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2018 (8) TMI 704

books and accounts of a third party - - Held that:- The issue as to what would amount to wilful mis-statement or supression of fact has been dealt with by the Supreme Court in Uniworth Textiles Ltd. v CCE, Raipur [2013 (1) TMI 616 - SUPREME COURT] wherein it has been held that mere non payment of duties is not equivalent to collusion or wilful mis-statement or supression of facts, otherwise there would be no situation for which ordinary limitation period would apply. Inadvertent non-payment is to be dealt within the normal limitation period and the burden is on Revenue to prove allegation of wilful mis-statement. - In the case at hand also, the CSIDC is an entity under the control of the Government of Chhattisgarh. It does not belong to an individual who would evade tax to corner profit in its business activity - The explanation putforth by the CSIDC that it was under bona fide impression that being an entity under the control of Government it was not liable to pay service tax appears to be reasonable explanation, therefore, mere non registration under Section 65 or non payment of service tax on the maintenance charges collected from industries would not amount to wilful s .....

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65 of Chapter V of the Finance Act, 1944 (for brevity 'the Act, 1944'). During the audit of books and records of M/s G.R. Sponge & Power Limited, Raipur, the Central Excise Audit Team observed that the respondent had charged and collected ₹ 3,25,936/- from the said factory towards the maintenance charges and street light charges vide bill No.87 dated 28-6-2006 without getting itself registered with the Service Tax Department nor paying any service tax. The respondent was charging and collecting maintenance charges and other taxable service charges from many other factories also, therefore, the matter was investigated. During such further investigation the respondent was found to have collected different amounts in the following manner : S. No. Period Amount Received Rate of Service Tax Service Tax Payable E Cess/ SHE Cess Payable 1 1-7-03 to 31-3-04 5390000 8% 431200 - 2 1-4-04 to 31-3-05 10581000 10.20% 1058100 21162 3 1-4-05 to 31-3-06 7326000 10.20% 732600 14652 4 1-4-06 to 31-3-07 22606000 12.25% 2712720 54254 5 1-4-07 to 31-3-08 12493000 12.36% 1499160 29983/14992 Total 56396000 6433780 120051/14992 4. A show notice was issued to the respondent on 8-7-2008 d .....

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being a Government undertaking it was under bona fide impression that it is not liable to pay service tax. Learned counsel would refer to the circular No.89/7/2006-ST dated 18-12-2006 issued by the Central Board of Excise and Customs clarifying that the fees collected by public authorities while performing statutory functions/duties under the provisions of a law is exempted from payment of service tax. 10. Countering the above submission, learned counsel appearing for the Revenue has referred to circular No.192/02/2016-Service Tax dated 13-4-2016 issued by the Department of Revenue (Tax Research Unit), Ministry of Finance, Government of India, wherein Entry No.5 dealing with services provided in lieu of fee charged by Government or a local authority, it is clarified that any activity undertaken by Government or a local authority against a consideration constitutes a service and the amount charged for performing such activities is liable to service tax. 11. The issue as to what would amount to wilful mis-statement or supression of fact has been dealt with by the Supreme Court in Uniworth Textiles Ltd. v CCE, Raipur [2013 (288) ELT 161 (SC)] wherein it has been held that mere non pay .....

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ted to "suppression of facts" and therefore, excise authorities were entitled to invoke proviso to Section 11A of the Act. It also appears from that decision that this Court also held that if any classification was due to mis-interpretation of the classification list, suppression of facts could not be alleged. From this judgment, it is therefore clear that since the excise authorities had collected samples of the products manufactured by the appellant and inspected the products and the relevant facts were very much in the knowledge of the excise authorities and nothing could be shown by the excise authorities that there was any deliberate attempt of nondisclosure to escape duty, no claim as to "suppression of facts" could be entertained for the purpose of invoking the extended period of limitation within the meaning of proviso to Section 11A of the Act. 13. In the case at hand also, the CSIDC is an entity under the control of the Government of Chhattisgarh. It does not belong to an individual who would evade tax to corner profit in its business activity. The explanation putforth by the CSIDC that it was under bona fide impression that being an entity under the c .....

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vil Procedure are attracted by the words of section 116C of the Representation of the People Act with the result that the respondent may support the decision and judgment on any ground decided against him. This Court in Ramanbhai Ashabhai Patel v. Dabhi Ajitkumar Fulsinji (1965) 1 SCR 712 = (AIR 1965 SC 669) negatived the contention that the respondent was not competent to challenge the correctness of a finding as he had not preferred an appeal and said "We cannot lose sight of the fact that normally a party in whose favour the judgment appealed from has been given will not be granted special leave to appeal from it. Considerations of justice, therefore require that this Court should in appropriate cases permit a party placed in such a position to support the judgment in his favour even upon grounds which were negatived in that judgment". 17. We have, thus, no hesitation in answering the second question that cross-objection filed by the respondent is maintainable, however, at the time of hearing of appeal respondent's counsel failed to persuade us to frame any other question of law touching upon its liability to pay service tax on the ground that the Corporation havin .....

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