TMI Blog2020 (4) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... he Show Cause Notice mentions that suppression was with an intent to evade payment of service tax. It is correct that Section 73 (1) of the Act does not mention that suppression of facts has to be wilful since wilful precedes only mis-statement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under Section 73(1) of the Act, suppression of facts have still to be wilful with an intent to evade payment of service tax - It is, therefore, clear that even when an assessee has suppressed facts, the extended period of limitation can be evoked only when suppression is shown to be wilful with intent to evade the payment of service tax. The demand made for period within one year from the relevant date is justified but taking recourse to the extended period of limitation provided for in the proviso to Section 73 (1) of the Act is not justified - The demand made for the period within the normal period of one year is confirmed but this would have to be determined by the Commissioner afresh within a period of three months after providing an opportunity to the Appellant. The Commissioner shall also determine whether int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the service tax Department and also paid service tax for the mining undertaken at Hirapur mines. It was also stated that the Appellant also paid service tax for the new contract executed for Meghnagar mines from March, 2011 under the agreement dated 22 March, 2011. In regard to the invocation of the extended period of limitation, as provided for under the proviso to Section 73 (1) of the Act, the Show Cause Notice mentions that by not getting itself registered with the Department and failing to declare the receipts of the taxable services rendered to the State Corporation, the Appellant appeared to have done so with an intention to suppress the value of taxable service so as to avoid detection by the Department that it was not paying service tax. 5. The Commissioner confirmed the demand of service tax and the relevant observations are as follows; I find that the assessee has been providing services to MPSMC since 01.06.2007 i.e. the date from which the mining services were brought under the purview of service tax, without obtaining service tax registration. The assessee had obtained registration (ABRPS7384RSD002) in January, 2012 at Division Sagar of Bhopal Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Learned Authorised Representative also submitted the bonafides of the Appellant could have been understood, if after coming to know in January, 2011 that mining was a taxable service, it had immediately got itself registered with the Department, but it was only when a fresh contract was entered for the Meghnagar mines with the State Corporation that the Appellant ultimately got itself registered after the investigation in the present proceedings had started. In this connection learned Authorised Representative placed reliance upon a decision of the Hyderabad High Court in NRI Academy Guntur vs. Union of India 2019(20) GSTL 23 (A.P.) as also a decision of the Principal Bench of the Tribunal in Bharti Hexcom Limited vs. Commissioner of Central Excise, Jaipur-I 2019 (24) GSTL 588 (Tri.-Del.) 8. The submissions advanced by the learned Counsel for the Appellant and the learned Authorised Representative of the Department have been considered. 9. The Appellant entered into an agreement with the State Corporation for mining of rock phosphate on 05 July, 2005. Royalty/Cess/Toll Tax etc., were to be paid by the State Corporation to the State Government. There was no mention of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words one year , the words five years had been substituted. 12. It would, therefore, be seen that where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice. 13. The relevant date has been defined in section 73 (6) of the Act as follows; 73(6) For the purpose of this section, relevant date means,- (i) In the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short paid- (a) where under the rules made under this Chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, the last date on which such return is to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts has to be wilful since wilful precedes only mis-statement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under Section 73(1) of the Act, suppression of facts have still to be wilful with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has also to be wilful with an intent to evade payment of service tax. 19. Before adverting to the decisions of the Supreme Court and the Delhi High Court, it would be useful to reproduce the proviso to section 11A of Central Excise Act, 1944 Excise Act , as it stood when the Supreme Court explained suppression of facts in Pushpam Pharmaceutical Co . and which has been reproduced in the judgment of the Delhi High Court and it is as follows: 11A: Where any duty of excise has not been levied or paid or has been short-levied or short-pain or erroneously refunded, by the reason of- (a) fraud; or (b) collusion; or (c) any wilful misstatement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Act of the rules made thereunder with intent to ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties the omission by one to do what he might have done and not that he must have done, does not render it suppression. (emphasise supplied) 21. This decision was referred to by the Supreme Court in Anand Nishikawa Company Ltd. vs. Commissioner of Central Excise 2005 (188) ELT 149 (SC) and the observations are as follows: 26 .. This Court in the case of Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay, while dealing with the meaning of the expression suppression of facts in proviso to Section 11A of the Act held that the term must be construed strictly. It does not mean any omission and the act must be deliberate and willful to evade payment of duty. The Court, further, held :- In taxation, it ( suppression of facts ) can have only one meaning that the correct information was not disclosed deliberately to escape payment of duty. 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. 27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held as follows; 27. Therefore, it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word suppression in the proviso to Section 11A(1) of the Excise Act has to be read in the context of other words in the proviso, i.e. fraud, collusion, wilful misstatement . As explained in Uniworth (supra), misstatement or suppression of facts does not mean any omission. It must be deliberate. In other words, there must be deliberate suppression of information for the purpose of evading of payment of duty. It connotes a positive act of the assessee to avoid excise duty. xxxxx Thus, invocation of the extended limitation period under the proviso to Section 73(1) does not refer to a scenario where there is a mere omission or mere failure to pay duty or take out a license without the presence of such intention. xxxxx The Revenue has not been able to prove an intention on the part of the Appellant to avoid tax by suppression of mention facts. In fact it is clear that the Appellant did not have any such intention and was acting under a bonafide belief 25. It is, therefore, clear that even when an assessee has suppressed facts, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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