TMI Blog2014 (1) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... at Kolkata and their profit and loss account and balance sheet had been accordingly, prepared at the Kolkata office, on the inputs received in the form of Trial balances from the respective branch offices, as per the provisions of Companies Act, hence, there cannot be any doubt that there has been a centralized accounting system at Kolkata - Commissioner has jurisdiction to decide the issue of non-payment of Service Tax on the taxable value received by the Appellant for the services rendered through various branch offices and the value of such services duly accounted for, finally in their consolidated Balance Sheet and Profit & Loss account, prepared at Kolkata - Decided against assessee. Classification of service - Services rendered to various Electricity Boards, Cement companies - Whether such services would fall under the category of Clearing and forwarding agent - Held that:- Commissioner in the impugned order had recorded a finding that the amount received on account of freight financing were part of clearing and forwarding services rendered by the Appellant connected with clearing and forwarding operation of coal. He has also observed that the value for Service Tax did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and. Penalty and/or interest, if any, be determined, accordingly - Decided partly in favour of assessee. - ST/30/2007 - Final Order No. A-84/KOL/2013 - Dated:- 2-4-2013 - Shri S.K. Gaule, Member (T) and Dr. D.M. Misra, Member (J) Shri N.K. Poddar, Sr. Advocate, for the Appellant. Shri N.C. Roy Chowdhary, Sr. Advocate, for the Respondent. ORDER This is an appeal directed against the order-in-original No. 21-22/COMMR/ST/KOL/2006-2007, dated 31-3-2007 passed by the Commissioner of Service Tax, Kolkata. 2. Briefly stated facts of the case are that the appellant had entered into contracts with various Electricity Boards, Cement manufacturers, etc. during the period from 1-9-1999 to 31-3-2004 for providing various services relating to movement of coal from collieries to the respective power houses, cement companies, etc. at a consideration, agreed between the appellant and the said clients. On the basis of intelligence, and subsequent investigation, it was alleged that the appellant during the aforesaid period had provided services under the category of Clearing and Forwarding Agents but failed to comply with the formalities required under the Finance Act, 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under different jurisdictions. It is his submission that appellant had neither opted nor made any application for centralized registration prior to 2nd November, 2005. Hence, the Rule as was in force, only be applicable to the facts of the present case. 3.3 It is the contention of the ld. advocate that sub-rule (2) of Rule 4 of the said Rules clearly provides that an assessee may opt for centralized registration only when it has a centralized billing system. In other words, centralized registration at the material time was depending upon two conditions, namely, centralized billing system maintained by an assessee and secondly, exercise of option by the assessee for centralized registration. In absence of fulfilment of any of these conditions, centralized registration, was not at all possible. He has submitted that in that event, sub-rule (3) of Rule 4 of the said Service Tax Rules, would be attracted, wherein it is prescribed that an assessee providing taxable service from more than one premises or offices and does not have any centralized billing system, it has no option but to make separate application for registration in respect of each of such premises or offices to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys, shortage of wagons, etc., on a day-to-day basis to facilitate the planning and scheduling coal movement and coal stock at the Power Stations; (c) Monitoring that proper indents are placed by the Coal Mining Companies for the railway wagons; and following up such indents for allotment of coal wagons by the Railways; (d) Obtaining day-to-day program of movement of coal from the collieries as well as the Railways, and keeping the clients informed about such movement; (e) Supervising loading of coal to ensure that desired quality of coal is loaded to the full carrying capacity of the railway wagons, without there being any overloading and/or under-loading; (f) Monitoring the quality and size of coal during loading, so as to minimize the incidence of loss of coal during transit, as also to ensure that oversize, lumpy coal, extraneous material, muddy coal, wet coal with excessive surface moisture is not loaded in the wagons; (g) Monitoring supply of requisite quantity of coal, through proper weighment of loaded wagons, at the weigh bridges functioning at the Railway sidings of coal fields; (h) Ensuring that the Coal Mining Companies do obtain Rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow : i. The Clearing and Forwarding agents are engaged/appointed by Manufacturer of goods (both excisable and non-excisable goods), producers and distributors of goods and shall also include such agents appointed for agricultural and mineral goods. ii. Normally there is a contract between the principal and the Clearing and Forwarding Agent detailing the terms and conditions and also indicating the commission or remuneration to which the C F Agent is entitled; iii. A Clearing and Forwarding Agent normally undertakes the following activities - a. receiving the goods from the factories or premises of the Principal of his agents; b. warehousing these goods; c. receiving dispatch orders from the Principal; d. arranging dispatch of goods as per the directions of the Principal by engaging transport on its own or through the authorized transporters of the Principal; e. maintaining records of the receipt and dispatch of goods and the stock available at the warehouse; f. preparing invoices on behalf of the Principal. iv. For the services rendered, the C F Agent receives, from the Principal, commission or remuneration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstand its meaning in common parlance. Referring to the definition of clearing agent , in Advanced Law Lexicon (Third Edition 2005) and the meaning of Clearing as defined under the Random House Compact Unabridged Dictionary, the ld. Advocate submitted that the activity of clearing thus involves freeing of ship or cargo. In the present case, there has been a contract of sale between the Coal Mining Companies and the State Electricity Boards. Accordingly, the Coal companies are responsible for loading the coal into the Railway wagons which are directed to reach destination already specified by the State Electricity Board. There is no occasion for the appellant to clear the coal at any stage whatsoever hence they could not be lawfully called as the clearing agent. 3.14 The ld. Advocate further referring to the definition of forwarding agent in Black s Law Dictionary (Fifth Edition), Advanced Law Lexicon (Third Edition-2005), West s Legal Dictionary by William Statsky (1985 Edition), Penguin Business Dictionary, P.G. Osborn S.T Grandage, Oxford English Dictionary (Words and Phrases (Permanent Edition- Volume 17) (WP) and that from the activity of forwarding agent mentioned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had observed that if one renders service as forwarding agent without rendering any service as clearing agent, he cannot fall within the tax net of Clearing Forwarding agent as both services have not been rendered by him. He has contended that Coal companies are responsible for loading the coal into Railway wagons in terms of contract of sale with the State Electricity Boards and hence there was no occasion for the appellant to clear the coal at any stage, whatsoever and/or to deal with the goods from the collieries to consumption sites. 3.17 Analyzing the meaning of forward, forwarder, forwarding agent, etc. he has submitted that forwarding agent or the freight forwarding company must necessarily receive/take goods into his or/custody for transit, warehouse it and issue Bills of Lading, other documents for transportation of the goods, for or on behalf of the Principal, act as an agent for the owner of the goods to make arrangements with the carrier who would carry the goods viz. Ship owners, Railway Authorities, etc. for delivery, whereas, in the present case, there was no occasion for the appellant to take over the custody of the coal and or actually deal with the coal from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Advocate submitted that the decision of Kolkata Bench of the Tribunal in Coal Handlers Pvt. Ltd. v. CCE - 2004 (171) E.L.T. 191 (Tri. - Kol.) = 2006 (3) S.T.R. 286 (T), is no longer a good law, since the said decision was wholly based on an earlier decision of the Tribunal in the case of Prabhat Zarda Factory (India) Ltd. v. CCE, Patna - 2002 (145) E.L.T. 222 = 2006 (2) S.T.R. 584 (T), which decision has been specifically overruled by the Larger Bench of the Tribunal in L T case (supra). 3.20 The ld. Adv. further submitted that the activities rendered by the appellant are specifically covered under Sub-clause (iv) of Section 65(19) of Chapter V of the Finance Act, 1994, w.e.f. 10th September, 2004 and reading with the explanation inserted therein subsequently by the Finance Act, 2005 w.e.f. 16-6-2005. It is his submission that if such cases were already covered under the category of clearing and forwarding agents then there was no need for the Parliament to specifically amend the statute by the Finance Act, 2004 and Finance Act, 2005. It is his argument that subsequent amendments of 2004 2005 indicate that the appellant were not covered earlier under the category of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had received the service charge calculated @ 1.69% of the amount of Railway freight pre paid by it on behalf of Gujarat Electricity Board. It is his submission that this activity of freight financing did not come under the alleged classification of clearing and forwarding agent. He has submitted that transport of goods by rail service was brought into the Service Tax net only in the year 2009. Initially, the services provided in respect of transportation of goods in containers by rail were made taxable from 1-5-2006, but its scope was expanded w.e.f. 1-9-2009. Since the present case involved was prior to 31-3-2004, there was no liability to Service Tax on transportation of goods by Railways. He has submitted that the judgment of the Tribunal in Bhagyanagar Services v. Commr. of Central Excise, Hyderabad - 2006 (4) S.T.R. 22 (Tri. - Bang.) supports their case instead of the Revenue. 3.23 The ld. Advocate referring to the meaning fraud, wilful mis statement, collusion, etc. submitted that the present demand is barred by limitation. In this connection he has Referred to the judgments of the Hon ble Apex Court in the case of Cosmic Dye Chemical v. CCE - 1995 (75) E.L.T. 721 (S.C.), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on receipt of the said show cause notice, the appellant had made an application on 2nd November, 2005 for centralized registration under Section 69 of the Finance Act, 1994 read with Rule 4 of Service Tax Rules, 1994 before the Commissioner of Service Tax, Kolkata. The appellant had filed reply to the said notice on 8-2-2006 and the Adjudicating Authority passed the present order on 31-3-2007 by directing the appellant to pay the said amount of tax, interest along with penalty. The main grounds of the said order are as follows : (a) In the instant case, Noticee No.-1 undertakes activities that result in the clearance of coal from the collieries. These activities also result in the forwarding of coal so cleared to the destination of the coal consumers. It is Noticee No.-1 who maintains liaison, ensures the timely placing of wagons, supervises loading, ensures quantity, size and quality, ensures safe transit, ensures that goods are not lost in transit, informs the coal consumers of the receipt and dispatch, ensures that the required quantity of coal be supplied to the coal consumers and pays freight. There should not be any doubt that such activities belong to the realm and defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay [1995 (75) E.L.T. 721 (S.C.)], CCE v. Chempher Drugs Liniments [1989 (40) E.L.T. 276 (S.C.) and Cipla Ltd. v. CE, Mumbai [2001 (137) E.L.T. 972 (T)] in support of their contention. I cannot accept the contention of Noticee No.-1. It has already held that they are a Clearing and Forwarding Agent. The position of law was not ambiguous during the period under dispute. CBEC vide circular dated 10-12-2003 reiterated the position of law already existing. Therefore, there is no escape from the conclusion that Noticee No.-1 did not apply for registration and did not furnish with returns only with intent to evade payment of tax. I am of the considered opinion that in the facts and circumstances detailed and discussed hereinabove, the longer period of limitation has been correctly invoked. [Pg - 91 of the Paper Book - Vol-1]. 4.2 In response to the preliminary objection raised on behalf of the appellant, that the Commissioner lacks jurisdiction to decide the case, the ld. Sr. advocate for the Revenue has submitted that the point of jurisdiction was never taken by the appellant in their reply to SCN or before the Adjudicating Authority, hence, the appellant should not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction of coal merchants would fall under the category of Clearing and Forwarding Agent as per the clarification dated 10-12-2003, which are applicable to them. 4.4 Referring to the judgment of this Tribunal in Coal Handlers Pvt. Ltd. case, (supra) the ld. Sr. Advocate submitted that the definition of Clearing and Forwarding Agent refers to a person who has been engaged for providing any service, either directly or indirectly connected with clearing and forwarding operations in any manner to any other person and inclusive of a consignment agent. He has submitted that the use of the expression any and indirectly in the said definition of clearing and forwarding agent, indicative of the fact that the scope of the services to be provided by clearing and forwarding agent, is very wide; he is not the person who actually deals with the goods to be termed as clearing and forwarding agent, but even if the services are indirectly and if the same are connected with clearing and forwarding operations, in any manner, to the other persons, would be covered within the scope of the said definition. It is his submission that the appellant in the instant case render their services in all s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed and/or suppressed the material documents, especially the contracts between them and different power houses, Cement Companies; thus, the question needs for determination is, whether they did that wilfully or in a bona fide manner resulting into failure to discharge the Service Tax. It is his contention that the appellant did not disclose and/or suppressed the relevant contracts/documents with an intention to evade payment of Service Tax for the work of clearing and forwarding agent rendered to their clients. Summarizing his argument on the issue of limitation, the ld. Sr. Advocate submitted that the Board s Circular No. B. 43/7/1997-TRU, dated 11-7-1997 clearly included the contractual work of the Appellant under clearing and forwarding agent; the said circular is one of the examples of clearing and forwarding agent and not exclusive of other action and job which would amount to clearing and forwarding agent. He has submitted that the appellant has not given any ground, nor any evidence which would show that they could not have been carrying out clearing and forwarding work and as such the action was bona fide. 4.7 He has further submitted that the principles of law laid do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mixed question of fact and law, hence, the Appellant ought to have been raised the same before the adjudicating authority so that a finding on the facts could have been recorded by him. Having not raised it, at any time during entire adjudication proceeding, the appellant should not be allowed to raise the same before this forum, at this stage. 5.2 We find that no doubt, the issue of jurisdiction being fundamental one, as it questions the legality and maintainability of the Order, and thus, goes into the root of the matter, and it is a settled principle of law that the issue of jurisdiction could be raised at any stage of the proceeding, but, simultaneously, it also cannot be denied that when the territorial jurisdiction, is an issue, it becomes a mixed question of fact and law, hence, the same should have been raised at the threshold of the proceeding, so as to enable the adjudicator to record a finding on the facts. However, from the records and arguments advanced by both sides, we find that the facts relevant to decide the issue of jurisdiction, now raised before this forum, are not in dispute and available on record. In these circumstances, we are of the opinion that it is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t those locations. We find that investigation was initiated on the basis of specific intelligence collected by the officers of DGCEI, Jamshedpur that the appellant though engaged in rendering the services of clearing and forwarding agent from its branch offices and payments were received from respective clients but neither registered with the Department nor paid any Service Tax. Necessary data relevant to the services rendered by the Appellant were collected from their registered office at Kolkata and the concerned person was also interrogated by the officers of DGCEI during the course of investigation. The Appellant furnished the necessary data from time to time as per the direction of the said officers. In these circumstances, we do not find merit in the argument of the ld. Sr. Advocate for the Appellant that the Commissioner would assume jurisdiction only when they exercise option for centralized Registration, on account of either having centralized billing system or centralized accounting system, in adjudicating the allegation of non-payment of Service Tax on the gross taxable value of the services received and recorded in their consolidated Profit Loss account, prepared at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coal companies for issue of consent; (iii) To make all the efforts to be first in queue to avoid lapse of the programmed quantity; (iv) To submit the Coal companies consented programs to the Railways for sanction of programs; (v) To follow up with the Railways for allotment of wagons against sanctioned programs and try to avoid the long gap in the allotment of wagons. As soon as the wagons are allotted by Railways, the principals are informed accordingly; (vi) To liaison with Railways Authorities for placement of wagons at the colliery siding for loading of coal and co-ordinate with the Local Railway yards for supply of inspected wagons to avoid or minimize the Railway claims on account of detachment of wagons during transit; (vii) To supervise coal loading and to ensure dispatch of quality coal, as far as possible. In case of quality complaint KCT have to take up the matter suitably with the respective authority of Coal Companies for necessary corrective steps; (viii) To supervise the weighment of each and every wagon at the weighbridge and to take all corrective steps to ensure the quantity of the coal; (ix) To undertake all such other acts/works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not fall under the definition of clearing and forwarding agent as prescribed at Sec. 65(25) of the Finance Act, 1994. In other words, it is his submission that the meaning of the expression Clearing Forwarding Agent , under the Finance Act, 1994, be construed strictly and its scope be limited to the services rendered by a person involving both clearing services and forwarding services, as understood in common parlance. 5.12 The Ld Sr. Adv. Shri Roy Chowdhary for the Revenue, on the other hand, submitted that the meaning of the said expression cannot be restricted or narrowed down as the intention of the legislature was to provide a wider meaning to the expression clearing forwarding agent , defined under the Finance Act, which Is apparent from the use of the words directly , indirectly, connected with any manner , etc.. 5.13 On a simple reading of the definition of Clearing and Forwarding Agent at Section 65(25) of the Finance Act, it is clear that the same consists of following ingredients, namely : (i) Any person who is engaged in providing any service; (ii) either directly or indirectly; (iii) connected with the clearing and forwarding ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the collection, forwarding and delivery of goods; The Compact edition of the Oxford English Dictionary : One whose business is receiving and shipment or transmission of goods , the ld. Sr. Adv. submitted that a forwarding agent has to dispatch goods strictly in accordance with the instructions of its principal. It is his contention that in the present case the destinations of delivery of coals have been fixed and known in advance both to the buyer and seller of the coal, the railway rakes were accordingly placed for the said destinations and hence there had been no occasion for their principals i.e. power houses, cement companies to instruct the Appellant about the destinations for the delivery of coal; besides, at no point of time the Appellant took over the custody/possession of the coal, hence, the activities carried out by the Appellant, do not match with services rendered by a forwarding agent. Further, it is his argument that the list of activities normally carried out by a clearing forwarding agent as mentioned in the Circulars issued by the Mumbai Commissionerate and by the CBEC from time to time, had also not been carried out by the Appellant, and accordingly, the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re loading of the coal in railway wagons by the collieries and its automatic onward movement to the pre-determined destination for consumption, but, the Appellant are required to ascertain the correct quality and quantity of coal through strict supervision before or at the time of its loading in the railway wagons, which indicates that they have the requisite authority as an agent for their principal, to receive only the agreed quality of coal and reject the coal which are not conforming to the specifications sold by the collieries to their principals. No doubt after the coal were loaded in the wagons, the same move to the destinations already fixed, but all related services till the coal reaches its destination were rendered by the Appellant. Thus, we find force in the argument advanced by Shri Roy Chowdhary, ld. Adv. for Revenue that the services rendered by the Appellant are connected with clearing and forwarding operations. 5.20 From the meaning and scope of Forwarding Agent, as per Halsbury s Laws England (Fourth Edn. - Vol. V), (Referred to by the Appellant in their Grounds of Appeal) in forwarding the goods, a forwarding agent need not always take possession of the goods, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as : 5. The appellants have agreed that the issue involved stands decided in the case of Prabhat Zarda Factory (India) Ltd. (supra). The Tribunal under the said judgment has observed that as per definition of clearing and forwarding agent, he is a person who is engaged for providing any service, either directly or indirectly connected with clearing and forwarding operations in any manner to any other person and includes a commission agent. The use of the expression any and indirectly in the said definition of clearing and forwarding agent, is indicative of the fact that the scope of the services to be provided by clearing and forwarding agent is quite wide. He is not only the person who is actually dealing with the goods, which has to be termed as clearing and forwarding agent, but even if the services are indirect and if the same are connected with the clearing and forwarding operations in any manner of the other persons, he would be covered within the scope of the said definition. The appellants in the instant case render their services in all the sections of pre load of the coal rakes i.e. obtaining consent on behalf of their customers, sanctions from the office of Exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded. A person entrusted with the work of commission agent for procuring orders for the principal cannot insist on also providing services as clearing and forwarding agent in respect of those goods and it would be open for the principal to engage some other person for the purpose of forwarding such goods. In cases where the buyer is under an obligation to take delivery of the goods from the vendor s premises, there would not be even any need on the part of the vendor to engage any forwarding agent, nor can a person engaged for the purpose of clearing and forwarding operations, insist on procuring orders for the principal in the absence of any stipulation to that effect. 5.24 The ratio of the said judgment is that use of expression like directly or indirectly , and in any manner in the definition of clearing and forwarding agent cannot be construed an activity unconnected with clearing and forwarding operations. Applying the said principle, to the facts of the case, it was concluded that mere procuring of booking orders for the principal by an agent on payment of commission basis would not amount to provide services as clearing and forwarding agent within the meaning of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buting centres. For the service so rendered, the assessee was entitled for commission based on agreed percentage of sales figures and also for reimbursement of recurring expenses. We find that facts involved in the said case are entirely different and hence the observation of the Hon ble High Court in the context of the said case cannot be made applicable to the fact of the present case. Also, we do not feel the necessity of discussing various judgments cited by both sides for the reasons that the facts and circumstances involved in those cases are totally different and have scant relation to the services rendered by the Appellant in the present case. In our view, the facts of the present case, are closely comparable only with the facts of the Coal Handler s case (supra) where this Tribunal has categorically observed that the services rendered for movement of coal from collieries to its place of consumption would come within the definition of clearing and forwarding agent. We also do not find substance in the argument of the ld. Advocate for the Appellant that to fall within the definition and scope of clearing forwarding agent, it is necessary for a person to undertake all the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view the same are chargeable to Service Tax. 5.28 The next issue needs to be addressed is, whether the demand notice dated 19-10-2004 issued for the period from 1-9-1999 to 31-3-2004, is barred by limitation. It is the claim of the Appellant that under a bona fide belief and being guided by the Notification issued by Board Mumbai Commissionerate Trade Notice in the year 1997 that no Service Tax would be payable on the services rendered by them to Electricity Boards, cement companies, etc., accordingly, neither did they take registration nor paid Service Tax under the category of clearing and forwarding agent w.e.f. 1-9-1999 to 31-3-2004. The contention of the Revenue, on the other hand, is that the Appellant had not disclosed and/or suppressed the material documents, specially the contracts between them and power houses wilfully to avoid payment of Service Tax on the services of clearing forwarding agent rendered by them. Further, it is submitted that the list of services mentioned in the Board s Circular No. B43/7/1997-TRU, dated 11-7-1997 were the examples of services rendered by a clearing forwarding agent, and were not exclusive of other action and job which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed or Service Tax has not been paid or has been short paid etc., the period for recovery was prescribed as five years. Other than the above cases, the period of recovery was specified as one year. The changes brought into the said provision, after amendment, has been significant in the sense that for invoking five years period, the act of omission or failure, have been replaced with acts like fraud or collusion or wilful misstatement or suppression of facts or contravention of any of the provisions or of the rules made thereunder, with intent to evade payment of Service Tax. In other words, the recovery provision under Service Tax has been aligned with that of Central Excise Act. Hence, the principles of law laid down on the said subject, under central excise laws, would be relevant for the present purpose. 5.31 The Hon ble Supreme Court in the case of Collector of Central Excise v. HMM Ltd. - 1995 (76) E.L.T., 497 (S.C.) observed that mere non-declaration of waste generated, in the classification list, would not result into an inference, in a routine manner that it was due to mis statement or suppression etc.. The department is required to disclose the facts in the Show Caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evade payment of Service Tax right from the very beginning on the taxable service under the category of C F Agents rendered by them to their principals by way of wilful misstatement, by way of omission and failure, by way of suppression and non-disclosure of material facts and contraventions of the provisions of Chapter V of the Finance Act, 1994 and Service Tax Rules made thereunder. We find that these allegations were confirmed by the ld. Commissioner verbatim without recording any reasons in the impugned Order. 5.33 The principle for invoking extended period of limitation as prescribed under Section 11A(1) of the Central Excise Act, 1944 laid down by the Hon ble Supreme Court in Chemphar Drug s case (supra) extensively referred in almost all cases involving the issue extended period of limitation, reads as under : 8 .In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation is attracted and the circumstance for invoking extended period had observed as : 12. We have heard both sides, Mr. R.P. Bhatt, learned senior counsel, appearing on behalf of the appellant, and Mr. Mukul Gupta, learned senior counsel appearing on behalf of the Revenue. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or willful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. 5.36 Further elucidating the meaning of wilful , their Lordshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no specific evidence nor any reasoning in support of the conclusion of wilful suppression of facts with intent to evade payment of Service Tax has been recorded in the impugned Order by the ld. Commissioner. However, in the Show Cause Notice, analyzing the statement of one Shri Kalyan Banerjee, General Manager of the Appellant, it has been alleged that right steps were not taken by him to pay the Service Tax on the services rendered by the principals, which clearly indicates negligence on the part of Shri Banaerjee to comply with the law. We do not find merit in the said allegation of negligence in payment of Service Tax, could result in wilful misstatement or suppression of facts, thus, warranting invitation of extended period of limitation. On the other hand, we find force in the argument of ld. Advocate for the Appellant for harbouring a bona fide belief for non-payment of Service Tax on the services rendered by them to their clients. It is contended that the principal reason for such a belief has been due to the Notification of CBEC, dated 11-7-1997 and subsequent Mumbai Commissionerate Trade Notice, which have been accepted by the judiciary, even though in the context of othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute between the Department and the Appellant. The show cause notice was issued for recovery of the said Service Tax by the Nagpur Commissionerate and the matter is sub judice before the CESTAT Mumbai. The ld. Commissioner has also rejected the contention of the Appellant on the ground that necessary evidences were not produced before him by the Appellant. The Appellant had enclosed evidences in support of their contention in the Appeal filed before this Tribunal. Consequently, this issue also needs re-examination by the ld. Commissioner in the light of the evidences produced. Consequently, we set aside the impugned Order and remit the case to the ld. Commissioner, Service Tax, Kolkata for recalculation of the demand, if any, applying the normal period of limitation prescribed under Section 73(1) of the Finance Act, 1994, as was in force at the material time. Also, while calculating the demand, the ld. Commissioner would take into consideration the evidences produced by the Appellant and record a specific finding on the aspect of includability or otherwise of the value of taxable service received against Contracts, with TNSEB MSEB, in the total demand. Penalty and/or interest ..... 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