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M/s. Creative Travel Pvt. Ltd. Versus Commissioner of Central Excise & ST, New Delhi

2015 (10) TMI 1305 - CESTAT NEW DELHI

Best judgement assessment u/s 72 – Non submission of information hampered the determination of service tax liability and has not filed the return as well; thus invoking Section 72 – Held That:- Appellant filed the ST-3 returns regularly thus foundation of SCN that Appellant has not filed their return is incorrect.

Regarding letters issued seeking information from the appellant - Held that:- appellant has specifically asked the department to tell what information they require, but desp .....

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re thus not attracted – SCN is deficient and not maintainable – Decided in favour of the assessee. - Service Tax Appeal No. 707 of 2012 - Final Order No. A/ 53076/2015-ST - Dated:- 6-10-2015 - Mr Ashok Jindal, Member (Judicial) And Mr. R K Singh, Member (Technical) For the Appellants : Shri J K Mittal with Shri Rajveer Singh, Advocates For the Respondent : Shri Amreesh Jain, DR ORDER Per Ashok Jindal : The appellant is in appeal against the impugned order wherein the show cause notice dated .....

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notice, this show cause notice is issued. Before issuance of show cause notice, the appellant was asked to provide details/ documents/ information for the period April, 2009 to March 2010 through various letters dated 3.6.2010, 4.7.2010, 28.7.2010, 3.9.2010 and lastly on 1.10.2010. But the appellant did not provide any details to the department. Therefore, it was alleged in the show cause notice that the appellant has failed to furnish the requisite information and also not furnished the return .....

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t, whether the show cause notice was issued correctly or not. The adjudicating authority held that show cause notice is maintainable and the same has been confirmed by the learned Commissioner (Appeals). Aggrieved from the said order, the appellant is before us. 2. Shri J K Mittal, learned Counsel for the appellants appeared and submitted that in para 5 of the show cause notice it is alleged that the appellant failed to furnish the return under section 70 of the Act and again it is alleged in pa .....

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72 of the Act and why services tax should not be recovered under section 73 of the Act, which indicates that the show cause notice was issued on the parameters that appellant has not filed service tax return, the proceedings under section 72 and 73 were simultaneously initiated. He further submits that the show cause notice itself admitted that the appellant has replied the letters issued by the department and have not supplied the information. Whereas the letters clearly states that they have .....

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the adjudicating authority has admitted that appellant has requested to the department to depute audit team to prepare desire details . Whereas there is no such allegation in the show cause notice that which record is required to be maintained under Rule 5 of the Service Tax Rules, 1994 have not been prepared by the appellant. Despite the appellant request, the department did not depute any team to verify the records as required under Rule 5A of the Service Tax Rules, 1994. 3. He further submit .....

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in the show cause notice. However, the returns filed by the appellant were in order. It is settled law that the adjudicating authority cannot travel beyond the allegation made in the show cause notice. He submits that the appellant has periodically filed the service tax returns and the department has not alleged that required information in the return has not be given. Infact, the department has accepted the return filed by the appellant in the manner in which it has been filed for such several .....

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notice. The learned Commissioner (Appeals) has gone beyond the issue raised before him in the lis. Therefore, he has wrongly held that the show cause notice is maintainable. As both the authorities below have travelled beyond the scope of show cause notice which is not permissible in law as held by Hon ble Apex Court in the case of CC Mumbai vs. Toyo Engineering India Ltd. [2006 (201) ELT 513 (SC)]. He further submits that the provisions of Section 72 can be invoked in either of two situations .....

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a clear finding of the adjudicating authority that the appellant has filed return in time. Therefore, the show cause notice is not maintainable when the allegation of the department is failed. But, the adjudicating authority travelled beyond the allegation made in the show cause notice recording that party has failed to fulfill condition (b) inasmuch as the ST 3 were filed by them are incomplete. This was not the allegation in the show cause notice or in the letters issued by the Department. Th .....

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of violation of section 72(b) of the Act. Therefore, the impugned order is to be set aside. 4. He further submits that it was held by the authorities below that the department has not received such information /figures from the appellant which resulted in invocation of provisions of section 72 of the Act, but the letters issued by the department on various dates for sending information/ details were not issued under section 72 of the Act at all but same were issued under Section 14 of the Centr .....

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o assess tax in accordance with the law. Therefore, the adjudicating authority has drawn the wrong conclusion contrary to law and even if there would have been such allegation will not sustain in the show cause notice for invocation of section 72 of the Act for the said reason. 5. He further submits that in the show cause notice, provisions of section 72 and 73 are invoked simultaneously whereas in the show cause notice, it is alleged that provisions of section 73(1) of the Act can be invoked an .....

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he show cause notice for initiating proceedings under section 72 and 73 are bad in law and not maintainable. He further submits that in the show cause notice, the value of taxable service as well as service tax payable thereon has already been determined by specifying and stating therein whereas as per the provision of section72 of the Act, best judgment is made to arrive at the value of taxable service and determine sum payable by the assessee/Parties on such year-wise assessment, the value of .....

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in the show cause notice to invoke clause (b) of section 72 for failing to assess the tax in accordance with the law after filing the return therefore, the show cause notice is bad in the eyes of law and liable to be quashed. He also submits that show cause notice is apparently prepared by the AC whereas it has been signed and issued by the Joint Commissioner and the said infirmity was pointed out by them has not been dealt with by the both the authorities below. He further submits that there ar .....

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dated 8.4.2010 shall apply to the impugned show cause notice. He further submits that the show cause notice dated 8.4.2010 was relied upon for issuance of the impugned show cause notice. He further submits that as the appellant has failed to specify the information under various sections of Finance Act, 1994, therefore, show cause notice is maintainable. 7. He also submits that show cause notice is clearly brings out the violation of section 66A, 67, 68, 69, 70 and 72 of Finance Act, 1994 and i .....

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otice herein as under: 11. Now on perusal of the show cause notice, we find that in para 5 of the show cause notice, the case of the Revenue proceeded on the fact that appellant has failed to furnish the return under section 70 of the Finance Act, 1994. The non-submission of information by the appellant has resulted into hampering of determination of service tax liability. Therefore, provisions of section 72 of the Act were attracted, as the appellant has failed to produce records/ information a .....

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ssessed. On perusal of the show cause notice, nowhere it is mentioned that whatever information, the appellant has supplied are not sufficient and what are the deficiencies in these informations. 12. To invoke provisions are of section 72 of the Act, it is proper to incorporate the provisions of section 72 of the Act. 13. For better appreciation, the same are reproduced as under : Section 72 of the Act ibid read as Best judgment assessment means if any person, liable to pay Service Tax. (a) fail .....

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nt of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment. 14. As per the abovesaid provisions, the provisions are attracted in a case the assessee has failed to furnish the return under section 70 of the Act and if he has made the return fails to assess the tax in accordance with the provisions of this chapter or Rules made thereunder. 15. Therefore, section 72 ibid has two limbs: A. .....

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ot filed their return is incorrect. If the case of the Revenue is that appellant has not filed the return, the provision of section 72 are attracted. The said allegation against the appellant stand disapproved as the appellant has filed their return regularly. 16. Now, we analyse the clause (b) of section 72. If the appellant has filed the return, and fails to assess the tax in accordance with the provisions of this Chapter or rules made thereunder in the show cause notice, there is no allegatio .....

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