2022 (11) TMI 498 - HC - Service Tax

Redetermination of Service Tax due within period of limitation - incorrect filing of required periodic returns and especially when the departmental officers were barred from routinely going to the premises of the respondent for checking their accounts - suppression of facts - Section 73 of Central Excise Act - HELD THAT - The alleged omissions and commissions by the assessee and the surrounding circumstances warranting issuance of show-cause notice, no doubt, are stated in great detail by the Principal Commissioner of Central Excise and Customs, Cochin in Order in Original. Keeping view the scope of challenge to the order under appeal and the grounds raised, therefore, we are of the view that this Court need not refer to all the circumstances in detail. On perusal of orders and stated briefly, that the core of the controversy in the show-cause notices is whether the assessee filed returns and the service tax was not paid on the full taxable value of services rendered by the assessee. Further, whether the show-cause notice for extended limitation period is justifiable under any one of the circumstances covered by Section 73 of the Act. Alternatively, whether the period of five-year limitation is attracted to the case or not. Upon due verification of record, and the scope of appeal, we are constrained to record that the finding of fact recorded by the Tribunal on the inapplicability of extended period of limitation for the show cause notice dated 22.10.2005 does not warrant our interference and the grounds raised in this behalf do not merit consideration. Because the genesis for issuing show-cause notice for extended period of limitation is from the very material on record before the authority - The appellant since unable to attack a crucial finding of fact recorded by the Tribunal, necessarily must fail in the challenge against the order impugned in the appeal. The other argument is ancillary and it is stated the limited remand in the circumstances of the case is also erroneous. The order of remand under appeal does not warrant our interference - Appeal dismissed.

Issues Involved:
1. Justification of the Appellate Tribunal's remand for re-determination of Service Tax within the period of limitation.
2. Determination of suppression of facts by the respondent.
3. Validity of the demand made in the Show Cause Notice based on the details found in the books of accounts maintained by the respondent.
4. Applicability of the extended period of limitation under Section 73 of the Finance Act, 1994.

Detailed Analysis:

1. Justification of the Appellate Tribunal's Remand for Re-determination of Service Tax:
The Appellate Tribunal remanded the case to the Original Adjudicating Authority to re-determine the Service Tax due within the period of limitation. The Tribunal found that the demand for service tax was based on details found in the books of accounts maintained by the assessee. The Tribunal concluded that there were no specific grounds regarding suppression with intent to evade payment of service tax. The Tribunal directed the re-determination of the service tax due within the normal period of limitation, allowing deductions certified by an independent Chartered Accountant. The Tribunal's decision to remand was contested by the appellant, arguing that the Tribunal failed to comply with the directions of the High Court in the earlier judgment dated 26.03.2012, which required the Tribunal to examine all issues and record findings thereon.

2. Determination of Suppression of Facts by the Respondent:
The Tribunal found no suppression of facts by the respondent. It noted that the entire demand made in the show-cause notice was based on the details found in the books of accounts maintained by the assessee. The Tribunal observed that the assessee's operations were complex and spread over different parts of the country, which made it difficult to furnish location-wise split-up readily. The Tribunal concluded that there was no justification to say that the assessee suppressed facts with the intent to evade payment of service tax. The appellant argued that the Tribunal's findings on the extended period of limitation under Section 73 of the Act were perverse and not applicable to the case.

3. Validity of the Demand Made in the Show Cause Notice:
The Tribunal found that the demand made in the show-cause notice was based on the details found in the books of accounts maintained by the assessee. It noted that no specific grounds were made regarding how the assessee indulged in suppression with intent to evade payment of service tax. The Tribunal concluded that the demand for service tax should be limited within the normal period of limitation available under Section 73. The Tribunal directed the original adjudicating authority to re-determine the service tax due within the normal period of limitation after deducting the claims made by the assessee.

4. Applicability of the Extended Period of Limitation under Section 73 of the Finance Act, 1994:
The Tribunal found that the extended period of limitation under Section 73 of the Act was not applicable in this case. It noted that the entire demand made in the show-cause notice was based on the details found in the books of accounts maintained by the assessee. The Tribunal concluded that there was no fraud, suppression, or misrepresentation by the assessee. The appellant argued that the Tribunal's findings on the extended period of limitation were contrary to the explicit view taken by the High Court in the earlier judgment dated 26.03.2012. The High Court, upon due verification of the record, found that the Tribunal's finding on the inapplicability of the extended period of limitation did not warrant interference. The High Court concluded that the appellant failed to substantiate the arguments against the Tribunal's order of remand.

Conclusion:
The High Court dismissed the appeals, finding that the Tribunal's order of remand did not warrant interference. The questions raised by the appellant were answered against the Revenue and in favor of the assessee. The High Court concluded that the findings recorded by the Tribunal on the inapplicability of the extended period of limitation and the order of remand were within the Tribunal's jurisdiction and did not merit consideration for interference.

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