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2016 (4) TMI 548 - CALCUTTA HIGH COURT

2016 (4) TMI 548 - CALCUTTA HIGH COURT - 2016 (42) S.T.R. 634 (Cal.) - Maintainability of Writ petition - Show cause notice issued without jurisdiction - Held that:- it is trite law that an authority cannot confer on itself jurisdiction to do a particular thing by wrongly assuming the existence of a certain set of facts, existence whereof is a sine qua non for exercise of jurisdiction by such authority. An authority cannot assume jurisdiction to do a particular thing by erroneously deciding a po .....

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d in invoking extended period of limitation for the purpose of issuing impugned show cause notice - Held that:- a mere mechanical reproduction of the language of the proviso to Section 73(1) of the Finance Act, 1994 does not per se justify invocation of the extended period of limitation. A mere ipse dixit that the noticee wilfully suppressed the material facts with intent to evade payment of service tax is not sufficient. The notice must contain particulars of facts and circumstance in support o .....

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the nature and scope of its business. Specimen copies of contracts entered into by the petitioner when its clients were also made available to the Department. So, there was full and sufficient disclosure of the nature of petitionerís business to the Department and it cannot be said that the Petitioner suppressed material facts to keep the Department in the dark with an intent to evade payment of service tax. Also it is stated in the impugned show cause notice itself that the same has been issued .....

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o time. Once the information is supplied pursuant to the directions of the revenue authority and information so supplied has not been questioned, a belated demand has to be held to be barred by limitation. Therefore, the impugned show cause notice is hopelessly barred by limitation. There was absolutely no ground or justification for issuing such notice by invoking the extended period of limitation. None of the preconditions necessary for taking recourse to the extended period of limitation exis .....

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w cause notice dated 7th September, 2009 covering the period 10th September, 2004 to 15th June, 2005 - Held that:- there cannot be double assessment for the period, overlapped to an appreciable extent. This is not permissible in law as held by this court in the case of Avery India Ltd. vs. Union of India [2010 (3) TMI 778 - CALCUTTA HIGH COURT] following the decision of the Honíble Supreme Court in the case of Dankan Industries Ltd. vs. Commissioner of Central Excise, New Delhi [2006 (8) TMI 185 .....

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f mind and, thereby, abdicated his powers and duty, which is not permissible in law. Service contracts simpliciter and not composite works contracts come within the service tax net under the provisions of the Finance Act. The petitioner is involved in performance of composite works contracts and vivisection of such contracts to segregate the service element and impose service tax on the same is not permissible. - Decided in favour of petitioner - WP 912 of 2013 - Dated:- 7-4-2016 - Arijit Banerj .....

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w Cause-cum-Demand Notice, both of which according to the petitioner, are illegal and nonest in the eye of law. The Petitioner s case:- (2) The petitioner company was previously known as Simplex Concrete Piles (India) Ltd., with effect from 8 November, 2005, the petitioners name was changed to M/s. Simplex Infrastructure Ltd. (3) On 28th October, 2004, the petitioner got registered under Construction Service with the Department for payment of service tax at Calcutta after construction service wa .....

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eer service was made taxable with effect from 7th July, 1997 for services provided in one or more disciplines of engineering. Architect service tax was made applicable with effect from 16th October, 1998. Technical testing and analysis services was made taxable with effect from 1 July, 2003. (5) The respondent Department instituted inquiry against the petitioner company regarding applicability of service tax for consulting engineering service by letter dated 11th June, 1998. The said letter was .....

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. (7) After about six years, the respondent again instituted an enquiry by its letter dated 15th April, 2004 regarding service tax payable by the petitioner for consulting engineering service and the architect service rendered by the petitioner. By its letter dated 19th May, 2004, the petitioner denied its liability for payment of service tax on account of consulting engineers services. In the said letter, the petitioner stated that it rendered no consultancy or technical assistance service with .....

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petitioner s business is to execute civil construction jobs for which it has obtained registration under construction services. (10) Thereafter, the respondent issued the Show Cause-cum-Demand Notice dated 21st April, 2006 demanding service tax of ₹ 65.25 crores (approximately) for the period from 1st October, 2000 to 31st March, 2005. In the said notice there was no reference to the earlier notices sent by the Department. (11) The petitioner filed its reply dated 24th May, 2006 to the sa .....

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, there was silence on the part of the department for more than three years. (13) Another Show Cause-cum-Demand Notice dated 7th September, 2009 was issued by the respondent for the period 10th September, 2004 to 15th June, 2005 claiming a sum of ₹ 4.51 crores (approx.) on account of service tax. This Show Cause-cum-Demand Notice culminated in an order dated 15th February, 2012 passed by the respondent whereby the petitioner was directed to pay the sum of ₹ 1,07,39,212/- which includ .....

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er wrote a letter dated 26th August, 2013 contending that no hearing could be held more than seven years after issuance of a show cause notice and in the records of the petitioner no such show cause notice was found to be pending. Further, under the law, the assesse is required to maintain records for five years only. (15) The petitioner contends that the Show Cause-cum-Demand Notice dated 21st April 2006 was issued on the grounds of suppression under the proviso to Section 73 (1) of the Finance .....

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to 10th September, 2004, it will amount to giving retrospective effect to the provisions which is not permissible under the law. In this connection, reliance was placed on a Supreme Court decision in the case of Mithilesh Kumari-vs.-Prem Behari Khare reported in 1989 (40) ELT 257. In that case the Hon ble Supreme Court observed that the presumption against retrospective operation of a statute is strong in cases in which the statute, if operated retrospectively, would prejudicially affect vested .....

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. Double assessment for the same period is not permissible under the law. In this connection, the petitioner relied on a decision of this court in the case of Avery India Ltd.-vs.-Union of India reported in 2011 (268) ELT 64. In that case, it was observed that there could not be two assessments for the same period. Two show cause notices could not, therefore, have been issued in relation to the same period. (17) The entire demand is raised by invoking the extended period of limitation under the .....

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registered under construction service which was made taxable with effect from 10th September, 2004. This was never objected to by the Department. The petitioner has never suppressed any facts from the department and the impugned show cause notice itself states that it has been issued on the basis of records submitted by the petitioner. The petitioner always cooperated with the Department fully. In this connection reliance was placed on a decision of the Supreme Court in the case of Uniworth Text .....

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on of this court in the case of Infinity Infotech Parks Ltd.-vs.-Union of India reported in 2014 (36) STR 37, wherein it was held that mere failure to disclose a transaction and pay tax thereon or a mere misstatement or mere contravention of the Central Excise Act or the Finance Act, 1994, is not sufficient for invocation of the extended period of limitation. There has to be a positive, conscious, and deliberate action intended to evade tax, for example, a deliberate misstatement or suppression .....

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corporate was not included. Body corporates were included by amending the said provision with effect from 1st May, 2006. Hence prior to 1st May, 2006 a limited company which is a body corporate was not liable to pay service tax under the category consulting engineering service. The petitioner is admittedly a body corporate and, therefore, it will not be covered under consulting engineering service for the material period. In this connection reliance was placed on a decision of a Division Bench .....

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he answer was given as NIL . The same person, who affirmed the affidavit-inopposition in the instant proceeding on behalf of the department, had issued the reply to the petitioner s application under the RTI Act. The department has offered no explanation as to why hearing notice has been sent after a gap of seven years. It is evident that the respondents have maliciously issued the said hearing notice in respect of the impugned show cause notice which does not exist in the departmental records f .....

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nion Ltd. reported in 2007 (11) SCC 363. In that case, at paragraphs 18 and 19 of the judgment the Hon ble Supreme Court observed that if no period of limitation has been prescribed, a statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. It was observed that the revisional jurisdiction under Section 21 of the Punjab Gen .....

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ble to be quashed. In this connection, reliance was placed on a decision of the Bombay High Court in the case of Hindustan Lever Ltd.-vs.-Union of India reported in 2011 (24) STR 97, wherein at paragraph 15 of the judgment it has been observed that it is well settled that adjudicatory proceedings have to be culminated within a reasonable time and if the same is not done, they stand vitiated on the said ground. The weight of the judicial pronouncements lean in favour of quashing the proceedings, .....

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tment could commence adjudication proceedings even after ten years, fifteen years or twenty years after the original show cause notice, which cannot be permitted. In the case of Universal Generics Pvt. Ltd.-vs.-Union of India reported in 1993 (68) ELT 27, a Division Bench of the Bombay High Court allowed the petition for quashing the show cause notice as the department had no explanation as to why the adjudication proceedings were not completed for ten years. In the case of Biswanath & Co.-v .....

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their annual income shown in the balance sheet, if issued may not sustain. Thus, the department was also conscious that the petitioner was not liable to pay service tax under consulting engineering service for the period covered by the impugned show cause notice and the department issued such notice under the pressure and direction from CERA. (23) The impugned show cause notice was purportedly issued on scrutiny of annual accounts (profit and loss account) and other relevant records , without gi .....

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on of the Bombay High Court in the case of Kellogg India Pvt. Ltd.-vs.-Union of India reported in 2007 (8) STR 84, wherein at paragraph 51 of the judgment it was observed that the adjudicating authority was in error in not directing the respondents to supply copies of the testing reports to the petitioners. A document to be relevant may support either the Revenue or the petitioner. No adjudicating authority can, therefore, refuse production of such a document simply because that document which i .....

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ause notice. In the draft show cause notice dated 12th April, 2006, the department itself admitted that services provided by the petitioner do not fall under the category of consulting engineering service and without documentary support, such a show cause notice is not sustainable. In the case of CCE-vs.-Mohan Bakers Pvt. Ltd. reported in 2009 (241) ELT A23, this court dismissed the appeal filed by the department where the show cause notice was issued after two years from the date of inspection. .....

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ring on behalf of the Department Mr. Saraf, Ld. Counsel submitted that the petitioners are not entitled to approach this court merely against the issuance of a notice of personal hearing. The assessing officer is empowered to issue such a notice and the same is for the purpose of affording a fair opportunity to the petitioner to present its case. Even the show cause notice issued to the assessee is valid. In this connection he relied on a decision of this court in the case of Surya Alloy Industr .....

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fence to have been committed. Ordinarily High Court should not embark to decide the factual disputes but relegate the party to submit the reply before the authority concerned who is obliged to decide the same. The aforesaid rule is, however, not free from exception. The exception, carved out in the case of Indian Cardboard Industries Limited (supra), in my opinion, still holds the field. The aforesaid exception can be aptly quoted hereunder: On the basis of the decisions cited it appears that th .....

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ibunal; (5) When there is no material justifying the issuance of the show cause notice. In the ordinary course, the High Court will not exercise its writ jurisdiction to interfere with a show cause notice issued by the revenue Department excepting in the cases mentioned above. None of the exceptions apply to the facts of the instant case. It cannot be said that the notice does not disclose the alleged offence or is without jurisdiction or suffers from any incurable infirmity or is contrary to an .....

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at the writ court should not interfere when two reasonable classifications are possible and the Revenue Authorities have adopted the one that is favourable to them. Interference is called for only when the classification is perverse. He then referred to the decision of the Hon ble Supreme Court in the case of ACST-vs.-P. Kesavan & Co. reported in 1996 (81) ELT 7 in support of his submission that in classification matters, the Revenue Authorities are in better position to seek and appreciate .....

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-vs.-Union of India reported in 2011 (271) ELT 46 in this regard. (27) It was then submitted that the impugned show cause notice has been validly issued under the proviso to Section 73(1) of the Finance Act, 1994 as substituted by Finance (No. 2) Act, 2004. The provision having been substituted completely prior to the issuance of the show cause notice dated 21st April, 2006, it was incumbent upon the assessing officer to issue notice in accordance with the law prevailing on the date of its issua .....

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ued under the amended provision and not under the old provision. (28) Mr. Saraf then argued that even assuming but not admitting that the interpretation offered by the petitioners is correct and that the show cause notice should have been issued under Section 73(1) of the Finance Act, 1994 as it stood prior to the amendment, it would be of no consequences, as there was no material change in law. Under Section 73(1)(a) as it stood prior to the amendment, the assessing officer could issue a show c .....

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ession of facts can be easily read into the above provision which makes failure on the part of the assessee to truly disclose all material facts, a ground for invoking the extending the period of limitation. (29) The mere mentioning of a wrong provision of law would not vitiate the show cause notice as the assessing officer was otherwise competent to issue the same. This principle has been laid down by the Hon ble Supreme Court in the case of JK Steel-vs.-Union of India reported in 1978 (2) ELT .....

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liem Industries Co. (Tribunal, Delhi) to state that as per the said decision the service component of a works contract cannot be vivisected and hence its activities are not amenable to service tax under Section 65(105)(g). The petitioner then referred to the circular dated 18th December, 2002 and stated that such services have been regarded as consulting engineering services under the said circular. The said reply to the petitioner is in complete contradiction to its previous replies wherein it .....

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d in 2003 (155) ELT 457 (Delhi) and in the case of Jyoti Ltd. reported in 2008 (9) STR 373 (Ahmedabad) had held in favour of the assessee. In both the cases the Revenue Department filed special leave petitions. The Hon ble Apex Court dismissed the SLP in the case of Daliem Industrial Co. without making any observation on facts or law. In the case of Jyoti Ltd., the Hon ble Supreme Court was pleased to admit the SLP and the matter is pending before the Hon ble Supreme Court. Simpliciter dismissal .....

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personal hearing dated 13th August, 2013 cannot be held to have been vitiated due to a delay of seven years. The Finance Act, 1994, at the time of issuance of the said show cause notice as well as the said hearing notice did not provide any period within which the adjudication proceedings should be completed. Hence, there is no bar on the respondent authorities to continue the adjudication proceedings. In the case of CCE, New Delhi-vs.-Bhagsons Paints Indus. (India) reported in 2003 (158) ELT 12 .....

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encies reported in (2007) 292 ITR 444, the Hon ble Supreme Court held that the courts cannot read words into a statute. In the instant case, the Finance Act, 1994, did not provide any specific time frame for completing adjudication nor did it say that the same was to be completed within a reasonable period. Hence, following the decision of the Hon ble Supreme Court in Bhagsons Paints (Supra) the adjudication proceedings can be validly continued. (33) The time frame of one year within which adjud .....

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by issuing a demand notice. The instant case on the other hand relates to continuation of adjudication proceedings for which a show cause notice had already been issued within the permissible time frame whereas in the aforesaid cases cited by the petitioner proceedings were sought to be initiated after inordinate delay. (34) Ld. Counsel then submitted that the show cause notice dated 21st April, 2006 was issued by the respondent authorities within seven months of the letter dated 28th September, .....

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ce dated 21st April, 2006. Thereafter, enquiries were made in 2004 and 2005 and the impugned show cause notice was issued within seven months from the last enquiry made in the matter. (35) The next submission of Ld. Counsel was that the assessing officer having based his findings on the documents provided by the assessee himself and not any outside document, the question of violation of principles of natural justice for not providing copies of documents relied upon, does not arise. Prior to fili .....

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ch of those cases, the assessee had levied specific allegations against the revenue authorities, such as clandestine removal of relied on test results of the products. These reports and evidence were received from outside source and not known to the assessee and as such the courts in seisin of such matters set aside the notice or the order passed in such proceedings but at the same time gave liberty to the Department to re-initiate the proceedings by providing copies of the relied upon documents .....

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Further, the time frame common to the said two notices is only for the period 19th December, 2004 to 31st March, 2005 which forms only a small part of the period of show cause notice dated 21st April, 2006. In the event it is held that the show causes do overlap, the period of show cause notice dated 21st April 2006 will be reduced by the period by which it overlaps with the show cause notice dated 9th September, 2009 but it shall not render the show cause notice dated 21st April 2006 a nullity .....

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e reply dated 19th May, 2004, the petitioner stated that consulting engineering may include a company. In the case of MN Dastur & Co. Ltd.-vs.-UOI reported in 2002 (140) ELT 341, this court held that no distinction can be made between different categories of service providers, be they individuals, partnership firms or incorporated companies and all such service providers come within the purview of service tax. This decision was upheld by a decision of a Division Bench of this court reported .....

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te knowing the same, the petitioner filed the RTI application dated 27th August, 2013 with a query as to whether or not there are any pending proceedings which are of the year 2006 or the period prior thereto. This shows the mala fide intention of the petitioner in filing the RTI application. Further, if incorrect information has been provided to an applicant, he would have to proceed against the authorities under the RTI Act, 2005. An incorrect response under the RTI Act cannot affect the proce .....

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and ought to be quashed. On the other hand, it has been contended on behalf of the Department that the instant Writ Petition is not maintainable. Since the point of maintainability is a preliminary point, the same is taken up for consideration first. (41) Appearing for the Department, Mr. Saraf has argued that ordinarily a show-cause notice or a notice of personal hearing cannot be interfered with in the exercise of the Writ Jurisdiction. It is only when the show cause notice is issued without .....

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on the basis of admitted facts does not disclose the offence alleged to have been committed; when the show cause notice is without jurisdiction; when the notice suffers from an incurable infirmity; when the show cause notice is contrary to judicial decisions or decisions of the Tribunal; or, where there is no material justifying the issuance of the show cause notice. Mr. Saraf submitted that none of these circumstances exist in the facts of the present case and as such the Writ Petition should n .....

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e authority issuing the show cause notice. An authority cannot clothe itself with jurisdiction by erroneously deciding a point of fact or law. (43) Having considered the submissions of the learned Counsel on the point of maintainability of the Writ Petition, I am of the view that if it be held finally that the extended period of limitation was wrongly invoked by the authority in issuing the impugned show cause notice, the logical conclusion would be that the show cause notice was issued without .....

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he instant case, since the petitioner has challenged the jurisdiction of the authority to issue the impugned show cause notice, in my view the Writ Petition cannot be rejected at the threshold. Whether or not the petitioner will ultimately succeed on merits is a different question altogether. However, it cannot be said that the Writ Petition is not maintainability at all and should not be entertained for adjudication. (44) There can be no dispute that the question of limitation is a question of .....

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or not was a question open to examination by the High Court in an application under Article 226 of the Constitution of India. (46) In the aforesaid case, the Supreme Court held that where the Income Tax Officer had assumed jurisdiction by deciding a jurisdictional fact erroneously, the assessee would be entitled to a writ of certiorari as prayed for, since it was incomprehensible to think a quasi-judicial authority could erroneously decide a jurisdictional fact and impose a levy. (47) In Shrish .....

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ng without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, would issue appropriate orders or direction to prevent the same. (49) In view of the above, the preliminary issue of maintainability of the Writ Petition is decided in favour of the Petitioner. I hold that the writ petition cannot be dismissed in limine as unmaintainable. (50) On merits, the first point that has been urged on behalf of the Petitioner is that the i .....

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een levied or paid or has been shortlevied or short-paid or erroneously refunded, the (Central Excise Officer) may, within (eighteen months) from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:- Provided that where any service tax has not b .....

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been substituted. (51) Sub-Section 6 of Section 73 defines relevant date as follows:- (6) For the purposes of this section, relevant date means,- (i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid- (a) where under the rules made under this Chapter, a periodical return, showing particulars of service ta paid during the period to which the said return relates, is to be filed by an assesse, the date on which such re .....

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vice tax, has erroneously been refunded, the date of such refund. (52) Thus, where any service tax has not been paid, the Department is empowered to service a show cause notice on the assessee requiring him to show cause why he should not pay the amounts specified in the notice. Such notice has to be issued within 18 (Eighteen) months from the date when such service tax was payable. Any notice issued beyond such period would be barred by limitation. However, the period of limitation stands exten .....

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g to the Department, the service tax was payable by the Petitioner. However, the Department invoked the extended period of limitation. In the impugned notice it is stated inter-alia as follows:- It would be evident from the foregoing that had the investigation not been conducted, the fact of providing such service by the said noticee would have remained unearthed. Hence, the extended period of 5 years is invocable for issuing show cause notice to the said noticee as per proviso to Section 73(1) .....

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ustify invocation of the extended period of limitation. A mere ipse dixit that the noticee wilfully suppressed the material facts with intent to evade payment of service tax is not sufficient. The notice must contain particulars of facts and circumstance in support of such allegation. Even if such particulars are not included in the notice, the Department should be in a position to justify and/or substantiate its allegation of suppression of material facts on the part of the noticee. (56) Coming .....

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Petitioner was basically a civil engineering construction contractor. The Petitioner submitted to the Department a copy of its balance sheet for the year 1996-97 as also copies of some specimen contracts entered into by and between the Petitioner and its clients. Upon receipt of such reply from the Petitioner, the Department went on a silent mode and there was no communication from them for 6 (Six) years. Thereafter by a notice dated 15th April, 2004 the Department again instituted an enquiry w .....

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ated that it was doing construction work and had obtained registration under construction service which was included within the ambit of service tax with effect from 10th September, 2004. Then again, there was a long gap and there was no communication from the Department. More than one and half years thereafter the Department issued the show cause notice which is impugned in the present Writ Petition. (57) From the aforesaid it appears that the Petitioner was diligent in responding to all the no .....

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e tax. (58) It is also pertinent to note that it is stated in the impugned show cause notice itself that the same has been issued on the basis of the records submitted by the Petitioner. Hence, there appears to be no basis in the Department s contention that the Petitioner suppressed material facts with an intent to evade payment of service tax. Suppression of fact in the context of this case can only mean nondisclosure of correct information deliberately to evade payment of service tax. There m .....

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rately conceals material facts with a dishonest motive of eroding some liability or making some unlawful gain, he cannot be said to be guilty of suppression of facts. (59) As would appear from the show cause notice under challenge, there is no allegation of any conscious act on the part of the Petitioner that constitutes fraud or collusion or wilful misstatement or suppression of facts or contravention of any of the provisions of the Finance Act, 1994 or any Rule made therein with intent to evad .....

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n that was called for by the Department from time to time. Once the information is supplied pursuant to the directions of the revenue authority and information so supplied has not been questioned, a belated demand has to be held to be barred by limitation. This proposition finds support from the judgment of the Supreme Court in case of Commissioner of Central Excise, Chandigarh -Vs- Punjab Laminates Pvt. Ltd. reported in 2006(202)ELT 578. (61) In this connection one may also refer to the judgmen .....

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ntral Excise, Hyderabad -Vs- Chemphar Drugs and Liniments, Hyderabad reported in (1989) 2 SCC 127, the Supreme Court held:- In order to make the demand for duty sustainable beyond a period of 6 months and up to a period of 5 years in view of the proviso to sub-section (1) of 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 misstatement or sup .....

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l misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. (63) In Anand Nishikawa Co. Ltd -Vs- Commissioner of Central Excise, Meerut, reported in (2005)7 SCC 749 = 2005 (188) E.L.T. 149 (S.C.), the Supreme Court held: …we find that suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known .....

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entral excise, Hyderabad -Vs- Chemphar Drugs and Liniments, Hyderabad (Supra), Cosmic Dye Chemical -Vs- Collector of Central Excise, Bombay (Supra), Anand Nishikawa Co. Ltd. -Vs- Commissioner of Central Excise, Meerut (Supra) and held that it was settled that mere failure to declare would not amount to wilful suppression. There must be some conscious, deliberate act with a view to evade tax. (65) The proposition which emerges from the judgments of the Supreme Court referred to above, is that mer .....

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am of the view that the Commissioner proceeded on the basis that there had been contravention, as a result whereof, service tax that was payable had not been paid. The Commissioner of service tax did not address the issue which he was required to do, for issuing a show cause notice by invoking the extended period of limitation. (68) In my considered view and in view of the law as discussed above, the impugned show cause notice is hopelessly barred by limitation. There was absolutely no ground o .....

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if I were to decide the issue of limitation in favour of the department, there are other grounds on which I would have been compelled to quash the impugned show cause notice and I think I should briefly indicate those grounds. (71) The impugned show cause notice dated 21st April, 2006 pertains to the period 1st October, 2000 to 31st September, 2009. Subsequently, the department issued another show cause notice dated 7th September, 2009 covering the period 10th September, 2004 to 15th June, 2005 .....

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cause notice dated 21st April, 2006 and the show cause notice dated 7th September, 2009 were issued, overlapped to an appreciable extent. This is not permissible in law as held by this court in the case of Avery India Ltd.-vs.-Union of India (2011) (268 ELT 64) following the decision of the Hon ble Supreme Court in the case of Dankan Industries Ltd.-vs.-Commissioner of Central Excise, New Delhi (2006) (201 ELT 517). Two show cause notices could not have been issued in relation to the same perio .....

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payment of service tax and education cess. When a demand is pre-determined, the same ceases to be in the realm of a show cause notice as held by the Hon ble Supreme Court in the case of Siemens Ltd.-vs.-State of Maharashtra reported in 2007 (207 ELT 168) wherein it was observed that although ordinarily a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same, inter alia, appears to have been issued without ju .....

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remain in the realm of a show cause notice. For this reason also I would be inclined to quash the impugned show cause notice. (73) It would appear from the documents on record as also the pleadings filed by the parties that the impugned show cause notice was issued by the Commissioner of service tax in view of the observations of and at the instance of the audit team of CERA. In this connection one may refer to a letter dated 12th April, 2006 written by the Assistant Commissioner, Service Tax D .....

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ed draft SCN was prepared on the basis of available records covering the period October, 2000 to March 2005 (April 2000 to September 2000 is time barred) and was forwarded for the Commissioners consideration please. (74) It is well-settled that a quasi-judicial authority must act independently and not at the dictates of some other authority. It is quite evident that the Commissioner issued the impugned show cause notice at the instance of CERA without any independent application of mind and, the .....

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g period of time. (76) As regards the decisions relied upon by Ld. Counsel for the department in support of his contention that the High Court cannot entertain a writ petition on classification, in my view, the same have no manner of application to the facts of the instant case. The issue involved in the present case is not the correctness or justifiability of classification but of sustainability of a show cause notice. (77) Although I have not entered into the merits of the department s claim o .....

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of the judgment the Hon ble Apex Court held as follows: 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65 (105) would refer only to service contracts simpliciter and not to composite works contracts. This is clean from the very language of Section 65 (105) which defines taxable service as any service provided . All the services referred to in the said sub-clauses are service contracts simpliciter without any other element .....

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tained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. 41. We are afraid that there are several errors in this paragraph. The High Court first correctly holds that in the case of composite works contracts, the service e .....

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