2011 (7) TMI 559 - AT - Central Excise

Duty evasion - C.B.E.&C. Letter F.No.137/167/2006-CX-4, dated 3.10.07 - Revenue contended that as per para 4 of the Order-in-Original that the adjudicating authority considered the issue of suppression of the facts and found that the plea of no knowledge or bonafidely did not appear to be sustainable as they themselves have received services from multi system operator on which they had earlier claimed the service tax - Held that - Considering argument of the assessee that the delay was due to the fact that it was a new provision and unawareness of law and financial hardship to which the office of the assessee was not fully acquainted with and the delay was only bonafide - As decided in Pushpam Pharmaceutical Co. V. Collector of Central Excise, Bombay 1995 (3) TMI 100 - SUPREME COURT OF INDIA 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, by one to do what he is settled law that mere failure to declare does not amount to willful suppression. Also see C.B.E.&C. letter No. F.No.137/167/2006-CX-4, dated 3.10.07 is also relevant. Decided in favour of assessee.

Summary

Issues:
Appeal against Order-in-Appeal confirming a demand of Rs.5,503 based on service tax incidence, invocation of suppression of facts provisions for extended period, relevance of C.B.E.&C. letter F.No.137/167/2006-CX-4, dated 3.10.07.

Analysis:
The appeal was filed by M/s. Parshwanath World Vision against the Order-in-Appeal confirming a demand of Rs.5,503. The appellant argued through their Chartered Accountant, Shri Vipul Khandhar, that they were not aware of the service tax incidence on them. The appellant relied on the C.B.E.&C. Letter F.No.137/167/2006-CX-4, dated 3.10.07. It was contended that invoking the provisions of suppression of facts for an extended period was not justified.

Shri R. Nagar, representing the Revenue, argued that the adjudicating authority had considered the issue of suppression of facts and found the plea of no knowledge or bonafide to be unsustainable. The Revenue contended that the delay in compliance was due to the appellant's lack of familiarity with the law and financial hardship. Reference was made to the Hon'ble Supreme Court's decision in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl*3) SCC 462] to emphasize that suppression of facts entails deliberate non-disclosure to evade duty payment when both parties are aware of the facts.

The C.B.E.&C. letter No. F.No.137/167/2006-CX-4, dated 3.10.07 was found to be relevant in the case. The letter clarified that the conclusion of proceedings under sub-sections 1A & 3 of Section 73 implies the conclusion of entire proceedings under the Finance Act. Considering the arguments and findings, the appeal filed by M/s. Parshwanath World Vision was allowed, indicating a favorable decision for the appellant.