TMI Blog2019 (5) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... could have been invoked only when the appellant suppressed facts with an intent to evade payment of Service Tax. All that has been observed by the Commissioner is that Cenvat Credit in respect of Goods and Transport Services was wrongly taken by the Appellant. This would not be sufficient to attract the extended period of limitation. The benefit of the proviso to Section 73(1) could be taken only when there was an explicit averment in the show cause notice that there was suppression of facts with an intent to evade payment of duty. In the absence of such an averment, the extended period of limitation could not have been invoked. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 148 of 2011 - A/10828/2019 - Dated:- 4-4-2019 - MR. JUSTICE DILIP GUPTA, PRESIDENT And MR. C.J. MATHEW, MEMBER (TECHNICAL) Shri Hardik Modh, Advocate for the Appellant Shri T.G. Rathod, Joint Commissioner (AR) for the Respondent ORDER JUSTICE DILIP GUPTA This appeal has been filed to assail the order dated 16 February 2010 passed by Commissioner of Service Tax, Ahmedabad by which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and why the cenvat credit amounting to ₹ 94,75,098/- reversed by the appellant should not be adjusted and confirmed against the said demand. The Appellant was also asked to explain why interest amounting to ₹ 18,15,95/- should not be recovered and why penalty should also not be imposed on the appellant. 5. The appellant submitted a reply to the show cause notice on 20 August 2009. In paragraph 2.9 of the reply, the appellant categorically stated that the extended period of limitation could be invoked under the proviso to Section 73(1) of the Act only in case there was failure to pay service tax on account of wilful suppression with intent to evade payment of service tax, but this statutory requirement was absent in the show cause notice. 6. Though paragraph 10 of the impugned order does refer to the submission made by the appellant in reply to the show cause notice that there was no basis for invocation of the extended period of limitation, but it does not deal with this submission as all that has been stated in paragraphs 18 and 19 of the impugned Order dated 16 February, 2010 is:- 18. The service tax is a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in 2010 (256) ELT 369 (Guj.) and the decision of the Madras High Court in Days Inn Deccan Plaza vs. Commissioner of Service Tax (Appeals) Chennai-I reported in 2016 (45) STR 502 (Mad.). 9. We have considered the submissions advanced by the learned Counsel for the Appellant and the learned Authorized Representative of the Department. 10. The appellant is engaged in providing services of Clearing and Forwarding Agent, Business Auxiliary Service, Storage Warehouse Service, Cargo Handling Service, Consulting Engineering Services, Port Services and Transport of Goods by Road Services. An internal audit was conducted for the period 01 April 2004 to 31 March 2006. It was observed that the appellant had wrongly taken Cenvat credit of ₹ 94,75,098/- on Goods Transport Agency Services in the month of September 2005 and though it had reversed the credit, it did not pay interest. The show cause notice was issued to the appellant on 18 June, 2009. 11. Section 73 (1) of Act, deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded. The said section, as it stood at the relevant ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. It is in this context that the Supreme Court observed- 2. ---------- The Department invoked extended period of limitation of five years as according to it the duty was short-levied due to suppression of the fact that if the turnover was clubbed then it exceeded Rupees Five lakhs. ------------ 4. A perusal of the proviso indicates that it has been used in company of such strong works as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. The aforesaid decisions of the Supreme Court were relied upon by the Supreme Court in Uniworth Textiles Ltd. and the relevant portion of the judgment is reproduced below. 12. We have heard both sides, Mr. R.P. Batt, learned senior counsel, appearing on behalf of the appellant, and Mr. Mukul Gupta, learned senior counsel appearing on behalf of the Revenue. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient to attract the extended period of limitation. 21. This apart, the benefit of the proviso to Section 73(1) could be taken only when there was an explicit averment in the show cause notice that there was suppression of facts with an intent to evade payment of duty. In the absence of such an averment, the extended period of limitation could not have been invoked. This is what has not been observed by the Supreme Court in Commissioner of Central Excise vs HMM Limited reported in 1995 Supp (3) SCC 322 and the observations are: 2. Now in order to attract the proviso it must be shown that the excise duty escape payment by reason of fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision of the Act or of the Rules made thereunder with intent to evade payment of duty. In that case the period of six months would stand extended to 5 years as provided by the said proviso. Therefore, in order to attract the proviso to Section 11-A(1) it must be alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of fact on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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