudicating authority. For the same reasons, this is also a fit case, where by invoking the Section 80 of the Finance Act, 1994, penalties under Sections 76, 77 and 78 have to be waived and in terms of this section notwithstanding anything contained in the provisions of Section 76, 77 and 78 of the Finance Act, no penalty shall be imposable on the assessee for any failure, referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure and in this case, the Appellant is an organization functioning under the Government of U.P. and obvious reason for non- payment of Service Tax is their bonafide belief that allotment of vacant land on long term basis for construction of structure/building for commend use would not attract Service Tax."
4.5 We do not find any merits in the contention of the appellant that the show cause notice is vague etc., impugned order has specifically considered this issue and after examination of the said show cause notice concluded that there is no vagueness. Even otherwise in our view till the time the show cause notice is able to communicate the allegations and reasons for the demand being made the same cannot be termed as vague. The show cause notice or in fact any document issued in course of transaction of Government business or in a judicial Service Tax Appeal No.70132 of 2015 15 proceedings is not a document of literature but only means of communication. Till the time the person or whom the said document is issued is able to read and respond to the same, it cannot be termed as vague.
4.6 We also do not find any merits in the submissions made by the appellant to the effect that show cause notice dated 21.05.2014 has been issued quoting the obsolete provisions and hence bad in law. Hon'ble Gujarat High Court in case of Petlad Bulkhidas Mills Co. Ltd. [2000 (126) E.L.T. 269 (Guj.)] "...... The lower Appellate Court has in Civil Appeal No. 385 of 1965 dismissed the suit on taking the view that the demand was made under Rule 9(2) of the Central Excise and Salt Rules, although it was competent under Rule 10 of the said rules and that the substance has to be looked into rather than mere to the form and that it was issued by a competent authority and within time. The learned Judge followed the ratio of the decision of a division Bench of this High Court in Jamnadas Chhotalal Desai v. C. L. Nangia, Deputy Collector, Central Excise, (1965) 6 G.L.R. 137. If the authority has incorrectly mentioned in the order a portion of the section, no prejudice is caused to the person liable to make the payment and the court would not strike down such an order for that reason only. It has been observed in that decision that the court would look at the substance rather than mere form and if it finds that the order has been made with jurisdiction though there is an error in citing a particular part of the section and no prejudice is caused to the petitioner, the court would not interfere and set aside the order. The learned District Judge thus allowed the appeal before him and set aside the decree of the trial court. It is against this decision that this second appeal is directed. Mr. K. S. Nanavaty, learned Advocate appearing on behalf of the appellant plaintiff, has not disputed the aforesaid proposition of law laid down by this court in 6 G.L.R. 137. His only contention is that the finding of the Service Tax Appeal No.70132 of 2015 16 learned District Judge that the duty has escaped payment due to error of misconception or exemption notification is not supported by any evidence inasmuch as the Inspector who had been alleged to have committed the error is not examined. There is no merit in this contention. The learned District Judge has observed in paragraph 9 of his judgment as under :-
"Before proceeding further in this connection, it must be made distinctly clear that it is not the plaintiff‟s case that as a fact excise duty was not leviable on the yarn cleared by the plaintiff from the place of manufacture as entered in register AR-1 Exhibits 35 to 50. It is not the plaintiff‟s case that since after the clarification issued by the Union of India this yarn cleared by the plaintiff would be exempt from the payment of duty. In fact, parties proceeded on the basis that excise duty is certainly payable on the yarn cleared by the plaintiff between 1st March, 1961 and 8th May, 1961 in respect of which the duty was not recovered under the belief of the officers of the Central-Excise Department that the yarn was exempt from the payment of duty. Mr. Shah for the respondent conceded that the court should proceed on the assumption that the duty was payable on this yarn and if the court comes to the conclusion that the demand notice is legal, the plaintiff‟s suit is liable to be dismissed. Thus, it is crystal clear that the yarn in respect, of which excise duty was not collected is the yarn on which duty was payable on a proper and correct interpretation of entry 18- A."
2.The only contention that appears to have been urged before the learned District Judge was that the demand notice under Rule 9(2) is bad. The non-examination of the Inspector was not material for the purpose. The authority that had passed the order had the jurisdiction to pass it. It was only a mere wrong reference of the power under which the action is taken by the officer which was in challenge.
Service Tax Appeal No.70132 of 2015 17 But, this would not vitiate the action done if it can be justified under some other power that the action can lawfully be taken. In the instant case, the duty could have been demanded from the plaintiff under Rule 10. If the sector officer could justify the demand legally, then a wrong reference would not invalidate the notice. The demand notice has thus been held to be not illegal or invalid."
4.7 In the case of The Elphinstone Spinning And Weaving Mills Co. Ltd [1978 (2) E.L.T. (J 399) (S.C.)] Hon'ble Supreme Court has observed:
"14. We are not inclined to accept the contention of Dr. Syed Mohammad that the expression „levy‟ in Rule 10 means actual collection of some amount. The charging provision Section 3 (1) specifically says "There shall be levied and collected in such a manner as may be prescribed the duty of excise......". It is to be noted that sub-section (1) uses both the expressions "levied and collected" and that clearly shows that the expression "levy" has not been used in the Act or the Rules as meaning actual collection.
Dr. Syed Mohammad is, no doubt, well founded in his contention that if the appellants have power to issue notice either under Rule 10-A or Rule 9 (2) the fact that the notice refers specifically to a particular rule, which may not be applicable, will not make the notice invalid on that ground as has been held by this Court in J.K. Steel Ltd. v. Union of India, (1969) 2 SCR 418 (AIR 1970 SC 1173) :
"If the exercise of a power can be traced to a legitimate source, the fact that the same was purported to have been exercised under different power does not vitiate the exercise of the power in question. This is a well settled proposition of law. In this connection reference may usefully be made to the decisions of this court in B. Balakotaiah v. Union of India, (1958) SCR 1052 = (AIR 1958 SC 232) ; and Afzal Ullah v. State of U.P., (1964) 4 SCR 1991 - (AIR 1964 SC
264)."
Service Tax Appeal No.70132 of 2015 18
15.In this case, the officer who issued the two notices is competent to make demands under both Rule 9 (2) and Rule 10-A. But in order to sustain the validity of the demand either under Rule 9 (2) or Rule 10-A, the appellants will have to go further and establish that the demands can be justified under either of the rules."
4.8 As we find that even after the introduction negative list regime with effect from 01.07.2012 onwards the activities undertaken by the appellant fall within the definition of service as per the Section 65B (44) and are taxable being not in negative list or exempted we are not inclined to accept the submission of the appellant in this respect.
4.9 Further impugned order after examination of the documents in respect of the Mandap Keeper Services have concluded that there is no evidence to the effect that these services were for the purpose of religious functions appellant have not countered the said findings by producing the relevant documents to show that these service were indeed rendered by them in respect of such religious ceremonies and functions. The reliance placed on the decisions in this respect is not correct as impugned order has recorded a finding of fact.
4.10 Thus in nut shell while we hold that in respect of both the show cause notices extended period of limitation cannot be invoked in view of decision referred in para 4.4, we are inclined to uphold the impugned order on merits. As we have held that extended period of limitation is not available for making these demands, we set aside the penalties imposed on the appellant under section 78.
4.11 However as appellant have failed to take registration and file the returns by the due date we uphold the penalties imposed under Section 77.
5.1 Appeal partially allowed as indicated in para 4.10 above. In the remand proceedings as per the impugned order adjudicating authority while re-computing the demand should limit it to the normal period of limitation.
Service Tax Appeal No.70132 of 2015 19 5.2 As matter is quite old adjudicating authority should recomputed the demand within three months of receipt of this order.
(Order pronounced in open court on- 07 January, 2025) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp