TMI Blog2023 (7) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... ort have been raised or no mistakes were pointed out by the Department on the basis of the scrutiny of the Returns of the respondent. Under the circumstances, it is not open to the Department to allege that there has been wilful suppression of material facts on the part of the respondent. Tribunal has gone into the very same issue, in respect of the respondent s office in Delhi, in respect of show-cause notice issued on similar lines, and vide in case [ 2016 (3) TMI 783 - CESTAT NEW DELHI] have upheld the order of the Adjudicating Authority who dropped the proceedings, holding that no service tax is leviable on the works contract during the period prior to 1.6.2007 and remand the case for de novo adjudication only in respect of such contracts which were pure sweat contract, if any. The issue is loaded in favour of the respondents both on limitation and merits. In the instant case, the issue of merit is not under consideration. Extended period of Limitation - HELD THAT:- Learned Adjudicating Authority has correctly found that there is no suppression and hence, the provisions of Section 73 of Finance Act, 1994 are not attracted to invoke extended period - the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemselves assesses the tax liability, pays the same and files the returns; it is incumbent upon the appellants to check if they have fulfilled the conditions laid down in the notifications before availing the abatement; mere filing of ST-3 Returns does not mean that the appellants have disclosed the true gross value. He submits that the periodical scrutiny of ST-3 Returns by the Department is limited to figures declared by the assessee and in any manner, it will not make Department aware of the true gross value; therefore, the Adjudicating Authority has clearly erred in holding that the appellants have suppressed any material fact/ figure. 3. Learned AR submits that the Hon ble Supreme Court in the case of Dilip N. Shroff- 2007 (219) ELT 15 (SC) has examined the word Conceal , which according to law lexicon means to hide or keep secret ; the word Conceal is Con+celare , which implies to hide; as the respondents have not disclosed the material facts before the Department and the same was noticed only during the audit of records, there is clear suppression of fact as held by the Hon ble Supreme Court in the case of Mallur Siddeswara Spinning Mills Private Limited- 2004 (166) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Rule also allows the officer to call for any record maintained by the assessee for accounting of transactions, the trial balance or its equivalent, and the Income Tax Audit Report maintained under Section 44AB of the Income Tax Act. In other words, the Rule permits the officer to examine financial records for scrutinizing the return to determine the correctness of the assessments made. In pursuance of this, the Board has also issued guidelines vide Letter F.No.137/27/2007 CX.4, dated 08.02.2007, which makes it mandatory to scrutinize returns on a regular basis. Details of the Board s guidelines on returns scrutiny are discussed in Chapter 2 of this Manual . 6. He further submits that under Chapter 2: Policy Guidelines for Returns Scrutiny, it is mentioned at Para 2.1. that the designated officers must seek answers to certain key questions while conducting the preliminary scrutiny of Service Tax Returns. The questions inter alia include the following: --- 4. Is the applicable rate of tax correctly calculated? 5. Are the exemption claims (if any) admissible? 7. He further submits that in the Annexe-2.1: Format for Preliminary Scrutiny of ST-3 Returns is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice receiver has not supplied any plant, machinery or equipment. However, learned Adjudicating Authority holds that the issue is time barred and observes as follows: 3.12. The Noticees have stated that the demands issued to them under both the show cause notices are time barred. They have claimed that all the facts regarding assessment of service tax were in the knowledge of the department. The Noticees had duly filed the ST-3 returns on which the fact of availing abatement from the gross value had been explicitly mentioned and they were depositing the service tax on the value of services they were liable to pay service tax. They have submitted that invoking of extended period of limitation was not warranted by law and the proposed invocation was unjust and unreasonable. The demands were barred by limitation of time. 3.13 The ST-3 returns filed by the Noticees have been obtained and examined. The returns for the periods from October-2005 to March-2006, April-2006 to September- 2006, October-2006 to March-2007, April-2007 to September-2007, October 2007- March-2008. April-2008- September 2008 and October-2008 to March-2009 could be examined and it was informed by the Ran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riate action for recovery of the service tax short paid. By failing to take the appropriate action on the basis of information made available by the Noticees it is not open to the revenue authorities to charge the Noticees with suppression of facts. The information made available by the Notices to the jurisdictional revenue authorities was in the prescribed format and whatever information was required to be given in the prescribed format was provided by the Noticees. When the facts were in the knowledge of the jurisdictional revenue authorities the Noticees cannot be held guilty of suppression of facts. A mere allegation of suppression of facts without disclosing what fact was required to be disclosed and was not so disclosed is not sufficient to prove the suppression of fact. The Noticees were under obligation to disclose only those facts which were required to be disclosed under the law. There is nothing in the show cause notices which shows that there was a legal requirement for Noticees to disclose certain facts and the Noticees had failed to disclose those facts. 3.15 Under the proviso to Section 73 (1) of the Act, the extended period of limitation can be invoked only wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works contract was not liable to service tax prior to 1.6.2007. It is also settled by the CESTAT judgment in the case of Bhayana Builders (P) Ltd. (supra) that in the case of free supply of some goods by the service recipient abatement under Notification like 15/2004-ST is admissible even if the value of such goods is not included in the assessable value. Ld. A.R. has strenuously argued that in the light of Supreme Court judgment in the case of Larsen Toubro Ltd. an exercise has to be conducted to compute the service tax liability under ECIS in respect of such contracts which were pure sweat contracts and did not involve any supply of goods and therefore did not fall in the category of works contracts. 4. In the light of the foregoing, we hold that no service tax is leviable on the works contract during the period prior to 1.6.2007 and remand the case for de novo adjudication only in respect of such contracts which were pure sweat contract, if any. 12. In view of the above, we find that the issue is loaded in favour of the respondents both on limitation and merits. In the instant case before us, the issue of merit is not under consideration. As far as limitation is co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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