TMI Blog2017 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to the amount received by the assessees from NLC for the dispute period and have thereupon directly proceeded to calculate the service tax liability thereon on the basis of whole order - As it is practically not feasible to adhere to the normal procedure of issuing summons, collecting agreement copies and recording statements, considering the volume of work, show cause notices were issued to the contractors based on the data received from M/s. NLC indicating the service provided as the service for which they had registered themselves or the service as deduced from the data received from M/s. NLC. The entire process of issue of show cause notices was done in a very hasty and slipshod manner without giving any raison detre for demanding service tax on the various activities deduced by department to have been provided by the respondents/assessees - The show cause notices do not also indicate the list of the activities provided by the department, or justify all these activities fall within the ambit of taxable services for the purposes of the Finance Act, 1994 or indicate specifically the separate tax liabilities demanded on each such individual taxable service. Such short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matters to the adjudicating authority. Being aggrieved, the respondents/assessees filed appeals before the Hon ble High Court of Madras and vide judgment dated 30.4.2015 and other dates, the Hon ble High Court has remanded the matter to the Tribunal for consideration. 2. Brief facts of the case are that the land belonging to large number of people was acquired for Neyveli Lignite Corporation Ltd. (NLC) a mining project. As a compensation package to those persons whose lands were acquired prior to 2004, the NLC initially gave employment to one of the family members whose lands were thus acquired. When there was no further scope to give employment, NLC decided to award minor contracts to the members of the families to promote themselves as entrepreneurs. Thus the respondents/assessees were awarded various contracts from the year 2003 onwards by NLC. During the year 2006, Service Tax Department made elaborate meetings with the officials of NLC and collected details of the contracts awarded by NLC, on the premise that the respondents who were awarded the contracts were rendering taxable services. In 2006, most of the assesses obtained service tax registration and paid service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matters and the demand is raised only for the short-demand. The demand has been arrived at basing on the details furnished by NLC who has awarded the contracts to the assessees. Pursuant to the interim order of the Tribunal, the Department had produced the letter issued by NLC showing the details of the category of services as well as the details of demand on various categories of services. Only after the department commenced enquiries with NLC and only after being advised by the departmental officers to do so, the assessees obtained registration for various clauses of services. 3.2 It is also submitted by Revenue that copies of statement showing the payment details by various units of NLC to the concerned assessees had been annexed to the show cause notices. In the circumstances, the assessees cannot contend that they were not aware of the reasons for demand of service tax. 3.3 Regarding non-mentioning of the services provided by the assessees on which service tax had been demanded, it is argued that the assessees were very well aware of the services in which they were involved and hence this cannot be taken as an excuse. 3.4 Department's main grievance as emerging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax has merely been demanded on taxable value without clarifying as to what are the services which are being taxed. 4.3 In the show cause notice, it is stated that the statement of NLC is annexed. In the Final Order dated 25.8.2014, passed by the Tribunal, the Tribunal had directed the department to furnish this very statement to the assessees which is evidence that the said statement was not earlier furnished to the assessee. The fact is that no such statement had been provided to them along with the show cause notice. If proper classification was proposed and the amount paid by NLC was amortized against the services mentioned in para 1 of the show cause notice, then the assessee would be eligible for benefit of abatement in regard to works contract service, erection, commissioning and installation services, trading etc. Such benefit could not be claimed because of the lack of clarity in classification of services in the show cause notice. 4.4 With regard to the contention of the department that the contracts are continuous contracts and the assessees having taken registration in 2006 are liable to pay service tax for the period prior to this, learned counsel has submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation for arriving at the tax liability. It is further pertinent to note that as per the SCNs themselves these letters had not been provided to the assessees along with notices. 5.5 Presumably, the same statement of NLC is the one with regard to para-3 of the SCNs where it is mentioned that M/s.NLC Ltd. have furnished details of amounts paid by them to M/s...... (assessee) for the services rendered by them during the period [.....] (copies of the statement showing payment details by various units of NLC are annexed). It is the grievance of the assessees that this statement was never provided or annexed at the time of issue of the SCNs. We find that this contention indeed has some merit. This very Tribunal in its earlier final order dt. 25.8.2014 remanded the case, wherein one of the remand directions was as follows : (a) the adjudicating authority shall provide the statement of NLC to the assessees . ... 5.6 Another major contention of the assessees is that the SCNs did not give break up of the amounts with reference to each services rendered by them. This claim is also not untrue. None of the SCNs indicate the reasoning for proposing tax liability, the servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants, the said statement has not been given to them in spite of such directions. 5.10 The Commissioner (Appeals) in the impugned orders has decided in favour of the assessees mainly on the following grounds : (i) the SCN is not maintainable for the reason that the SCN has failed in giving specific services under which they should have discharged the tax as against the classification done them; (ii) the impugned order is not sustainable inasmuch as the order does not speak individual services and amount received under each service; (iii) the department was aware of all the facts for quite long time as early as 2006 and hence, there is no suppression of facts; hence, extended period cannot be invoked in the present case. 5.11 In respect of Appeal No. S/469/2012 M/s. Thirumurugan Enterprises, based on directions from the earlier Bench, the Revenue had caused certain verifications to be done. Pursuant to the same, vide letter dated 15.11.2016, the Commissioner of Central Excise, Puducherry, inter alia, informs that the letter OC No. 720 dated 28.7.2008, referred to in para 2 of the show cause notice issued to them, where the department claims to have given th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the result, the demands of tax that may have been resultant of these proceedings will fail, ab initio. 6.1 In these circumstances, we are unable to find any infirmity in the impugned orders in these cases, of Commissioner (Appeals) setting aside the demands against the assessees confirmed by authority, for example:- (a) In Order-in-Appeal No. 32/2012 dated 1.5.2012 passed in the case of M/s. MCV Co. The relevant portion of the order is reproduced below-:- 5.5 I find that instant case the impugned Order-in-Original does not contain the details like the category of services under which the service tax liability falls under activities carried out by the appellant and whether such activities could be classified under specific categories of services and applicability of relevant provisions to the said category. Hence I hold that the above case laws are applicable to the instant case. 6.0 I find that the LAA has observed in the impugned order that the appellant were awarded different contracts under different agreement numbers by M/s. NLC providing taxable services under Management, Maintenance or Repair Services, Manpower Recruitment or Supply Services and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This being so the appellant cannot be fastened with duly liability invoking proviso of Sec.73 as there was no intention on the part of the appellant to evade payment of Service Tax as further evidenced by the correspondences the department had with M/s. NLC and the Contractor Association of NLC had with NLC as well department on various occasions. 6.4 In this connection it is pertinent to point out that the Apex Court in the case of Pushpam Pharmaceuticals Company Vs. CCE, Bombay reported in 1995 (78) E.L.T. 401 (S.C.) has held that Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done does not render it suppression of fact. In view of the Apex Courts decision, since the facts was known to the department, the extended time limit is not available to the department and the issue is totally time barred. (b) So also, we do not find any reason to interfere with similar views expressed by the adjudicating Commissioners, for example in an impugned order dated 29.12.2009 in the case of A. Manickam (Appeal No.ST/189/2010). 5) I have carefully gone through the case records. While appreciating the facts as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A ibid. The noticee have referred to several judgments of the Hon ble SC and Tribunals, totally numbering 14 on the maintainability of the impugned notice, of which I find, one is more eloquent to decide on the present case namely CCE Vs Brindavari Beverages 2007 (213) ELT 487 decided by the Hon ble Supreme court: The Show cause Notice is the foundation on which the department has to build up its case. If the allegations in the Show Cause Notice are not specific or on the contrary vague, lack details and or unintelligible that is sufficient to hold that the notice was not given proper opportunity to meet the allegations indicated in the show cause notice in this case what the appellant has tried to highlight is the alleged connections between the various concerns. Therefore the Apex court has held As no sufficient material mush less any material has been placed on record to substantiate the stand of the appellant, the conclusions of the Commissioner as affirmed by CEGAT cannot be faulted. 5.3) From the facts on record/ notice it is understood that the notice were registered with the department from 11-07-2005 and were filing ST3 returns with the department as also paid ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow:- 15. In our opinion, the flaw in the show cause notice is fundamental. The subject says non-realization of customs duty . The body of the show cause notice does not disclose how there is non-realization of customs duty or short payment of it. However, documents have been brought on record including an affidavit-in-opposition and notes of submission purporting to establish what was to be collected was central excise duty and that such duty is computed as customs duty, but nevertheless, collected as central excise duty. The customs authorities by virtue of the above notifications had power to issue the show cause, it was submitted. 16. In our opinion, whether they have the power to do so or not is very secondary. No case has prima facie been made out against the appellant/writ petitioner which he can be required to answer. Under well settled principles if a show cause notice does not disclose any contravention or infraction of any provision of law the person or such show cause notice is a nullity. But, here, it is not such a case. The grounds made in the show cause notice allege that customs duty of ₹ 7,08,98,160/- is due but the reasons in support of such cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding after visiting the factory. The Commissioner (A) has not properly discussed as to why the benefit of the exemption Notification cannot be given to the impugned goods. The fact that the structure manufactured is mounted on the chassis of a vehicle is not in dispute. Hence, the original authority is right in extending the benefit of the exemption Notification. 7.6 The Tribunal in Shubham Electricals Vs. Commissioner of Central Excise, Rohtak - 2015 (34) STR held that failure to gather relevant facts for issuing proper show cause notice cannot provide justification for vague and incoherent show cause notice resulting in seriuos transgression of due process of law. The relevant portion of the order is reproduced below:- 13. We have noticed earlier that the show cause notice itself adverts to the fact that the appellant had provided copies of 20 work orders executed in relation to CWG Projects, particulars of which are set out in a tabular form in para 5 of the show cause notice. From the description of the works in this table, officers could have classified the several works into the appropriate taxable service which may appropriately govern rendition of these serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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