TMI Blog2010 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the assessee - ST/343/2006 - 1293/2010 - Dated:- 20-10-2010 - S/Shri M.V. Ravindran, P. Karthikeyan, JJ REPRESENTED BY : Shri M.S. Srinivasa, Advocate, for the Appellant. Smt. Sudha Koka, SDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. - This matter arises before us for the second time. The impugned order was passed pursuant to Tribunal s Final Order No. 861/2006 dated 8-5-2006 setting aside the Order-in-Original No. 8/2005 dated 29-11-2005 impugned had been passed without hearing the appellants. The present impugned order confirmed an amount of Rs. 79,43,346/- along with applicable interest against the appellants M/s. The People Choice, Bangalore (TPC for short) towards the taxable services classified under Security Agency Services rendered during the period 16-10-1998 to 31-3-2004 and Rs. 20,05,224/- towards the service tax classified under Business Auxiliary Services rendered by the appellants during the period from 1-7-2003 to 31-3-2004. A penalty of Rs. One crore is imposed on the appellants under Section 78 of Finance Act, 1994 (the Act). Show cause notice decided by the impugned order had proposed the following : (i) Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 2004. During the above period they had received a gross sum of Rs. 15,95,08,866/- as charges for security service rendered and the service tax liability on the said sum worked out to Rs. 79,43,346/-. (ii) TPC, were rendering other services like providing drivers/receptionists/loaders and unloaders/operators/nurse/male nurse/ office assistant/house keeping etc. which appeared to be classifiable under Business Auxiliary Services on which service tax had been imposed from 1st July, 2003 and the same had not been paid by them. The assessee contested the allegations. The Commissioner rejected the arguments of the appellants against the proposals in the show-cause notice. 2. The assessee had argued that the larger period could not be invoked in their case and the demand was time-barred. No service tax was liable to be paid by them in respect of services rendered. It was also argued that in any case, they were not liable to pay service tax on the services rendered to various 100% EOUs as per CBEC Circular No. ST-56/5/03, dated 25-4-2003. The taxable value of the service had to be treated as inclusive of service tax and they were entitled to adjust accordingly. Providing driv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was an intention on the part of the appellants to evade payment of tax or that any of the elements mentioned in the provisions of the amended Section 73 was present in this case. From the narration in the show cause notice, the various statements recorded and the clarification of the department on 29-4-2004, it could be seen that the appellants held the bona fide belief that they were liable to pay service tax only after collecting the same from the customers. Mere non-filing of returns or non-payment of service tax, without deliberate intention to withhold information from the department, could not justify the invocation of the extended period of limitation under Section 73. 3.2 Present dispute involved interpretation of complex provisions of service tax law. Therefore, imposition of penalty was not warranted. The appellants relied on the following decisions : (i) Ispat Industries Ltd. v. CCE [2006 (199) E.L.T. 509 (Tri.-Mum.)] (ii) Secretary, Town Hall Committee v. CCE [2007 (8) S.T.R. 170 (Tri.-Bang.)] (iii) CCE v. Sikar Ex-Serviceman Welfare Coop, Society Ltd. [2006 (4) S.T.R. 213 (Tri. - Del.)] (iv) Haldia Petrochemicals Ltd. v. CCE [2006 (197) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and were incorrect. Assuming but not admitting that the services of providing nurses, male nurses, receptionists, drivers, etc., attracted service tax, it could be taxable with effect from 16-6-2005 when manpower recruitment agency service was rechristened as manpower recruitment and supply agency services. The Commissioner had erred in not deducting the value of services provided to 100% EOUs in computing the demand. 3.6 The Commissioner had wrongly concluded that the turnover declared in the profit and loss account was not the same as the value of service declared in the ST-3 returns. The profit and loss accounts reflected turnover on account of various activities of the appellants and the amount totally billed, whereas ST-3 returns indicated the actual realization relating to value of security service only. The show-cause notice invoked Section 73(1)(a) as it stood during the period prior to 10-9-2004. The appellant had filed returns for the period 10/98 to 3/02 on 18-4-2002. In such cases, provisions of erstwhile Section 73(1)(b) applied. The show-cause notice should have been issued within one year from the date of filing of the returns, within 18-4-2003. The sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. We have carefully considered the case records and the rival submissions. In the impugned order, the Commissioner confirmed the proposal to demand service tax of Rs. 79,43,346/- and Rs. 20,05,224/- respectively under the category security agency service and business auxiliary service without giving any finding on the contentions of the assessee either on merits or on limitation. The Commissioner observed that the appellants had not substantiated its claim of providing services to 100% EOUs; the documents were not certified by the Chartered Accountant, instead the assessee themselves had signed the statements/calculation sheets. The Commissioner rejected the plea of the assessee that demand of the service tax could not be raised invoking provisions of Section 73 as it stood prior to 10-9-2004. He held that the demand did not suffer from any legal infirmity. 6.1 From the impugned order, we find that the departmental authorities gathered from the financial records of the assessee such as balance sheets, profit and loss accounts, ledger accounts, etc. that it had raised an amount of Rs. 15,95,08,866/- during 16-10-2002 to 31-3-2004 as charges for security services render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax has not been paid or has been short paid or any sum has erroneously been refunded , or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Assistant Commissioner of Central Excise or, as the case may be, Deputy Commissioner of Central Excise has in consequence of information in his possession, reason to believe that the value of any taxable service assessable in any prescribed period has escaped assessment or has been under-assessed or service tax has been paid or has been short-paid or any sum has erroneously been refunded, he may in cases falling under clause (a), at any time within five years, and in cases falling under clause (b), at any time within one year, from the relevant date, serve notice on the person chargeable with the service tax which has escaped assessment or has been under assessed or has not been paid or has been short paid, or to whom any sum has been erroneously refunded, requiring him to show cause why he should riot pay the amount specified in the notice. Explanation - Where the service of the notice is stayed by an order or a court, the period of such stay shall be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E. (N.T.), dated 31-3-2000, without saving clause in the said notification. The department could not proceed with the show cause notice under Section 38A of the Central Excise Act, since no vested right had accrued to the department nor any liability had been incurred by the appellants. Hence the show-cause notice did not survive ab initio. The Tribunal held that law applicable on the date of show cause notice had to be invoked. The show cause notice issued in that case invoking Rule 57-I was held to be not sustainable. We also note that Section 38A of Central Excise Act provides for protecting right acquired or liability incurred under any rule or notification or order made or issued under the Central Excise Act. This section was made applicable to Service Tax only in the year 2007. In any case, this section does not provide for protecting right accrued under a repealed provision of the Act. In the case of Sunrise Structurals Engg. Ltd. Ors. (supra), the Tribunal followed a judgment of the Bombay High Court in Standard Mills Co. Ltd. reported in [1998 (229) ITR 366] and held that the show-cause notice issued by the Central Excise Department demanding duty from the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not put also the assessee on notice as to how it had incurred the liability to demand covering a larger period is not sustainable. 7. As regards the demand of service tax under the head business auxiliary service , we find that the relevant provisions contained in Section 65(19) read as follows : Business auxiliary service means any service in relation to,- (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) Promotion or marketing of service provided by the client; or (iii) Any customer care service provided on behalf of the client; or (iv) Any incidental or auxiliary support service such as billing, collection or recovery of cheques, accounts and remittance, evaluation of prospective customer and public relation services, and includes services as a commission agent, but does not include any information technology service. We find that the demand is under sub-clause (iv) of Section 65(19). This sub-clause refers to service such as billing, collection or recovery of cheques, accounts and remittance incidental or auxiliary to the other services enumerated in sub-clause (i), (ii) (iii). In the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this ratio does not apply to the facts of this case. (v) In Pradyumna Steel Ltd. case (supra), Supreme Court held that mere mention of a wrong provision of law when the power exercised was available even though under a different provision, was by itself not sufficient to invalidate the exercise of that power. In this judgment, the Apex Court upheld invocation of a wrong provision in a case where a person on whom the penalty was imposed had been put on notice as to the entire allegation of offending transactions by him. In the subject case obsolete provisions were invoked. This case is not relevant to the present case. (vi) In Geedeelon Texo-Twist (P) Ltd. case (supra), the Tribunal held that quoting of wrong section or non-quoting of specific section of Customs Act in show-cause notice did not vitiate the proceedings. This finding was also in a case where the allegations were explained in the notice. (vii) In Lanjekar Sales Corporation case (supra), the charges against the assessee were clearly spelt out in the show-cause notice. In that case, the Tribunal held that mere mention of wrong provision of law when power exercised was available even though under a different provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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