TMI Blog2023 (2) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... ory provision differently. This is notwithstanding that the Revenue may finally prevail in its interpretation of the statutory provisions and the assessee may not. Mis-statement and suppression of facts must necessarily be examined from the perspective of sufficient disclosure or statements of facts and not contentious interpretations of statutory provisions. Once an assessee has truly disclosed the facts, it would not be apposite to invoke the provisions of Section 73(1) of the Act only on the ground that the assessee has classified its services under a head which the revenue considers erroneous. However, if such classification is, ex facie, untenable and done with the intent of evading any liability, the provisio to section 73(1) of the Act, would be applicable. In Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay [ 1995 (3) TMI 100 - SUPREME COURT ], the Supreme Court had interpreted the proviso to Section 11A of the Central Excise Act, 1944, which was similarly worded as the proviso to Section 73(1) of the Act, and held that 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commisioner had also imposed penalty of an equivalent amount of ₹2,44,48,095/- under Section 78 of the Act and a penalty of ₹10,000/- for failing to file the correct ST-3 returns, disclosing the taxable income and Cenvat Credit in accordance with the provisions of Section 70 of the Act. 3. The aforesaid order-in-original was passed pursuant to a show cause notice dated 17.04.2014 issued by the Commissioner. The Tribunal found that the show cause notice was beyond the period as prescribed under Section 73(1) of the Act. The Commissioner had sought to recover the Cenvat Credit claimed by the respondent in respect of service tax liability for the period of July 2008 to January 2009. The learned Tribunal held that the extended period of limitation of five years was unavailable as there was no suppression of facts or any intention to evade tax. 4. The learned Tribunal also rejected the Revenue s contention that any liability could be imposed under the provisions of Section 73A of the Act, as proceedings under the said Section had been dropped by the Commissioner, and the Revenue had not preferred any appeal against the order-in-original dated 31.01.2017. 5. The cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projected the following questions for consideration of this Court: I) Whether the availment of Cenvat credit and its utilization for payment of service tax on construction of flats for sale to buyers even though the activity to develop residential colonies and commercial properties were exempt from service tax vide Notification No.24/2010 dated 22.06.2010, is in contravention of provisions of Rule 3 read with Rule 2(1) and 2(p) of the Cenvat Credit Rules, 2004? II) Whether the extended period of limitation is invokable correctly or not. III) Whether the extended period of limitation is invokable correctly or not especially when admittedly the service tax has been collected on exempted service and not deposited with the government? IV) Whether the extended period of limitation is invokable correctly or not especially when admittedly the service tax has been collected on exempted service and not shown in ST returns? V) Whether the learned CESTAT is correct in ignoring the specific findings in order-in-original that the respondent has collected service tax on exempted service and has not deposited the same in cash? VI Whether the learned CESTAT is correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44,48,095/- under Section 73A of the Act. As noted above, the Revenue had not filed any appeal against the order-in-original and had accepted the said order. Thus, no demand can now be raised on the ground that the respondent had not deposited the entire amount collected from its customers as service tax, under Section 73A(2) of the Act. If the Revenue s contention is accepted that the services rendered by the appellant were not chargeable to tax at the material time, the Revenue may have been justified in demanding that any amount recovered from purchasers as service tax be deposited to the credit of the Central Government under Section 73A(2) of the Act. However, as stated above, that question does not arise as the Revenue had accepted the order, dropping the proceedings under Section 73A of the Act. 14. The learned Tribunal rightly found that the proposal and the show cause notice to recover a sum of ₹2,44,48,095/- under Section 73A of the Act and the interest thereon under Section 73B of the Act, was not confirmed by the learned Commissioner in his order-in-original. Accordingly, the learned Tribunal held that, in the absence of a cross-appeal by the Department, it wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent 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 thirty months , the words five years had been substituted. Explanation .- Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of thirty months or five years, as the case may be. 19. It is apparent from the above that the proviso to Section 73(1) of the Act is applicable only where it is found that the service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud; collusion; wilful mis-statement; or suppression of facts; or contravention of the provisions of the Act and the Rules made thereunder with the intention to evade payment of service tax. In the present case, there is no allegation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Tribunal had found that there was no suppression of facts in the present case. The learned Tribunal also faulted the order-in-original inasmuch as the Commissioner had held that it was possible to invoke the extended period even where the assessee had no intent to evade payment of service tax. 23. In Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay: 1995 Supp (3) SCC 462, the Supreme Court had interpreted the proviso to Section 11A of the Central Excise Act, 1944, which was similarly worded as the proviso to Section 73(1) of the Act, and observed as under: 4. Section 11A empowers the Department to re-open proceedings if the 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. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppression of mention facts. In fact it is clear that the Appellant did not have any such intention and was acting under a bonafide belief. (emphasis added) 26. In Continental Foundation Joint Venture Holding, Nathpa H.P. v. Commissioner of Central Excise, Chandigarh: 2007 (216) E.L.T. 177 (SC), the Supreme Court held as under: 12. The expression suppression has been used in the proviso to Section 11A of the Act accompanied by very strong words as fraud or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
