Calcutta High Court (Appellete Side)
M/S. Indus Integrated Information ... vs The Principal Commissioner Of Service ... on 6 April, 2017
Author: Aniruddha Bose
Bench: Aniruddha Bose
1
.2017
MAT No. 348 of 2017
CAN No. 2636 of 2017
M/s. Indus Integrated Information Management & Ors.
Vs.
The Principal Commissioner of Service Tax-I, Kolkata
Mr. J. K. Mitta,
Mr. Paritosh Sinha,
Mr. Amitava Mitra,
Mr. Prayag Chaturvedi.
...for the appellants.
Mr. Somnath Ganguli,
Mr. Bhaskar Prasad Banerjee.
...for the respondents.
Affidavit-of-service is filed in Court today. Let the same be kept with records. The present appeal has its origin in a notice to show cause issued by the Commissioner of Service Tax on 17th October, 2012. This notice required the appellants to respond, inter alia, to the demand of the Revenue under the following heads:-
"9. The said assessee is, therefore, required to show cause to the Commissioner of Service Tax, Kolkata, 3rd Floor, Central Excise & Service Tax Bhawan, E.M. Bypass, 180, Shanti Pally, Kolkata-700107 within 30 (thirty) days of receipt of this notice as to why:-
(a) the amount of Service Tax to the tune of Rs.3,52,57,141/- (Rupees Three Crores fifty two lacs fifty seven thousand one hundred and forty one only)Education Cess of Rs.7,05,143/- (Rupees Seven lacs five thousand one hundred and forty three only) and S.H.E. Cess of Rs.3,52,572/-
(Rupees Three lacs fifty two thousand five hundred and seven two only) totalling to Rs.3,63,14,856/- (Rupees Three Crores sixty three lacs 2 fourteen thousand eight hundred and fifty six only) which was not paid for the period 2007-08 to 2011-12 [as shown in Annexure -A] and which includes amount of Rs. 1,19,33,424/- collected from the recipients of taxable service but not paid to the credit of the Central Government [as shown in Annexure-B] should not be demanded and recovered from them by invoking extended period of limitation under proviso to Section 73(1) of the said Act and under Section 73(A)(3) of the said Act as discussed herein above;
(b) interest at the appropriate rate on the said amount of Service Tax, cess, totaling to Rs.3,63,14856/- (Rupees Three Crores sixty three lacs fourteen thousand eight hundred and fifty six only) as due should not be demanded and recovered from the said assessee under Section 75 of the said Act and also interest in respect of the above-mentioned Service Tax amounting to Rs. 1,19,33,424/- which was collected from the recipients of taxable service but not paid to the credit of the Central Government should not be demanded and recovered from the said assessee under Section 73(B) of the said Act;
(c) penalty under Section 77 of the said Act should not be imposed upon the said assessee for non obtaining Service Tax Registration Certificate for other services and non-submission of periodical ST-3 returns in respect of the said services as discussed earlier;
(d) penalty under Section 78 of the said Act should not be imposed upon the said assessee for wilful suppression of taxable value realized by the said assessee and for violation of the above mentioned provisions of the said Act and the said Rules;
10. Shri Kushal Maitra, Director is also required to show cause before the Commissioner of Service Tax, Central Excise and Service Tax Bhawan, 3rd Floor, 180 Rajdanga Main Road, Shanti Pally, Kolkata-700017 within 30(thirty) days of receipt of this notice as to why penalty in terms of Section 9AA of the Central Excise Act, 1944 as made applicable to Service Tax vide Section 83 of 3 the Finance Act, 1944 should not be imposed on him for all the aforesaid acts of omission or commission of the assessee resulting in evasion of Service Tax." The total demand was of Rs.3,63,14,856/-(rupees three crore sixty three lakh fourteen thousand and eight hundred fifty six only). There had been adjudication proceeding thereafter and the adjudicating authority confirmed part of the demand of Rs.2,35,83,131/- and dropped the rest of the demand. Penalty of Rs.2,35,83,131/- was however imposed. This order was passed by the adjudicating authority on 15th March, 2016. On a writ petition filed by the appellants, the aforesaid order was set aside by a learned Single Judge of this Court on 19th May, 2016. That writ petition was registered as W.P. No. 9224(W) of 2016. In the order, however, the appellant was required to deposit a sum of Rs.1,00,00,000/- (rupees one crore), as a condition for the invalidation order being made operational. This was to be followed by adjudication afresh. Thereafter, fresh adjudication proceeding had started and it is the contention of the appellant that certain findings in the first adjudication proceeding which went in favour of the appellant were reversed and the appellant was held liable under those heads as well in the second adjudication proceeding. In this adjudication proceeding, the entire demand in the show cause notice was confirmed, though the first adjudicator had dropped part of the demand. The appellant challenged the second adjudication order, which was passed on 18th August 2016 by instituting a writ petition, registered as W.P. No. 26336(W) of 2016. The main ground of challenge to the order passed in the second adjudication proceeding was that the points decided against the appellant were beyond the scope of the show cause notice. The learned First Court dismissed the writ petition, inter alia, holding: 4
"The applicability of the section under which the petitioners have been charged is not substantiated to be incorrect. Although there are differences between Section 73A and Section 73 of the Act of 1994, the assessee was well aware of the charges levelled against it. The assessee had answered the charges. The objections were duly considered and negated in the impugned order."
Mr. Mittal, learned Counsel for the appellant submits that his clients had enjoyed an interim order of stay during the pendency of the writ petition. Moreover, he points out that the appellant has already diposited approximately Rs.2.19/- crores (rupees two crores nineteen lakhs) taking into account Cenvat Credit.
Mr. Ganguly, learned Counsel opposes the prayer for interim order appearing for the respondents. On prima-facie assessment of comparative strength of the rival cases and further considering the fact that substantial part of the demand already stands deposited and that the appellant was enjoying an interim order during pendency of the writ petition out of which the present appeal arises, we stay the operation of the impugned judgment and order until disposal of the appeal. We also pass an interim order until disposal of the appeal in the same terms that was granted by the learned Single Judge on 22nd December, 2016 in the second writ petition. Copy of that interim order has been annexed to the stay petition at page 259 and marked "P9". This order will dispose of the stay application.
The entire pleadings before the learned Single Judge has been incorporated in the stay petition. We shall hear the appeal treating the stay petition as the paper book. We dispense with the requirement of the filing of paper book and also notice of appeal, to 5 which arrangement Mr. Ganguly has agreed. Other formalities so far as finalisation of the appeal papers also stand dispensed with.
We shall take up the appeal for hearing at 2 p.m. on 11th May, 2017. Original certified copy of the judgment has been filed in Court today. The memorandum of appeal contains only copies obtained from the website of this Court. Let the certified copy of the impugned judgment be retained with the records. CAN No. 2636 of 2017 is disposed of accordingly.
Urgent photostat certified copy of this order be given to the parties expeditiously, if applied for.
(Aniruddha Bose, J.) (Arindam Sinha, J.) 6