TMI Blog2017 (3) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... on the information/documents furnished by the appellant in 2005, the show cause proceedings were initiated by the Department on 12.03.2009, seeking confirmation of service tax demand under 'Franchise Service' for the period October' 2003 to March' 2007, we are of the considered view that the proceedings are barred by limitation of time - the appeal should succeed on the ground of limitation. Whether service tax amounting to ₹ 1,60,68,000/- under 'Business Auxiliary Service' and ₹ 46,08,759/- on 'Intellectual Property Right Service' under reverse charge mechanism are required to be demanded along with interest? - Held that: - It is an admitted fact on record that the amount of ₹ 7,38,61,083/- and ₹ 23,24,00,000/-, reflected in the books of accounts of appellant as outstanding as on 10.05.2008, were towards services received from abroad from the associated companies. Since on the date of amendment of Section 67 ibid and Rule 6 ibid, such amounts were reflected under outstanding receipts, the appellant is liable to pay service tax on such amount under reverse charge mechanism as per Section 66A ibid - service tax amounting to ₹ 46,08,759/- and ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est under the taxable category of 'Franchise Service' by invoking the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994. Besides, penalties were imposed on the appellant under Section 77 and 78 ibid. Further, the amount of ₹ 1,60,68,000/- and ₹ 46,08,759/- already deposited by the appellant were appropriated against service tax demand under 'Business Auxiliary Service'. For delayed payment of the said amount, the impugned order has confirmed the interest liability of ₹ 6,57,475/- and ₹ 1,84,116/- respectively under Section 75 ibid and also imposed penalty under Section 76 ibid. Filling aggrieved with the impugned order dated 31.01.2011, the appellant has filed this appeal before the Tribunal. 2.1 The ld. Advocate appearing for the appellant submitted that with regard to 'Franchise Service', the show cause proceedings are barred by limitation of time inasmuch as the Department had complete knowledge of the business activities of the appellant way back in 2005, when pursuant to the summons issued by the DGCEI, the appellant had furnished the detailed information on 07.11.2005. Thus, he submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rathi Steel Power Ltd.-2015 (321) ELT 200 (All.) and of Hon'ble Gujarat High Court, in the case of CCE, Surat -Vs.- Neminath Fabrics Pvt. Ltd.- 2010 (256) ELT 369 (Guj.). 3.2 The ld. A.R. further submitted that since the appellant had deposited the amount of service tax attributable to the taxable services namely, Intellectual Property Services and Business Auxiliary Services voluntarily, without challenging the audit report, maintainability of such liability cannot be questioned at the appellate stage and therefore, interest liabilities confirmed against the appellant for delayed payment of the admitted Service Tax liability is in conformity with the statutory provisions. 4. Heard the ld. counsel for both sides and examined the case records. 5. We find that the DGCEI had issued the summon dated 28.10.2005, calling upon the appellant to submit the documents/ records, which were submitted by the appellant vide its letter dated 07.11.2005. The documents submitted by the appellant pursuant to the summon, included inter alia, the copies of invoices issued by it for subscription fee received from the distributor, copies of receipts issued to the distributors on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invoked and the demand to be confined to the normal period of one year. 8. In context with issuance of show cause notice, where there is no involvement of suppression on the part of the assessee, the Hon ble Supreme Court in the case of Pragathi Concrete Products Ltd. (supra) have held that extended period of limitation not to be invoked where the show cause notice was issued in 2000 for the period from 1995-1999 as no case of suppression could be made out when the Department had conducted several audits of the Appellant during the period prior to issue of show cause notice. Further, in the case of Blue Star Ltd.(supra), it has been held by the Hon ble Supreme Court that no case of suppression could be made out where all the relevant facts were within the knowledge of the Department and consequently, the extended period of limitation could not be invoked. In the case of Shah Alloys Ltd. (supra), the SLP filed by Revenue was dismissed, holding that the extended period of limitation cannot be invoked, when it is established that the Department had knowledge of the facts. In the case of Monsanto Manufactures Pvt. Ltd. (supra), the Hon ble Supreme Court held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings initiated by the Department, the desired information/particulars were furnished. In such circumstances, it has been held by the judicial forums that once it is established that pre-conditions of the proviso to Section 73(1) ibid/Section 11A ibid (i.e. fraud, suppression, collusion, wilful misstatement and contravention of any provisions with an intent to evade payment of tax), stand satisfied, then it becomes necessary to determine the date from which the extended period should be computed; and in such eventuality, the extended period of limitation should be computed from the date when the evasion of tax (fraud, suppression, collusion, wilful misstatement or contravention of provisions) came to the knowledge of the Department. 10. On a collective reading of the decisions cited by both the counsels, it is clear that the consistent position of law with regard to applicability of the proviso to Section 73(1)/Section 11A ibid has been that suppression cannot be established where material facts were within the knowledge of the Revenue . Accordingly, where there is no suppression, the pre-condition for applicability of proviso to Section 73(1) cannot be said to be met and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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