TMI Blog2018 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 65 (91A) of the Finance Act - there is no infirmity in the order under challenge where the extra levy of the subsequent sale of flats has been done away. So, as far as that part of the order is concerned, it is upheld. Penalty u/s 78 - tax liability deposited before issuance of SCN - Held that:- There has been plethora of judgements that where the assessee has paid the tax liability before the issuance of show cause notice and the authorities could not find any fraud or wilful intention on the part of the respondent, in terms of provisions contained in Section 73 (3) of the act, no further proceedings were warranted - the act of land owner for getting the map approved for the complex to be constructed on this land by same developer prior the sale is complete since invites no service tax liability, the appellant cannot be accused of suppressing the facts with an intention to commit fraud or wilful suppression - There is no evidence on record which can prove beyond reasonable doubt about the alleged fraud or wilful intention to suppress the facts, so as to evade tax liability - penalty set aside. Appeal allowed in part. - Service Tax Appeal No.ST/50882/2018 [SM] - FI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 14,51,039/- as has not been paid by him for a period of 2010-11 to 2012-13 should not be recovered from the appellant under the proviso to Section 73 (1) of the Act and the Service Tax of ₹ 14,00,485/- already paid by the appellant should not be appropriated against the said amount and as to why the various penalties under Section 76 and 78 shall not be imposed alongwith the imposition of late fee under section 70 of the Act read with Rule 7 C. Also as to why interest on the amount of Service Tax not paid should not be recovered from the appellant in terms of Section 75 of the Act. 3. While adjudicating upon the said show cause notice, the Additional Commissioner vide its order dated 29th November, 2016 has held that the extra demand of Service Tax amounting to ₹ 50,544/- over and above, what is already paid by the appellant is not sustainable. However, the Commissioner had imposed the penalty to the extent of equal amount of tax evaded as mandatory under Section 78 of the Finance Act. The appellant filed an appeal before Commissioner (Appeals) who vide his order dated 30th November, 2017 has upheld the order of Additional Commissioner. Aggrieved of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dismissed. 7. After I have heard both the parties and perused the entire record, the considered observation and findings of mine are as follows: 7.1 That the show cause notice dated 19th October, 2015 has been issued upon the appellant in consequence of a raid conducted by the Department in the premises of M/s.Prasant Sagar Builder and Developers Ltd on 12th June, 2011, from where the documents like agreement between the appellant and M/s.Prasant Sagar Builder and Developers Ltd and the completion certificate of project of Shirsagar Apartment were obtained. It is an apparent and admitted fact that the Department recorded the statement of appellant on 22nd June, 2012, where there is a specific mention that the appellant got him registered with Service Tax authorities on 21st June, 2012 and even deposited the Service Tax liability. These admitted facts make one thing clear that in lieu of some Service Tax liability upon the appellant, he deposited the same as per the self-assessment much prior to the show cause notice in question. The issue of his liability has been discussed at length by the authorities below and it was held that the flats acquired by the appellant in the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the goods involved in a works contract in the same way in which the sales tax was leviable on the price of the goods and materials supplied in a building contract, which had been entered in two distinct and separate parts. Service Tax was first introduced by Finance Act, 1994 and various services were set out in Section 65 thereof, as being amenable to tax. The legislative competence of such tax is to be found in Article 248 read with Entry 97 of list (1) of the 7th Schedule to the Constitution of India. Various amendments were made in the Sections of the Finance Act by which the work contracts/ the Composite contracts, which were the indispensable and composite works split so that only labour and service element of such contracts would be taxed under the heading Service Tax. In Mathu Ram Agarwal vs. State of Madhya Pradesh 1999 (8) SCC 667 , it was held that while interpreting legal provision words cannot be added to or substituted so as to give a meaning to the statute, which will serve the spirit and intention of the Legislature, the statute should clearly and unambiguously convey following components of tax. (1) The taxable event attracting the levy of tax (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he developer to his buyer which has included the element of Service Tax, the liability of the land owner shall also be calculated accordingly. In view thereof, I find no infirmity in the order under challenge where the extra levy of the subsequent sale of flats has been done away. So, as far as that part of the order is concerned, I hereby uphold. 11. Now coming to the part of imposing penalty. Both the authorities below have considered the non-payment by the appellant prior the inspection by the authorities in the premises of the developer as suppression of fact with an intention of evading tax. Apart, the fact remains is that the land owner has got himself registered under Service Tax on 21st June, 2011 and rather deposited the tax liability on the said date itself i.e. very much prior to the issuance of show cause notice to him. There has been plethora of judgements that where the assessee has paid the tax liability before the issuance of show cause notice and the authorities could not find any fraud or wilful intention on the part of the respondent, in terms of provisions contained in Section 73 (3) of the act, no further proceedings were warranted as it was held in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies on the shoulders of the one alleging it. This Court observed in Union of India v. Ashok Kumar Ors. - (2005) 8 SCC 760 that it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility. Burden of proof of proving mala fide conduct under the proviso to Section 28 of the Act lies with the Revenue; that in furtherance of the same, no specific averments find a mention in the show cause notice which is a mandatory requirement for commencement of action under the said proviso; and that nothing on record displays a willful default on the part of the appellant, extended period of limitation under the said provision could not be invoked against the appellant. 12. There is no evidence on record which can prove beyond reasonable doubt about the alleged fraud or wilful intention to suppress the facts, so as to evade tax liability. 13. As a result, penalty as imposed upon by the Commissioner (Appeals) is hereby set aside. In consequence of entire above discussion, App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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