TMI Blog2023 (5) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... .2009 is not within the normal period but the period from 01.07.2009 to 30.03.2010 is within the normal period. In regard to the services said to have been performed by a management or business consultant, the entire period is covered by the extended period of limitation under the proviso to section 73(1) of the Finance Act. The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter 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 - There is substance in the contention advanced on behalf of the appellant that mere suppression of fact is not enough as it has also to be conclusively established that suppression was wilful with an intent to evade payment of service tax. In Pushpam Pharmaceuticals Company [ 1995 (3) TMI 100 - SUPREME COURT ] , the Supreme Court examined whether the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be performed by the appellant would fall under construction services . It was imperative for the appellant to have led evidence to substantiate that any construction work was required to be performed by the appellant under the agreement - There is, therefore, no error in the finding recorded by the Commissioner that the appellant did not perform construction services and the work performed by the appellant would appropriately fall under the architect services. The order passed by the Commissioner confirming the demand of service tax for the extended period of limitation in so far as the architect services and management or business consultant services are concerned is set aside - the demand confirmed for the normal period for architect services as also the demand for CENVAT credit is upheld - Appeal allowed in part. - MR. DILIP GUPTA, PRESIDENT AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Dr. Prabhat Kumar, Consultant and Shri Karan Kanwal, Advocate for the Appellant. Shri Harshvardhan, Authorized Representative for the Department ORDER The order dated 31.03.2014 passed by the Commissioner of Service Tax, Commissionerate, New Delhi [t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of payment for the construction activities undertaken. However, the show cause notice has alleged that the Annual Accounts of the noticee did not reflect expenditure on account of purchase of construction materials and payment received on account of construction services. In case no amount is found to has been incurred towards purchase of construction materials, it cannot be held that the services rendered were construction services. ***** I find that the limbs of the definition of Architect Service are satisfied in the present case viz. provision of service, which the noticee have rendered like Architectural, Engineering Design and Drawing Work, Consultancy Services for construction of Medical College and Hospitals where the scope of work was confined to Architecture, preparation of detailed drawing and design including structural design calculation for proper execution of works and visit to project site periodically as mutually agreed to offer interpretation of drawing/specification, supervision of the project etc. ***** 16.2 The show cause notice has further proposed demand of service tax amounting to Rs. 5,20,612/- on the ground that the noticee had entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with Section 65(105)(r) of the Finance Act, 1994 under the category of Management or Business Consultants Services which covers in its ambit any services provided to any person by a management or business consultant in connection with the management of any organization or business. In any manner, which I find squarely cover the activities rendered by the noticee detailed above. (emphasis supplied) 4. Shri Prabhat Kumar, learned counsel for the appellant assisted by Shri Karan Kanwal, submitted that not only had the Commissioner committed an illegality in holding that the services provided by the appellant were not towards construction and were services provided either by an architect or by management or business consultant, but even otherwise the extended period of limitation could not have been invoked in the facts and circumstance of the case. Learned counsel, however, did not contest the order passed by the Commissioner to the extent it confirmed the demand of CENVAT credit amounting to Rs. 12,360/-. 5. Shri Harshvardhan, learned authorized representative appearing for the Department submitted that the order passed by the Commissioner does not suffer from any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 One year from the relevant date 25.01.2009 Extended Period 01.01.2009 to 30.06.2009 One year from the relevant date 25.07.2009 Extended Period 01.07.2009 to 31.12.2009 One year from the relevant date 25.01.2010 Normal Period 01.01.2010 to 30.03.2010 One year from the relevant date 25.07.2010 Normal Period Demand on Services performed under Management or Business Consultancy Services Period Normal Period of Limitation as per Section 73 Whether notice issued within normal or extended period 01.03.2007 to 30.06.2007 One year from the relevant date 25.07.2007 Extended Period 01.07.2007 to 31.12.2007 One year from the relevant date 25.01.2008 Extended Period 01.01.2008 to 30.06.2008 One year from the relevant date 25.07.2008 Extended Period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 15. ****** However, in order to further examine the issue of non-payment of service tax, the department not only made investigations with the Registrar, Guru Ghasidas University, Bilaspur, Chhattisgarh but also made correspondence with AGCR submitting their point of view. This is the reason that no show cause notice was issued to the noticee in the year 2006. However, the matter attained further clarity from Department's point of view regarding applicability of service tax on the services rendered by the noticee when the records of the noticee were audited by the Service Tax Audit Branch where the records of the noticee were examined in detail and the present show cause notice is the outcome of the examination conducted by the Service Tax Audit Branch. ********** 15.3 Thus, it is possible to invoke extended period in the case of Service Tax even in situation where there is no intent to evade payment of tax. Even if it is presumed that the Noticee has not contravened any provisions with intent to evade payment of Service Tax, yet Noticee has failed to comply with the obligations cast upon it by the Legislature. There is no requirement that there should be sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner as aforesaid. In support of his plea, learned counsel for the petitioner seeks to rely upon certain audit memos issued inter se the Department including one dated 18.01.2006 as reflected in the order dated 11.09.2006 (passed by the Assistant Commissioner (Service Tax) and the queries posed to the client of the petitioner who has paid the amount in respect of which service tax is sought to be recovered. On hearing learned counsel for the parties, we are of the considered view that it is appropriate that the matter should first be examined by the Service Tax Commissioner before this court goes into the question. Since the show cause notice is composite both for the aforesaid period and the current period, it would be appropriate for the Service Tax Commissioner to first examine the issue as to how for the aforesaid period is the matter sought to be opened. Thus, that issue would be determined first. The petitioner may file response to the show cause notice within a period 10 days from today whereafter a next date will be fixed for hearing before the Service Tax Commissioner and an order will first be passed on the aforesaid aspect. The petitioner has the liberty to challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose 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 be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made thereunder; 19. The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter 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. 20. Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 11AA and a penalty equivalent to the duty specified in the notice. 24. In Pushpam Pharmaceuticals Company , 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. The observations are as follows; 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 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e done would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act. (emphasis supplied) 26. These two decisions in Pushpam Pharmaceuticals and Anand Nishikawa Company Ltd. were followed by the Supreme Court in the subsequent decision in Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (SC ) ] and the observation are: 18. We are in complete agreement with the principal enunciated in the above decisions, in light of the proviso to section 11A of the Central Excise Act, 1944. 27. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) E.L.T. 177 (SC)] also held: 10. The ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gas Exploration Services Ltd. vs. C. S. T., New Delhi [2017 (47) STR 200 (Tri-Del.)] , wherein the Tribunal after making reference to the decision of the Supreme Court in Cosmic Dye Chemical vs. CCE, Bombay [1995 (75) E.L.T. 721 (SC)] , observed that there should be an intent to evade payment of service tax if the extended period of limitation has to be invoked. The observations are as follows: 8. Regarding the demand for extended period, we find the reason given by the Original Authority is not legally sustainable. In fact he recorded that in terms of proviso to Section 73 of Finance Act, 1994, the intention to evade payment of duty is not required to invoke extended period or to impose penalty. We find that for invoking extended period as well as for imposing penalty under Section 78, the legal provisions are identical. The words used like fraud, collusion, willful mis-statement, suppression of fact or contravention of any provisions of Chapter V of Finance Act, 1994 or of the Rules made thereunder with intent to evade the payment of Service Tax, will show that the ingredient of mala fide is a pre-requisite to invoke both the legal provisions (proviso to Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... performed by the appellant would fall under construction services as there is nothing in the agreement nor anything could be pointed out by the learned counsel appearing for the appellant that the nature of work required to be performed by the appellant would fall under construction services . It was imperative for the appellant to have led evidence to substantiate that any construction work was required to be performed by the appellant under the agreement. 34. There is, therefore, no error in the finding recorded by the Commissioner that the appellant did not perform construction services and the work performed by the appellant would appropriately fall under the architect services. 35. The appellant has not contested the order passed by the Commissioner to the extent it has confirmed the demand of CENVAT credit amounting to Rs. 12,360/-. 36. Thus, for the reasons stated above, the order passed by the Commissioner confirming the demand of service tax for the extended period of limitation in so far as the architect services and management or business consultant services are concerned is set aside. However, the demand confirmed for the normal period for architect se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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