TMI Blog2020 (5) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... ernal Audit Report was issued on 14 December, 2010 incorporating audit paragraphs relating to non payment of service tax. The Show Cause Notice was, however, issued on 18 April, 2013 after period of two years and four months of the issuance of the Internal Audit Report. It cannot, therefore, be said that the facts had been suppressed with intention to avoid payment of tax. The Mumbai Bench of the Tribunal in GAMMON INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [ 1999 (5) TMI 436 - CEGAT, MUMBAI] dealt with this issue and observed that where a Show Cause Notice was issued in September, 1989 even though the Appellant therein had supplied information to the Department in August, 1987, the notice was barred by limitation. The Civil Appeal filed by the Department before the Supreme Court was dismissed on 1 May, 2002 - In the instant case, the Department kept quiet for over two years and four months before issuing of the Show Cause Notice. Thus, the Department was not justified in invoking the extended period of limitation. The demand of service tax, imposition of penalty and interest for any period beyond the period of one year prescribed under Section 73 of the Act, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry was initiated. 5. Ms. Ashmita Nayak, learned Counsel appearing for the Appellant has submitted that the question of law as to whether a sub-contractor is liable to pay service tax, even if the main contractor has discharged the service tax liability on the activity undertaken by the sub-contractor in pursuance of a contract, has now been resolved by a Larger Bench of this Tribunal in Commissioner of Central Excise vs. Melange Developers Private Limited Service Tax Appeal No. 50399 of 2014 decided on 23 May, 2019 , but in the facts and circumstances of the case, the Department was not justified in invoking the extended period of limitation. Learned Counsel also pointed out that the Commissioner was not justified in observing that the Appellant had not filed a reply to the Show Cause Notice because the reply to the Show Cause Notice was actually filed in the office of the Commissioner of Central Excise on 2 July, 2019, as is clear from the endorsement made on the copy of the notice which has been enclosed with the Appeal. In regard to the extended period of limitation, learned Counsel pointed out that in the first instance an audit for the period September, 2006 to March, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the reply dated 1 July, 2014 was submitted on 2 July, 2014 as would be clear from the endorsement bearing receipt no. 4624 made on the copy of the reply on 2 July, 2014. The impugned order is dated 24 July, 2014. It appears that the reply submitted in the office could not be placed before the Commissioner at the time the order was passed. 10. The only issue that requires consideration in this Appeal is as to whether the Department was justified in invoking the extended period of limitation because the matter on merits as to whether a sub contractor is liable to pay service tax on the activity undertaken by a sub-contractor in pursuance of a contract has been decided by a Larger Bench of the Tribunal in M/s Melange Developers Limited in favour of the Department. 11. Section 73 of the Finance Act, 1994, the Act deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded. The provision as it stood in 2007 provides that where any service tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the Central Excise Officer may within one year from the relevant date, serve notice on the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant stated: a. The audit of records of service tax for the period September, 2006 to March, 2010 was conducted by the Internal Audit of the Department on 13 and 14 September, 2010 and internal audit report was issued on 14 December, 2010 incorporating audit paragraph relating to non-payment of service tax amounting to ₹ 59,79,115/- on the value of work received as per TDS certificates. The Show Cause Notice was, however, issued on 18 April, 2013 i.e. after more than two years after issue of internal audit report on 14 December, 2010. 14. The impugned order accepts the case of the Department for invoking the extended period of limitation and the relevant portion of the order is as follows: 41. As regards the allegation of suppression of facts, I find that there has been a deliberate act by the noticee to suppress the taxable value and material facts from the department and not paying the service tax on entire consideration received by them for providing such services to the various recipients during December, 2007 to June, 2012 as discussed above. I observed that the noticee did not comply with the provisions of service tax law by not declaring the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance. Undisputedly, CEGAT in Continental Foundation Joint Venture case (supra) was held to be not correct in a subsequent larger Bench judgment. It is, therefore, clear that there was scope for entertaining doubt about the view to be taken. The Tribunal apparently has not considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act. 16. In Binjrajka Steel Tubes Limited vs. Commissioner of Central Excise, Hyderabad-III 2016 (324) ELT 302(Tri.-Hyd), the submission regarding audit note was also examined to determine whether the Department was justified in invoking the extended period of limitation. The Tribunal held that in such a situation the Department cannot invoke the of extended period of limitation and the relevant paragraph of the order is reproduced below; 7. Coming to limitation, the audit of appellant was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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