TMI Blog2023 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax. In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] , the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. This iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asati, Advocates for the Appellant Shri Rajeev Kapoor, Authorized Representative for the Department ORDER M/s. Central Registry of Securitisation, Asset Reconstruction and Security Interest of India [the appellant] has filed this appeal to assail the order dated 22.05.2017 passed by the Commissioner, Service Tax, Delhi-III Commissionerate [the Commissioner] by which the demand has been confirmed with interest and penalty by invoking the extended period of limitation contemplated under section 73 of the Finance Act 1994 [the Commissioner]. 2. The issue involved in the present appeal relates to demand of service tax on the fees received by the appellant from banks/financial institutions for registration of transactions of securitization, asset reconstruction and security deposits under the category of business support service [BSS] and online information and database access or retrieval service [OIDARS]. 3. The appellant, a company incorporated under section 8 of the Companies Act, was set up by the Central Government by a notification dated 31.03.2011 as a central registry in terms of section 20 of The Securitisation and Reconstruction Financial Assets and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions under the category of BSS and OIDARS . The impugned order has also confirmed the demand of service tax on the fees collected by the appellant from the banks/financial institutions under both the categories of BSS and OIDARS ; (ii) Fees collected by the appellant is not liable to service tax under BSS ; (iii) Appellant is not providing any service of OIDARS ; and (iv) The extended period of limitation could not have invoked in the facts and circumstances of the case. 7. Shri Rajeev Kapoor, learned authorized representative appearing for the Department, however, supported the impugned order and submitted that it does not call for any interference. 8. Two principal submissions have been made by learned counsel for the appellant for setting aside the impugned order. The first is that to the extended period of limitation under the proviso to section 73(1) of the Finance Act could not have been invoked in the facts and circumstances of the case and the second is that service tax cannot be proposed and confirmed under two different heads of service for one single activity. These two issues are, therefore, being considered. Extended period of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word one year , the word five years has been substituted. 13. It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be wilful since wilful precedes only misstatement. 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 Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax. 14. In Pushpam Pharmaceutical Co. vs. Commissioner of Central Excise, Bombay [1995 (78) E.L.T. 401 (SC)] , the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext 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. xxxxxxxxx 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. xxxxxxxxxx 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. (emphasis supplied) 16. It would be useful to examine how this aspect has been considered in the show cause notice and the order passed by the Commissioner. 17. The show cause notice, while invoking the extended period of limitation, states: 7. Whereas it further appears tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts must be deliberate with intention to evade payment of duty. It connotes a positive act on the part of the assessee to avoid excise duty and mere omission to pay duty without the presence of such an intention is not sufficient. This apart, it has been repeatedly held that when a government company is involved there will be a rebuttable presumption regarding non-existence of any of the ingredients mentioned in the proviso to section 73(1) of the Finance Act. 21. This issue was examined by a Division Bench of the Tribunal in Krishi Upaj Mandi Samiti vs. Commissioner of C. Ex. S.T., Jaipur-I II [2017 (4) G.S.T.L. 346 (Tri.- Del.)] . It was held that since Krishi Upaj Mandi Samiti was a government organisation and its functions were regulated by the Act and the Rules made thereunder, there will be a rebuttable presumption regarding non-existence of any of the ingredients mentioned in the proviso to section 73(1) of the Finance Act and the relevant paragraph is reproduced below: 16. The appellants also contested the demand wherever issued invoking extended period of time. Proviso to Section 73(1) can be invoked only, where the Service Tax has not been paid or levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under two different heads of categories of service for one single activity. 25. As noticed above, the show cause notice proposed the demand of service tax on the fees received from banks/financial institutions for registration of transactions under the category of BSS and also OIDARS . The impugned order has also confirmed the demand of service tax under both the categories. 26. A Division Bench of the Tribunal in Ess Gee Real Estate Developers Pvt. Ltd. vs. Commr. of C. Ex., Jaipur [2020 (34) G.S.T.L. 486 (Tri.-Del.)] , after placing reliance upon the decision of the Tribunal in CMS India Operation and Maintenance Company Pvt. Ltd. vs. Commissioner of Central Excise, Puducherry [ 2017 TIOL- 1491- CESTAT-MAD ] , observed as follows: 23. xxxxxxxxxxxx. It is very difficult to really cull out from the show cause notice as to which particular category of service was intended to be taxed. The show cause notice should have clearly indicated whether the service of real estate agent or site formation was leviable to tax, for this is the requirement of section 65A of the Act. This confusion is maintained in the impugned order. 27. The Civil Appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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