Custom, Excise & Service Tax Tribunal
Aman Enterprises vs Cce & St, Chandigarh-Ii on 11 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI
COURT NO. IV
SINGLE MEMBER BENCH
Appeal No. ST/59438/2013
(Arising out of OIA No.JAL-EXCUS-000-APP-065-13-14 dt.12.08.2013 passed by the CCE(Appeals), Chandigarh-II)
Date of Hearing: 28.08.2014
Date of Pronouncement:11.9.2014
Aman Enterprises Appellants
Vs.
CCE & ST, Chandigarh-II Respondent
Appearance:
Shri M.S.Dhaliwal, Consultant for the Appellants Shri V.P.Batra, DR for the Respondent CORAM:
Hon'ble Mr. Manmohan Singh, Member (Technical) FINAL ORDER No.53561/2014 Per MANMOHAN SINGH:
The present appeal has been filed by appellant against OIA No.JAL-EXCUS-000-APP-065-13-14 dt.12.08.2013 passed by the Commissioner (Appeals), Chandigarh-II. The Commissioner (Appeals) has confirmed service tax demand of Rs.97, 100/- under section 73 (1) of the Act alongwith interest under section 75. He also observed that the appellants have also suppressed the material facts from the department, therefore, the penalties have rightly been imposed upon the appellants under section 77 and 78 of the Act. However, the Commissioner (Appeals) has reduced penalty from Rs.1,37,899/- to Rs.91,100/- imposed under section 78 of the Act. The demand was reduced by the Commissioner (Appeals) after extending the benefit of exemption Notification No.6/2005-ST dt.1.3.2005. The appellant being aggrieved with the order of the Commissioner (Appeals), have come up in appeal before the Tribunal.
2. The facts briefly recapitulated to appreciate the issue are as under:-
The appellants are engaged in providing cleaning services to M/s.Punjab Alkalies and Chemicals Limited (PACL), Nangal, Distt.Ropar, Punjab. Superintendent of Central Excise, Range Naya Nangal vide letter C.No.CE-20/MISC/Cenvat Vfn/PACL/13/07/244 dated 03.12.2007 requested PACL to supply information regarding amount paid to the service providers in realtion to the said services. The information received from PACL vide their Ref.No.PACL:FIN:07:2561 dated 12.12.2007 revealed that the appellants received Rs.12,32,984/- for the period 2005-06 (from 16.06.2005) to 2006-07 in relation to cleaning service. It was imputed by the department that an amount of Service tax amounting to Rs.1,37,899/- (S.Tax Rs.1,35,195/-, Edu Cess Rs.2,704/-) had not been paid by the appellants. Demand for service tax in terms of the first proviso to sub-section (1) of section 73 alongwith interest under section 75 of the Act by invoking the limitation of extended period was raised. Penal action under section 75, 76,77 and 78 of the Act for failure to pay service tax for not obtaining registration and not filing ST-3 returns and for suppression/ concealing the value of taxable service was also proposed.
3. Appellants have come in appeal on the ground that the demand is time barred and extended period was not invokable under section 11A as there is no allegation of fraud, collusion or willful mis-statement or suppression of facts with intent to evade duty relying upon the judgment of Honble Supreme Court in the case of Union of India vs. Vilayat Hussain-1999 (108) ELT A59 (SC) and principal bench of CESTAT in the case of R.S.Travels vs. CCE, Meerut-2008 (12) STR 27 (Tri.-Del.). They also contested imposition of penalty and requested for waiving penalty under the provision of section 80 of Finance Act, 1994. Ld.Counsel submitted that they were under bonafide belief that they were not liable to pay service tax and no penalty was imposable under sections 76, 77 and 78 of Finance Act, 1994.
4. On the other hand, ld.DR reiterated the findings recorded by the Commissioner (Appeals) and submitted that the facts of the case are very clear that the appellant have suppressed the fact providing cleaning service to M/s.Punjab Alkalies and Chemicals Limited (PACL), Nangal, Distt.Ropar, Punjab. It was only on initiative taken by the Range Superintendent that information relating to the providing of service was provided by the appellant and after receipt of that information, notice was issued. It has also come on record that the appellants were not registered with service tax department and no service tax was being paid. Also no ST-3 returns were being filed with the department. In view of clear finding, he requested the court to uphold the order passed by the Commissioner (Appeals).
5. Heard both sides and also perused the records.
6. On going through the submissions made by both sides as well as perusal of records, it came out that M/s.Aman Enterprises have been engaged in providing cleaning service to M/s.Punjab Alkalies and Chemicals Limited (PACL), Nangal, Distt.Ropar, Punjab. After enquiry made by the department, it came out that the appellants were neither registered with the service tax department nor they have discharged service tax payable on the cleaning service. The Commissioner (Appeals) in para 7 of his order has clearly brought out suppression because they have never informed the department about taxable service. He also distinguished the judgement of Honble Supreme Court in the case of Union of India vs. Vilayat Hussain-1999 (108) ELT A59 (SC). He has rightly considered the fact of non-payment of service tax came to the knowledge of the department only once enquiries were started. In view of above, I find no force in the contention of the appellant that extended period of limitation is not invokable since willful suppression has clearly been manifested. Para 7.1 and 7.2 of the order of Commissioner (Appeals) are self explanatory.
7.1 Further, as regards the argument that after the facts of non-payment of services came into the knowledge of the department, any show cause notice served beyond the stipulated period of one year is time barred, it is observed that acquiring knowledge by the Department does not take away the period of five years provided by the Law Makers in the Act itself when Department came to know of the willful suppression with intention to evade payment of duty/service tax. In this regard, I also rely upon the judgement of Honble CESTAT, New Delhi (Larger Bench) in the case of Nizam Sugar Factory Vs.CCE, Hyderabad[1999 (114) ELT 429 (Tri.-LB)] where the Tribunal held that-
Relevant date has been defined in sub-section (3) to Section 11A and nowhere this sub-section provides that the relevant date means the date of acquiring the knowledge by the Department. As such acquiring the knowledge by the Department does not take away the period of five years provided by the Law Makers in the Act itself. We must not lose sight of the fact that extended period of limitation has been provided by the Law Makers with the clear intention that if a person has not paid the duty, which is due to the Government under law, on account of fraud, suppression, wilful mis-statement or contravention of Act or Rules with an intent to evade payment of duty, the Department can deprive him of his illegal benefit and/or demand the duty due to the Government within a period of five years from the relevant date.
7.2 Further I also rely upon the judgement of Honble High Court in the case of Commissioner of C.Ex, Surat-I versus Neminath Fabrics Pvt.Ltd.[2010 (256) ELT 369 (Guj.) wherein the Honble Court has held as under:
16.?The termini from which the period of one year or five years has to be computed is the relevant date which has been defined in sub-section (3)(ii) of Section 11A of the Act. A plain reading of the said definition shows that the concept of knowledge by the departmental authority is entirely absent. Hence, if one imports such concept in sub-section (1) of Section 11A of the Act or the proviso thereunder it would tantamount to rewriting the statutory provision and no canon of interpretation permits such an exercise by any Court. If it is not open to the superior court to either add or substitute words in a statute such right cannot be available to a statutory Tribunal.
20.?Thus, what has been prescribed under the statute is that upon the reasons stipulated under the proviso being satisfied, the period of limitation for service of show cause notice under sub-section (1) of Section 11A, stands extended to five years from the relevant date. The period cannot by reason of any decision of a Court or even by subordinate legislation be either curtailed or enhanced. In the present case as well as in the decisions on which reliance has been placed by the learned advocate for the respondent, the Tribunal has introduced a novel concept of date of knowledge and has imported into the proviso a new period of limitation of six months from the date of knowledge. The reasoning appears to be that once knowledge has been acquired by the department there is no suppression and as such the ordinary statutory period of limitation prescribed under sub-section (1) of Section 11A would be applicable. However such reasoning appears to be fallacious inasmuch as once the suppression is admitted, merely because the department acquires knowledge of the irregularities the suppression would not be obliterated.
7. In view of above, I do not find force in the submissions of the appellant and find that the Commissioner (Appeals) has rightly gone into the allegation as contained in the show cause notice and passed well reasoned adjudication order.
8. In view above, appeal is rejected.
(Pronounced in the open court on 11.9.2014) (Manmohan Singh) Member(Technical) mk 6