TMI Blog2024 (4) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... as for non commercial purposes. The Commissioner found that NPL was engaged in activities like measurement, calibration, testing of devices/instruments and equipments and scientific and technical consultancy services on payment basis. It was also registered with the service tax department for providing scientific and technical consultancy services. The Commissioner, therefore, found as a fact that NPL was a commercial concern/organization established by Council of Scientific and Industrial Research. Thus, the construction services provided by the appellant to NPL upto 30.06.2012 qualified as taxable service under CICS - the Commissioner held that NPL was not set up by an Act of Parliament or a State Legislature and, therefore, was not a governmental authority under the Exemption Notification. Whether the demand raised on the appellant for period prior to merger (for the amount received by M/s. N.N. Company, a proprietorship firm) can be excluded from computation of tax liability? - HELD THAT:- The Commissioner found that the amount of rent received from immovable property prior to merger of the appellant with M/s. N.N. and Company could not be assessed in the hands of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er implies making of an incorrect statement with the knowledge that the statement was not correct - The only relief that can be granted to the appellant is regarding the extended period of limitation under the proviso to section 73(1) of the Finance Act in so far as it relates to the first show cause notice dated 21.04.2014. The matter is, therefore, remitted to the assessing officer only to calculate the demand covered by the first show cause notice which falls in the extended period of limitation so that this demand can be excluded with consequential penalty from the total demand confirmed by the Commissioner. The rest of the demand confirmed by the Commissioner in the impugned order dated 28.02.2017 is confirmed - appeal allowed by way of remand. - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Rishabh Jain, Advocate for the Appellant Shri Manoj Kumar, Authorised Representative for the Department ORDER M/s. N. N. Buildcon Pvt. Ltd. [the appellant] has sought quashing of the order dated 28.02.2017 passed by the Commissioner of Service Tax, Delhi-I [the Commissioner] adjudicating three show cause notices dated 21.04.2014, 20.04.2015 and 20.01.2016. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of limitation was not invoked. 4. The appellant filed a reply to the show cause notices denying the allegations made therein. The appellant claimed that it was a governmental authority and, therefore, was entitled to claim the benefit of the Exemption Notification. In respect to the first show cause notice, the appellant also claimed that the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act could not have been invoked. The appellant also claimed that the activity undertaken by the appellant did not fall under the category of CICS. 5. The Commissioner did not accept the contentions of the appellant and confirmed the demand. The Commissioner framed the following four issues to be decided: (i) Whether NPL, an institute under CSIR and an authonomous body registered under the Societies Act, 1860, can be considered as a commercial concern/government authority; (ii) Whether the demand raised on the appellant for period prior to merger (for the amount received by M/s. N.N. Company, a proprietorship firm) can be excluded from computation of tax liability; (iii) Whether value of goods transacted on payment of VAT needs to be excluded and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods transacted on payment of VAT needs to be excluded and benefit of exemption notification was to be given to the appellant, the Commissioner recorded the following findings: 6.4.3. However, it is found that all the stated documents have not been furnished by the assessee, except for the sample copies of invoices for the period covered under the three SCNs. Further, they had also produced original copy of the agreement for construction of the metrology block and perusal of the same indicates that the contract was including the value of goods as well. However, I observe that benefit of the said Notification No. 12/2003-ST is available subject to condition that there is documentary proof specifically indicating the value of the goods and materials sold by the service provider to the service recipient. In this regard I find that they have not produced documentary evidence regarding purchase of the materials for the impugned NPL project and VAT etc., have been discharged by them at both the purchase and sale ends. As they failed to produce such records, the benefit of Notification No. 12/2003 cannot be extended to them and consequently the decisions cited by them are not helpful t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comply with the obligations cast upon it by the Legislature. There is no requirement that there should be suppression with intention to evade. Mere suppression is adequate for the purpose of the recovery of tax for the extended period as well as for imposing penalty. In any case, the assessee, in this case, has willfully contravened the provisions of the Finance Act, 1994 and Service Tax Rules, 1994. 6.5.4 Facts narrated above go to show that the assessee suppressed the facts, by non- compliance of the obligations cast upon them by the statutory provisions. The suppression of the facts clearly gives the conclusion that the assessee had intention to evade the tax. It is imperative to mention here that suppression with intent to evade payment of tax need not require to be proved with mathematical precision in the regime of self-assessment, where assessment has to be made by the assessee himself without any control of the Department. Therefore, for the purpose of invoking the extended period, the intent to suppress material facts by the assessee clearly stands established. 6.5.5 I hold that the assessee had contravened the provisions as stated in the impugned SCN. Since, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied towards the promotion of objects as set out in Memorandum of Association, Rules and Regulations and Bye Laws of CSIR; (iv) Alternatively, even prior to 01.07.2012, construction activity for NPL undertaken by the appellant would not fall within the definition of CICS and consequently it would not be exigible to tax; (v) The returns were filed by the appellant during the course of the years. The extended period of limitation, therefore, could not have been invoked. The show cause notice dated 20.04.2014 issued for the period 2010-11 and 2011-12 is patently barred by limitation; (vi) Mere non-payment of tax would not invite invocation of extended period of limitation; (vii) In the absence of any allegation of willful suppression or misrepresentation of facts with intent to evade payment of tax. The extended period of limitation could not be invoked, more particularly when the appellant held a bonafide belief that the activity undertaken by it is exempted under Exemption Notification; (viii) CSIR is a State within the meaning of Article 12 of the Constitution; and (ix) When the extended period of limitation is not invokable, penalty under section 78 is not warranted. Even otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II, Section 3, Sub-section (i) vide number G.S.R. 210(E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:- 1-11 xxxxxxxxxxx. 12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession. 16. A governmental authority has been defined under clause 2(s) as follows: 2(s) governmental authority means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution. 17. NPL was not constituted by an Act of Parliament or a State Legislature and it is incor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely willful suppression of facts with an intent to evade payment of service tax do not exist and, therefore, the extended period of limitation could not have been invoked in respect of the first show cause notice. 22. There is force in the submission advanced by the learned counsel for the appellant. 23. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) E.L.T. 161 (S.C.)] held: 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 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. On the contrary, the statements of the officials of MTNL, relied upon by the respondents, clearly indicate that they were under the belief that the receipt of compensation/financial support from the Government of India was not taxable. Absent any intention to evade tax, which may be evident from any material on record or from the conduct of an assessee, the extended period of limitation under the proviso to Section 73(1) of the Act is not applicable. The facts of the present case indicate that MTNL had made the receipt of compensation public by reflecting it in its final accounts as income. As stated above, merely because MTNL had not declared the receipt of compensation as payment for taxable service does not establish that it had willfully suppressed any material fact. MTNL s contention that the receipt is not taxable under the Act is a substantial one. No intent to evade tax can be inferred by non-disclosure of the receipt in the service tax return. (emphasis supplied) 26. In view of the aforesaid decisions of the Supreme Court and High Court, the finding recorded by the Commissioner that even in the absence of intent to evade payment of service tax, the extended period of li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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