2022 (5) TMI 1247 - HC - Central Excise

Condonation of delay in filing appeal - Amount billed gross shown in ST-3 return arising suppression of material facts - extended period of limitation - HELD THAT - The respondent/assessee is a cooperative society and was issued with show cause notice alleging contravention of the provisions of Sections 66, 67 and 68 of the Finance Act, 1994 read with Rules 5 and 6 of the Service Tax Rules, 1994 on the ground that they have failed to pay service tax on the amount indicated on the value of the taxable services under the category of Man Power Recruitment or Supply Agency Service classifiable under sub Section 105(k) of Section 65 of the Finance Act. The show cause notice was not issued solely at the instance of the department but the department was directed to issue the notice on account of audit objection which has been raised consequentially. The show cause notice was otherwise barred by limitation but for invoking the extended period of limitation. Further, the assessee contended that the Adjudicating Authority has adjudicated the balance-sheet figures in order to raise the disputed demand wherein it has adopted the figure of total service plus service charge for raising the demand and not with the basic value of service rendered. The assessee relied upon various decisions of the Hon ble Supreme Court in support of their contention which have been noted by the learned Tribunal in paragraph 5 of the impugned order. Furthermore, the assessee contended that the disputed period is from 2006-07 to December, 2008 and the assessee having not been put on any notice earlier alleging any suppression, the question of invoking the extended period of limitation would not arise. The Tribunal heard the revenue on the above submissions made by the assessee. The Tribunal on facts held that the extended period of limitation is not available to the Revenue and the demand is required to be limited to the normal period only. With the findings, the matter has been remanded to the Adjudicating Authority to re-determine the duty liability in terms of the directions issued by the Tribunal - there is no question of law much less substantial question of law arising for consideration in this appeal. The appeal is dismissed.

Summary

Issues:
1. Condonation of delay in filing the appeal under section 35G of the Central Excise Act, 1944.
2. Substantial questions of law raised in appeal under section 34G of the Central Excise Act, 1944.

Analysis:
1. Condonation of Delay:
The High Court considered a delay of 970 days in filing the appeal under section 35G of the Central Excise Act, 1944. Despite opposition from the respondent's advocate, the Court exercised discretion to condone the delay, emphasizing the need to consider substantial questions of law for justice. The delay was ultimately allowed to be condoned, highlighting the importance of upholding justice in the case at hand.

2. Substantial Questions of Law:
The appeal under section 34G of the Central Excise Act, 1944 was directed against an order passed by the Customs, Excise and Service Tax Appellate Tribunal. The revenue raised two substantial questions of law for consideration. Firstly, questioning the acceptance of the assesses' contentions without sufficient evidence, alleging suppression of material facts. Secondly, disputing the availability of the extended period of limitation to the revenue in the case. The respondent, a cooperative society, was issued a show cause notice for alleged contravention of service tax provisions. The Tribunal found in favor of the assessee, noting their compliance with filing returns and lack of prior notices on alleged suppression. The Tribunal remanded the matter to re-determine duty liability, concluding that no substantial question of law arose for consideration in the appeal. Consequently, the appeal was dismissed, and the application for stay was closed.

In summary, the judgment involved the condonation of delay in filing the appeal under section 35G and the consideration of substantial questions of law in an appeal under section 34G of the Central Excise Act, 1944. The Court's decision to condone the delay highlighted the importance of justice, while the detailed analysis of the substantial questions of law focused on the compliance of the respondent, a cooperative society, with service tax provisions. The Tribunal's findings favored the assessee, leading to the dismissal of the appeal due to the absence of any substantial question of law.