TMI Blog2021 (9) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Protocol Officer that the Notifications require a correlation to be established between the invoices and the undertakings. Once these two documents can be correlated, though not in a manner provided for, the substantive conditions to the Exemption Notifications stand fulfilled and the exemption cannot be denied. In the present case, the appellant was able to correlate the invoices with the undertakings. It can, therefore, be concluded that the appellant satisfied the substantial conditions set out in the Exemption Notifications - It needs to be noted that even for the subsequent period, the appellant continued to provide such services to the US Embassy and the exemption has been allowed. Extended period of limitation - HELD THAT:- The period of dispute in the present appeal is from 01.10.2008 to 31.03.2013. The show cause notice was issued on 16.04.2014 - the appellant had in the ST-3 returns clearly mentioned about availing the benefit of the Exemption Notifications. The Department cannot, therefore, contend that the appellant had suppressed any fact, much less with an intent to evade payment of service tax - It is, therefore, clear that even when an assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he party does not appear to be eligible for exemption under Notification No. 33/2007-ST dated 23.05.2007 and Notification No. 27/2012- ST dated 20.06.2012 as they did not fulfill the conditions laid down in the notifications. The said Notifications exempts taxable services so provided by any person for official use of a foreign diplomatic mission or consular post in India from whole of the service tax leviable under section 66 or 66B of the Finance Act, 1994, subject to fulfilment of certain conditions. Whereas, from scrutiny of the documents submitted by the said party, it appears that they failed to fulfil the following conditions in as much as: (i) The exemption certificates issued by the Ministry of External Affairs in fovour of the American Embassy were not authenticated by the embassy; (ii) Undertakings issued by the Embassy for claiming exemption from service tax to the said party were not in original; and (iii) The invoices issued under the provisions contained in rule 4A of the Service Tax Rules, 1994 by the party to the American Embassy under exemption from service tax not contained the serial number and the date of the undertakings furnished by the said Embassy. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on doing business from the Noida address without having any valid registration certificate. 10. In regard to the issue at (c), the Principal Commissioner found that the appellant had violated the provisions of the Exemption Notifications knowingly for the purpose of evading service tax and, therefore, the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act was correctly invoked. 11. In regard to the issue at (d), the Principal Commissioner found that once the service tax liability was confirmed, interest and penal provisions had to follow. 12. Shri B.L. Narasimhan learned counsel appearing for the appellant made the following submissions: (i) The appellant is not liable to pay service tax on the services rendered to the US Embassy. In this connection it has been submitted that the appellant has satisfied the conditions specified in the Exemption Notifications dated 23.05.2007 and 20.06.2017; (ii) The impugned order has gone beyond the show cause notice as it has denied exemption for reasons not even stated in the show cause notice. In this connection reliance has been placed on the following decisions: a) Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate by the Protocol Division of the Ministry of External Affairs that it is entitled to exemption from service tax, as stipulated in the certificate, based on the principle of reciprocity; (ii) the head of such foreign diplomatic mission or consular post, or any person of such mission or post authorized by him, shall furnish to the provider of taxable service, a copy of such certificate duly authenticated by him or such authorized person, alongwith an undertaking in original, signed by him or such authorized person, bearing running serial number commencing from a financial year and stating that the services received are for official purpose of the said foreign diplomatic mission or consular post; (iii) the head of such foreign diplomatic mission or consular post or such authorized person shall maintain an account of such undertakings issued during a financial year and such account shall contain:- (a) the serial number and date of issue of such undertakings; (b) the name and the registration number of the provider of taxable service; and (c) the description of taxable service and invoice number. (iv) the invoice or bill or as the case may be, the challan iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otocol Department of the State concerned issues to each of such diplomatic agent or career consular officer an identification card bearing unique identification number and containing a photograph and name of such diplomatic agent or career consular officer and the name of the foreign diplomatic mission or consular post in India, where he is posted; (iii) that the head of the foreign diplomatic mission or consular post, or any person of such mission or post authorised by him, shall furnish to the provider of taxable service, a copy of such certificate duly authenticated by him or the authorised person, alongwith an undertaking in original, signed by him or the authorised person, bearing running serial number commencing from a financial year and stating that the services received are for official purpose of the said foreign diplomatic mission or consular post; or for personal use of the said diplomatic agent or career consular officer or members of his/her family mentioning the unique identification number as appearing in the identification card issued to them and stating that the services received are for personal use of the said diplomatic agent or career consular officer or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st day of July, 2012. 18. A bare perusal of the Notification dated 23.05.2007 indicates that the following conditions have to be satisfied: i. Services must have been rendered to a diplomatic mission or consular post in India; ii. The Protocol Division of the Ministry of External Affairs [the Protocol Division] must issue a certificate to the specified diplomatic mission or consular post in India stating that it is entitled to claim exemption from payment of service tax; iii. The diplomatic mission or consular office must provide the taxable service provider an authenticated copy of such certificate along with an original undertaking (signed and serially numbered) stating that the services have been received for official purpose; and iv. The invoice raised by the service provider must carry the date and serial number of the undertaking. 19. There is no dispute in the present appeal with regard to the fulfilment of the first condition. 20. The second condition states that the Protocol Division must issue a certificate to the diplomatic/consular post in India. In this regard, the US Embassy was issued certificates from the Protocol Division and this has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from the US Embassy. So long as the undertakings were furnished, it would be immaterial if they were not in the proper format unless some relevant requirement was not contained in the undertaking so as to make the undertaking of no consequence. 23. The fourth condition to the Exemption Notification mentions that the invoices issued by the service provider must carry the serial number and date of the undertaking. The purpose of this condition is to ensure proper correlation between the services rendered and the exemption claimed by the service provider. The show cause notice has alleged that the invoices did not carry the serial number of the undertakings. The exemption was sought to be denied on this ground and the impugned order has also confirmed such denial. 24. Learned Counsel for the appellant submitted that the appellant was able to correlate each invoice with the corresponding undertaking. This is for the reason that the passenger name and the ticket number given on the invoice has also been mentioned on the corresponding undertaking. In this connection reference has been made to a particular invoice corresponding to the certificate and the undertaking and it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Supreme Court that rule 66(2) provided the challan to be the mode of proving that the admitted tax was deposited. However, section 9 of the UP Sales Tax Act was more general and the proviso thereunder required only satisfactory proof. Hence, it was not open to a rule to make the section narrower by prescribing a particular mode. In this connection, the Supreme Court observed: The rule lays down one uncontestable mode of proof which the court will always accept but it does not exclude the operation of the proviso when equally satisfactory proof is made available to the officer hearing the appeal and it is proved to his satisfaction that the payment of the tax has been duly made and in time . In this sense, the rule can be regarded as directory since it lays down one of those modes which will be unquestioned for its validity. The other modes of proof are not necessarily shut out. It is to be remembered that all rules of procedure are intended to advance justice and not to defeat it. (emphasis supplied) 29. Reliance can also be made to the judgment of the Allahabad High Court in J.K. Manufacturers Ltd. vs. The Sales Tax Officer, Sector ll, Kanpur and Others [196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the fact that the appellant was claiming benefit under the Exemption Notifications and so no element of suppression or mala fide can be attributed to the appellant in such circumstances. In this connection reliance has been placed on the following decisions: a) Delhi International Airport Limited vs. Commissioner of CGST, Delhi 2019 (24) GSTL 403 (Tri.- Del.); b) Onward E-Services Ltd. vs. Commissioner Of Service Tax, Mumbai-Ii 2019 (21) G.S.T.L. 167 (Tri. - Mumbai); and c) Bharat Hotels Limited vs. Commissioner, Central Excise (Adjudication) 2018 (2) TMI 123- Delhi High Court. 34. The period of dispute in the present appeal is from 01.10.2008 to 31.03.2013. The show cause notice was issued on 16.04.2014. 35. The submissions advanced by the learned counsel for the appellant deserves to be accepted. The appellant had in the ST-3 returns clearly mentioned about availing the benefit of the Exemption Notifications. The Department cannot, therefore, contend that the appellant had suppressed any fact, much less with an intent to evade payment of service tax. 36. The Supreme Court and the Delhi High Court have held that suppression of facts has to be w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. xxxxxxx 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. xxxxxxx 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. 40. In Delhi International Airport, the Tribunal held as follows: Second issue on which the appellant has asserted is that extended period of limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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