TMI Blog2024 (4) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... is also a well settled legal position that suppression of facts does not mean mere omission but the suppression with an intent to evade. Admittedly, the Commissioner invoked extended period of limitation and imposed penalties under section 78 under the wrong understanding of law that the intent to evade is not necessary to invoke extended period of limitation and to impose penalty under section 78. Therefore, the entire demand beyond the normal period of limitation of 18 months during the relevant period cannot be sustained and needs to be set aside regardless of the merits of the case - the penalty imposed under section 78 also needs to be set aside. Demand of service tax on the services provided to M/s Indra Systems India Pvt. Ltd. and M/s Poonam Hasija Neha Hasija was dropped by the Commissioner giving an abatement towards the cost of the material from the gross receipts - HELD THAT:- The Commissioner recorded that there were three purchase orders and after examining the purchase orders came to the conclusion that the appellant had correctly claimed abatement of 60% towards the value of the goods and promptly discharged the service tax liability. Therefore, he dropped the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the taxable service. Unless all these three elements are established, no service tax can be charged. Merely because any amount has been received in the accounts of any person, service tax cannot be charged unless the amounts so received were a consideration for providing taxable services. The burden of proving any fact rests on the person whose case fails, if no evidence is presented by either side. In the case of SCNs, if no evidence is presented by either side, the allegations in the SCN fail and, therefore, it is for the Revenue to provide evidence that taxable services were rendered and consideration has been received. There is nothing in the appeal of the Revenue to establish that the amount received were not for sale of goods, but were received for providing the taxable services. In view of the above, the appeal by the Revenue on this count also needs to be rejected. The matter is remanded to the Commissioner for the limited purpose of calculation of the amount of service tax within the normal period - Appeal disposed off. - HON BLE MR. JUSTICE DILIP GUPTA , PRESIDENT And HON BLE MR. P. V. SUBBA RAO , MEMBER ( TECHNICAL ) Shri Rajeev Kapoor , Authorized Representative f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion ; (c) willful mis-statement; (d) suppression of fact or (e) violation of the Acts or Rules made with intent to evade payment of service tax. The SCN shows that the appellant was registered with the Service Tax Department, but on receiving information that the appellant had rendered some services and had not paid service tax correctly, the ST-3 returns, annual financial reports and details of work done, payments/construction material received free of cost, etc. were sought from the assessee, analyzed and the SCN was issued. The reasons for invoking extended period of limitation given in the SCN was as follows :- 21. Whereas it has discussed in length herein above, it was obligatory on the part of the noticee to comply with the provisions of the said act and file the necessary returns, in the form of ST-3, with respect to correct declaration of their actual incomes whether taxable or exempted, as per the provisions of Finance Act, 1994 and Service Tax Rules, which till date the noticee had not followed. Further, it appears that the noticee suppressed the real taxable value on which the service tax should have been paid by them in the case of M/s IOCL, and further, willfully mis- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the five elements essential for invoking extended period of limitation is established. It is also a well settled legal position that suppression of facts does not mean mere omission but the suppression with an intent to evade. Admittedly, the Commissioner invoked extended period of limitation and imposed penalties under section 78 under the wrong understanding of law that the intent to evade is not necessary to invoke extended period of limitation and to impose penalty under section 78. Therefore, the entire demand beyond the normal period of limitation of 18 months during the relevant period cannot be sustained and needs to be set aside regardless of the merits of the case. 11. For the same reason, the penalty imposed under section 78 also needs to be set aside. 12. We now proceed to examine the demands on merits. There are, in all demands on seven grounds as follows :- (a) Service tax of Rs. 17,15,134/- on renting of immovable property service which has been dropped by the Commissioner and there is no appeal by either side on this ground. Thus, the issue has attained finality. (b) Service tax of Rs. 1,28,46,824/- on the gross receipts in respect of the contract for supply, er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial and value portion were not separable, the assessee had taken abatement of 60% under the Service Tax Valuation Rules. The reasoning given by the adjudicating authority in the impugned order is, according to the Revenue, inconsistent with the calculations in the SCN because the SCN alleged that the entire amount in case of M/s Indra Systems was on account of pure service contract. 15. We find that in paragraph A.3 of the impugned order, the Commissioner recorded that there were three purchase orders and after examining the purchase orders came to the conclusion that the appellant had correctly claimed abatement of 60% towards the value of the goods and promptly discharged the service tax liability. Therefore, he dropped the demand. Revenue is only aggrieved by the fact that his findings were not the same as the allegations in the SCN. The Commissioner was correct in considering both the allegations in the SCN and also the submissions made by the assessee in defence and arriving at a conclusion. Nothing is in the appeal by the Revenue to substantiate that the Commissioner had either not read the contracts or read them wrongly. We, therefore, find no reason to interfere with the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner holding that this income was entirely from sales receipts. Revenue is aggrieved by this finding on the ground that this observation was based solely on the claim of the assessee without any certification by an independent Chartered Accountant. According to the Revenue this finding of the Commissioner is erroneous. However, in Revenue s appeal, we find no document whatsoever to support its contention that these receipts were on account of rendering taxable services. If the Commissioner found, based on the balance sheets and the records that these receipts were towards sale of goods, his finding deserves to be accepted in the absence of any contrary evidence. It needs to be pointed out that for service tax to be levied three things are essential namely : (a) the service provider must provide a service to the service recipient; (b) the service so provided must be a taxable service during the relevant period; and (c) a consideration must have been received for providing the taxable service. Unless all these three elements are established, no service tax can be charged. Merely because any amount has been received in the accounts of any person, service tax cannot be charged unless t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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