TMI Blog2024 (4) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, what is seen is that the audit was conducted between June 17, 2011 to June 22, 2011 and the show cause notice refers to this audit only. The notice, therefore, should have been issued within one year from the relevant date and there is no good reason as to why the Central Excise Officer should have waited till March 19, 2015 to issue the show cause notice. The extended period of limitation, for this reason alone, could not have been invoked. Levy of service tax or exemption from tax - Erection, Commissioning or Installation service - claim of the appellant is that the services provided by them to CPWD and Airport authority are in the nature of works contract as per their agreement and are exempted from payment of service tax - HELD THAT:- The stand of the department that appellant is liable to pay service tax under the category of Erection, Commissioning or installation service is also not tenable in view of the decisions of the Tribunal in the case of GOA FRIENDS ENGINEERING ELECTRICALS PVT LTD VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE, PANAJI [ 2021 (9) TMI 510 - CESTAT MUMBAI] wherein the Tribunal has held In the facts and circumstances narrated supra, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as BSF, CRPF, ITF etc., in term of agreement so entered into with its customers and the appellants were responsible to hand over the functional systems to its customers. 3. It has been further alleged that the appellant used to quote the price in form of consolidate consideration for the entire contract/work without bifurcating into two parts namely; supply of goods and for services rendered. The works contract so executed was indivisible and could not be vivisected into sale of goods and rendering of services for levy of service tax. The appellant was also registered with the Sales Tax Department and was filing Sales Tax returns regularly. On 26.06.2008, an audit team visited the appellant s premises to conduct audit it s account and after conducting the audit for two days the audit team prepared the Audit Objection Memo and presented the same before the Assistant Commissioner Audit, who appended his dated signature on 23.08.2008 as token of its acceptance. 4. Thereafter, a show cause notice dated 24.10.2010 was issued by the Ld. Commissioner on the basis of audit objections of which the appellant filed reply. After following the due process, the Ld. Commissioner vide order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and maintenance undertaken by the appellant. He also referred to the decision of the Supreme Court in the case of Commissioner of Customs and Central Excise, Vadodara- I v. Jyoti Ltd. [2022] 141 taxman.com 437 (SC). 9. Ld. Counsel further submits that the service tax prior to 01.06.2007 are exempted in view of the decision of the Supreme Court in the case of Commissioner, Central Excise Customs, Kerala Vs. Larsen Toubro Ltd. (2015) (SC), wherein, it was held that a works contract is a separate species of contract distinct from contracts from services simplicitor recognized by the world of Commerce and law as such and has to be taxed separately as such. It was further observed by the Hon ble Apex Court that the Assessee s argument that there is no charge of tax of works contracts in the Finance Act, 1994 is correct. Therefore, while introducing the concept of service tax on indivisible works contracts in 2007 various exclusions are also made such as works contracts in respect of roads, airports, airways transport, bridges, tunnel and dams. These infrastructure projects have been excluded and continue to be excluded presumable because they are conceived in the national interest. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that they have provided the services to the government of India through CPWD and airport and it is not liable to service tax. 12. On the other hand, Ld. AR reiterated the findings of the impugned order and submitted that the appellant did not disclose all the facts to the department which was detected during the course of audit and therefore, the appellant has suppressed the facts with intend to evade the service tax and therefore the department has rightly invoked the extended period of limitation. 13. We have considered the submissions of both the parties and perused the material on record as well as the decisions relied upon by both the sides. 14. First of all, we will deal with the invocation of extended period of limitation because as per the Ld. Counsel for the appellant entire demand is barred by limitation as the demand has been raised only on the basis of audit objections without any further investigation by the department and without satisfying the requirement for invoking the extended period of limitation under Sub-section 4 of Section 11A of the Central Excise Act, 1944. 15. To appreciate the submissions of the Ld. Counsel, it would be appropriate to reproduce the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. (emphasis supplied) It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty. This decision of the Supreme Court in Pushpam Pharmaceuticals was followed by the Supreme Court in Anand Nishikawa Co. Ltd. vs. Commissioner of Central Excise, Meerut7 and the relevant paragraph is as follows:- 27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceuticals Co. v. CCE we find that suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is settled law that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made hereinabove that there was no deliberate intention on the part of the appellant not to disclose the correct informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans failure to disclose full information with intention to evade payment of duty and the observations are as follows:- 10. 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 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with knowledge that the statement was not correct. (emphasis supplied). 16. We also find that identical issue of invoking the extended period of limitation based on audit objections was considered by the co-ordinate Bench in the case of Delta Power Solutions India (P.) Ltd. cited (Supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are exempted from payment of service tax. Besides this, the appellant s stand is also that prior to 01.06.2007, service tax on works contract was not leviable to service tax as per the decision of the Hon ble Apex Court in the case of Commissioner, Central Excise Customs, Kerala Vs. Larsen Toubro Ltd. cited (Supra), in this regard we find that the demand of service tax in respect of service rendered to airport is exempted from levy of service tax by virtue of definition of works contract under Section 65 (105) (zzzza) of chapter V of Finance Act, 1994 which is reproduced here in below: Taxable Service means any service provided or to be provided to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels, and dams. Explanation. For the purposes of this sub-clause, works contract means a contract wherein, (1) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out, (a) erection, commissioning or installation of plant, machinery, equipment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order and allow the appeal with consequential relief. 20. Further, we also find that the services rendered by the appellant to CPWD, Airport falling under the category of works contract as per their agreement and it cannot be taxed in any other category as held by the Tribunal in the case of Shree Mohangarh Construction Co. Vs. Commissioner of Central Excise ST, Rajasthan cited (Supra) wherein, it has been held that works contract service could not be equated either with a contract for sale of goods or a contract for supply of services simplicitor and service tax can only be demanded works contract service after introduction of a charge on works contract service and not under any other head either before introduction of service or thereafter. Thus, in the instant case even if assessee had not fulfilled conditions required under Works Contract Composition Scheme, there was no case for department to charge service tax on service provided by assessee under any other head. 21. In view of the discussion above, we are of the considered view that the impugned order is not sustainable on merit as well as limitation. Hence, we set aside the same by allowing the appeal of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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