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TMI Blog2014 (11) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... td. for carrying out loading, shifting and feeding of coal and gypsum by roads. The said agreement provides that M/s. Prism Cement Ltd. shall provide High Speed Diesel (HSD) free of cost for transportation of the aforesaid goods by road. It is undisputed that the petitioner have been paying service tax on the amount charged from the said Company over the services taxable with the service tax which admittedly does not include the cost of the HSD. The Service Tax Authority and Comptroller and Auditor General of India (CERA) initiated audit of the petitioner's account and issued spot memo as well as show cause notices for the period 2002-2003 to 2008-2009. In course of such audit, a show cause notice dated 30th March, 2010 was issued raising a demand of Rs. 1,10,08,867/- for the period from 2004-2005 to 2008-2009 for rendering the services to M/s. TISCO for conversion of the coal to the coke, intra-port transportation of ores and processing of pyroxenite. The said show cause notice was challenged before this Court in W.P. No. 124 of 2011 on other grounds including the ground of limitation. The Court quashed the said show cause notice as the service tax authority could not satisfy the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise, Raipur reported in 2013 (32) S.T.R. 740 (Tribunal-Delhi). On the proposition that the revenue cannot take a different stand in not following the order of the Higher Authority or the Tribunal, even if, it is prejudicial to the interest of the revenue and relies upon a judgment of the Supreme Court in case of Union of India v. Kamlakshi Finance Corporation Ltd. reported in 1991 (55) E.L.T. 433 (S.C.). 6. Lastly it is submitted that the show cause notice is based on Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 which is repugnant to Sections 66 and 67 of the Finance Act, 1994 and is held ultra vires to that extent in case of Intercontinental Consultants & Technocrats Pvt. Ltd. v. Union of India reported in 2013 (29) S.T.R. 9 (Del.). The respondent at the very outset submits that the writ court should not interfere against the issuance of the show cause notice. He further submits that the petitioner shall get an opportunity to take all pleas available to him before the authority issuing show cause notice which shall be aptly dealt with in accordance with law. He further submits that the value of the HSD, even if, supplied free of cost by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion, willful mis-statement, suppression of fact or contravention of any provision of the said Chapter. Under sub-section (6) of Section 73, the relevant date is defined to mean the date on which the periodical return relating to the period for which the service tax is paid or where no periodical return is filed, the last date on which such periodical return is to be filed. The extended period is applied in the impugned show cause notice on the ground of willful suppression of fact as the cost of HSD supplied free by the service recipient is not shown in the taxable value in contravention to Section 67 of the said Act. The willful suppression cannot be assumed and/or presumed merely on failure to declare certain facts unless it is preceded by deliberate non-disclosure to evade the payment of tax. In this regard, the reliance can be conveniently placed upon Paragraphs 26 & 27 of the judgment rendered by the Apex Court in case of Anand Nishikawa Co. Ltd. v. CCE reported in (2005) 7 SCC 749 = 2005 (188) E.L.T. 149 (S.C.) held : 26. In Tata Iron & Steel Co. Ltd. v. Union of India this Court held that when the classification list continued to have been approved regularly by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppression. Therefore, in view of our findings made hereinabove that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts". In Densons Pultretaknik v. CCE this Court held that mere classification under a different sub-heading by the manufacturer cannot be said to be wilful mis-statement or "suppression of facts". This view was also reiterated by this Court in CCE v. L.M.P. Precision Engg. Co. Ltd." 9. The aforesaid proposition is further reiterated in a recent judgment rendered by the Supreme Court in case of Commissioner of Central Excise v. Bajaj Auto Ltd. reported in (2010) 13 SCC 117 = 2010 (260) E.L.T. 17 (S.C.) in these words : "19. In our view, on a reading of the relevant provision the extended period of limitation as provided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers, in reaching their conclusion, by-passed two appellate orders in regard to the same issue when were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The Principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f providing taxable service". What is brought to charge under the relevant Sections is only the consideration for the taxable service. By including the expenditure and costs, Rule 5(1) goes for beyond the charging provisions and cannot be upheld. It is no answer to say that under sub-section (4) of Section 94 of the Act, every rule framed by the Central Government shall be laid before each House of Parliament and that the House has the power to modify the rule. As pointed out by the Supreme Court in Hakam Chand v. Union of India, AIR 1972 SC 2427 :- "The fact that the rules framed under the Act have to be laid before each House of Parliament would not confer validity on a rule if it is made not in conformity with Section 40 of the Act." Thus Section 94(4) does not add any greater force to the Rules than what the ordinarily have as species of subordinate legislation." 12. The Tribunal at Delhi in case of Karamjeet Singh & Co. Ltd. (supra) upon placing reliance upon the above decisions rendered by the Delhi High Court held that non-disclosure of the value of the HSD supplied free of cost by the service recipient does not constitute the willful suppression of the material fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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