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M/s NGK Infrastructure Ltd. Versus Commissioner of Central Excise And Service Tax, Ghaziabad

2015 (7) TMI 592 - CESTAT NEW DELHI

Extended period of limitation - bonafide belief - Penalty u/s 77 & 78 - Site Formation, Clearance. Excavation, earth moving and demolishing service - Held that:- Payment was made by cheques dated 17.06.2006 and 21.06.2006 for the services rendered as per the work order dated 17.06.2006 and the bill in respect thereof was issued by the appellant on 18.08.2006. Thus, there is no doubt that the Show Cause Notice dated 05.05.2011 was issued within a period of five years, which is the extended period .....

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of Section 73 ibid makes it clear that the only requirement for Revenue to be able to invoke extended period of five years is to establish suppression, collusion or wilful mis-statement with intent to evade service tax and the date on which Revenue discovered or became aware is not a variable in this equation. - impugned order clearly notes that the said amount was not reflected in the ST-3 return which itself is sufficient to establish suppression of facts on the part of the appellant to evade .....

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nformation/ details from the service recipient, SICCL.

Mere perusal of the definition vis-a-vis the description of work (service) done by the appellant does not leave any scope to even entertain a reasonable doubt, leave alone reasonable belief, that the service rendered may not be covered under the said definition. Mere non-mention of the particular clause of the definition in the Show Cause Notice when the definition is so graphically clear could in no way jeopardise the appellant's .....

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ving and demolishing and such other similar activities referred to in sub-clause (97a) and (zzza) of clause 105 of Section 65 of the Act. provided by any person in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports or other ports. No elaborate discussion is needed to state that the service rendered by the appellant was not in the course of construction of roads, airport, railways, transport terminal, bridges, tunnels, dams, ports or other .....

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r the Respondent : Shri Amresh Jain, DR ORDER Per: R K Singh: Appeal has been filed against Order-in-Original NO.01/COMMR./ST/GZB/2013-14, dated 15.05.2013 in terms of which service tax demand of ₹ 66,35,778/- was confirmed along with interest in respect of amount of ₹ 6,08,49,653/- received vide cheque No.1956. dated 17.06.2006 (Rs.3,06,88,653/-) and Cheque No.1963, dated 21,06,2006 (Rs.3,01,61.000/-) for rendering 'Site Formation, Clearance. Excavation, earth moving and demolis .....

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ng of shrubs, grass and rubbish, etc. at Sahara City Homes, Amritsar. Payments for the said work order were made vide cheque No.1956, dated 17.06.2006 and cheque No.1963, dated 21.06.2006 as mentioned earlier, totalling to ₹ 6,08,49,653/-. The appellant also issued a bill No. Sahara/06-07/01 dated 18.08.2006 for an amount of ₹ 6,08,49,000/- and in the "particulars" column of the bill it is stated "being charges for agriculture land levelling, soil filling thereon and o .....

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e tax under "Site formation" service [defined under Section 65 (97a)] of the Act and imposed penalties as above clearly holding that there was suppression of facts to evade service tax and thereby the extended period was invocable. 3. The appellant essentially contended that (i) the demand is time barred as there was no wilful mis-statement or suppression of facts, (ii) the Show Cause Notice was not valid as it was not specified under which specific clause of Section 65 (97a) of the Ac .....

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in this case began in the year 2008. The appellant was also audited by jurisdictional commissionerate, which made enquiries and issued summons in the year 2009 and it (the appellant) had given copies of the balance sheet for the period 2005-06 to 2009-10 to the jurisdictional commissionerate. Thus, there was no wilful mis-statement/suppression of facts on its part. The Show Cause Notice was issued after more than one year of the commencement of the enquiry and on that count also demand is time .....

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6 (201) ELT 517 (SC)] and the judgement Kolkata High Court in the case of Avery India Ltd. Vs. Union of India [2011 (268) ELT 64 (Cal)] to advance the proposition that there could not be two assessments for the same period and so two Show Cause Notices could not have been issued in relation to the same period. It also cited a catena of judgements including the judgements of the Supreme Court in the cases of Uniworth Textiles Ltd. Vs. CCE, Raipur [2013 (288) ELT 161 (SC)] and CCE, Aurangabad Vs. .....

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reassessment. (vii)The work done by the appellant related to activities of agricultural land levelling, which was excluded from the taxable service under Section 65 (105) (zzza) read with Section 65 (97a) of the Act. (viii) It was under a bona fide belief that the service tax was not leviable, (ix) It is incorrect to say that Shri Jitender Kumar, officer of the appellant did not deny the work order dated 17.06.2006; he merely stated that he was unable to tell anything regarding the said work ord .....

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ques dated 17.06.2006 and 21.06.2006 totalling of ₹ 6,08,49,653/- are reflected against work order No.4 dated 17.06.2006. (ii) Ld. counsel for the appellant never claimed that the work was relating to agriculture; he stated that work was relating to agricultural land development; it is only subsequently that it claimed the exemption under Notification No.17/2005-ST, dated 07.05.2005. (iii) Not including the impugned amount in the ST-3 returns clearly amounts to suppression of facts. Even t .....

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se Notice dated 05.05.2011 was issued within a period of five years, which is the extended period available for issuing the same in case of wilful mis-statement/suppression of facts on the part of the appellant with intent to evade payment of service tax. One of the contentions regarding time bar raised by the appellant is that the enquiry began sometime in the year 2008 and therefore the Show Cause Notice was required to be issued within a period of one year of the commencement of the enquiry a .....

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were given in the context of the facts and circumstances of each case. The need to individually take up those cases and distinguish to show their inapplicability to the present case is however obviated by the judgement of the Supreme Court which in the case of Tejas Network India Ltd. Vs. Commissioner [2015 (316) ELT A157 (SO)], in effect, held that extended period is invokable when clandestine removal for evasion of duty is established and date on which Revenue became aware of it is not relevan .....

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d from the service recipient (SICCL). It is on record that Investigating Officer asked the appellant vide letter dated 02.02.2010 to submit the facts and figures, copies of work order, bank statement, etc., but the same were never supplied by the appellant and it was only then that the Investigating Officer called for the information/ details from the service recipient, SICCL. It further establishes suppression on the appellant's part. We have taken note of catena of judgements cited by the .....

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cavation and Demolition service is defined in Section 65 (97a) ibid as under:- "Site Formation and clearance, Excavation and Earthmoving and Demolition" includes, - (i) Drilling, boring and core extraction services for construction, geophysical, geological or similar purposes; or (ii) Soil stabilization; or (iii) Horizontal drilling for the passage of cables or drain pipes; or (iv) Land reclamation work; or (v) Contaminated top soil stripping work; or (vi) Demolition and wrecking of bu .....

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Mere non-mention of the particular clause of the definition in the Show Cause Notice when the definition is so graphically clear could in no way jeopardise the appellant's ability to defend itself and the defence submitted by the appellant is ample evidence thereof and therefore the same (i.e., such non-mention) is inconsequential. The only exclusions in the said definition in Section 65 (97a) ibid are "such services provided in relation to agriculture, irrigation, watershed development .....

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s only tried to obfuscate the issue by saying that the work was on agricultural land. As per Oxford dictionary, word "agriculture" means "science or practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food, wool and other products". It is evident that the service rendered by the appellant was in relation to none of these activities. In other words, the service rendered was not in relation to agriculture as clai .....

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ot; does not make it a belief, leave alone bona fide belief. Bona fide belief is a belief entertained by a reasonable person in an appropriate environment. As brought out earlier, there was no ambiguity or doubt about coverage of the service rendered by the appellant under the scope of Site Formation and Clearance, Excavation and Earthmoving and Demolition service. In these circumstances, we hold that the extended period as well as Section 78 of the Finance Act, 1994 are invokable in the present .....

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ate (Rs.) Amount (Rs.) 1. Levelling of soil including filling of gorges / nallah. etc. by hiring tractor and trolley including driver wages, fuel, etc. Hrs. 315518 175.00 55215650.00 2. Removing shrubs, grass and rubbish from the area complete in all respects Sqm 97128.00 58.00 5633424.00 TOTAL 60849074.00 Say Rs. 6,08,49,000.00 Rupees Six Crore Eight Lak Forty Nine Thousand Only Prepared Sd/-xxx (P.M. Pandey) Dy. Manager Sd/-xxx (Majeed Siddiqui) Manager Sd/-xxx (S.B. Pandey) Manager Sd/-xxx (S .....

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and cheque No.1963, dated 21.06.2006 for ₹ 3,06.88,653/- and ₹ 3,01,61,000/-respectively) against work order No.4 dated 17.06.2006. The RUD-4 is reproduced below:- (Amount in Rs.) Annexure-II S.No. Name of Party Address W.O. No. W.O. Date W.O. Amount Ch. No. Ch. Date Development amount paid Bill Date Bill Amount 1 M/s NKG Infrastructure Ltd. 803, Manjusha 57, Nehru Place, New Delhi 4 17.06.06 60849000.00 1956 1963 17.06.06 21.06.06 Total 30688653 30161000 60,849,653.00 18.08.06 60849 .....

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d 17.06.2006. In any case, the appellant issued Bill No.Sahara/06-07/01, dated 18,08.2006 (which is reproduced below) which clearly establishes that the service of "agricultural land levelling soil filling thereon and of gorges / nallah, removing of shrubs, grass and rubbish, etc. at village Manawala, Amritsar (area covered 24 acres approx.)" was rendered to SICCL. "Date: Aug 18. 2006 Bill No.: Sahara/06-07/01 To Sahara India Commercial Corpo. Ltd.Sahara India Bhawan, Kapoorthala, .....

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ice was rendered by the appellant and the payment therefor was received. 8. The appellant had stated that it was eligible for exemption under Notification No.17/2005-ST, dated 07.06.2005 that is applicable to the site formation and clearance, excavation and earthmoving and demolishing and such other similar activities referred to in sub-clause (97a) and (zzza) of clause 105 of Section 65 of the Act. provided by any person in the course of construction of roads, airports, railways, transport term .....

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