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2014 (5) TMI 986 - HC - Service TaxDemand of service tax - Clearing and Forwarding agents - extended period of limitation - Assessee contends that they were acting merely agent of the client and their activity did not come within the purview of Section 65(72) of the said Act, as they did not undertake services, normally rendered by Clearing and Forwarding agents - Third show cause notice issued while 2 notices already existing - whether on the date of issue of notice, all the ingredients of Section 73 (1)(a) of the Act were available - Penalty u/s 76 - Held that:- In the present case, there is no dispute that the appellant has filed return in ST-3 for the relevant period. It is not the case of the revenue also that notice under Section 73(1)(a) of the Act has been issued for non-filing of return under Section 70 for a presecribed period. Notice has been issued on the allegation that the appellant had not disclosed fully and truly all material facts required for verification of the assessment under Section 71 and it amounts to escaped assessment. First notice was server as on 18.4.2002 for the period 1.9.1999 till the date - assessee submitted the reply - second notice was issued on 12.5.2003, under Section 71(2) for verification of ST-3 returns for the period 1.9.1999 to 30.9.2003. - appellant filed reply on 28.5.2003 and submitted all the details. - no order was passed against both the notices - This shows that he was fully satisfied that there is no escaped assessement or has been under assessment. When the third notice under Section 73(1)(a) of the Act had been issued on 6.9.2003 by the Deputy Commissioner, in pursuance of which the impugned order has been passed, the complete facts and details relating to the impugned transactions, namely, copy of the contract, gross amount received, the amount received towards remuneration, etc. were made available, therefore, it cannot be said that at the time of issue of notice, there was any material with the Deputy Commissioner to believe that by reason of omission or failure on the part of the appellant to disclose fully and truly all material facts, the value of taxable service has escaped assessment or has been under-assessed or service tax has not been paid. Deputy Commissioner failed to make out any case that he had the material to believe that there was omission or failure on the part of the assessee to disclose fully and truly all material facts and, therefore, we are of the view that the Deputy Commissioner has illegally invoked the provisions of Section 73(1)(a) of the Act and exercised the power to raise the demand under Section 73(1)(a) of the Act. Since the demand is not sustainable, the consequential penalties are also not sustainable. - Decided in favour of assessee.
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