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TMI Blog2011 (8) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices prior to its amendment with effect from 2010 or into the definition of ‘cargo handling services’. In the impugned show cause notice it is claimed that the activities constituted business auxiliary service. If the services clearly fell within the ambit of business auxiliary service, there would be no need to amend the definition of port-services. In any case there was some confusion. If there was any confusion or doubt which had to be cleared by amendment, it cannot be said that there was wilful suppression or contravention of Chapter V to evade payment of Service Tax, so as to attract the proviso to Section 73(1) of the Finance Act, 1994.It is immaterial that the petitioner is registered in Kolkata but explanation had been given to the authorities of Paradeep, Ranchi and Dhanbad. If the queries were answered, it cannot be said that there was wilful suppression. It appears that the concerned authorities initially accepted the explanation of the assessee, but later proceeded to issue the impugned show cause notice upon change of opinion. The impugned show cause notice is barred by limitation. The show cause notice is thus set aside. X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act. 4. Service Tax is payable under the Finance Act, 1994 as amended from time to time. After Service Tax was first introduced in 1994, amendments have from time to time been made and different kinds of services have been brought under the net of Service Tax. The Finance Act, 1994 has last been amended by the Finance Act, 2011. 5. Some of the relevant provisions of the Finance Act, 1994 as amended are as follows : "65. In this Chapter, unless the context otherwise requires, ………….. (7) "assessee" means a person liable to pay the service tax and includes his agent; ……... 19) "business auxiliary service" means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "service in relation to promotion or marketing of service provided by the client" includes any service provided in relation to promotion or marketing of games of chance, organised, conducted or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or mere transportation of goods; …………. (25) "clearing and forwarding agent" means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent; ……………… (81) "port" has the meaning assigned to it in clause (q) of section 2 of the Major Port Trusts Act, 1963 (38 of 1963). (82) "port service" means any service rendered by a port or other port or any person authorised by such port or other port, in any manner, in relation to a vessel or goods; …………. (95) "service tax" means tax leviable under the provisions of this Chapter; …………. (105) "taxable; service" means any service provided or to be provided, - ………… (zn) to any person, by a port or any person authorised by the port, in relation to port services, in any manner; …………. (zr) to any person, by a cargo handling agency in relation to cargo handling services; …&h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may, by notification in the Official Gazette, specify such other person or class of persons, who shall make an application for registration within such time and in such manner and in such form as may be prescribed. 70. (1) Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency and with such late fee not exceeding two thousand rupees, for delayed furnishing of return, as may be prescribed. (2) The person or class of persons notified under sub-section (2) of Section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed. ……………. 72. If any person, liable to pay service tax, - (a) fails to furnish the return under Section 70; (b) having made a return, fails to assess the tax in accordance with the provisions of this Chapter or rules made, thereunder, the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith intent to evade payment of service tax. 9. In view of the explanation to Section 73(1), where service of notice is stayed by an order of Court, the period of stay is to be excluded in computing the period of one year or five years, as the case might be. In the instant case, however, there was no order of stay of any Court and as such the explanation is not attracted. 10. The Commissioner of Service Tax has no power and/or authority and/or jurisdiction to issue any show cause notice after expiry of the period of limitation prescribed under Section 73(1). A show cause notice would necessarily have to be issued within one year from the relevant date. Only in cases of fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of Chapter V or any Rules made thereunder with intent to evade payment of service tax, a show cause notice might be issued within five years from the relevant date. 11. The condition precedent for exercise of jurisdiction to issue a show- cause notice after expiry of one year but before expiry of five years, is subject to finding of fraud, collusion, wilful misstatement, suppression of facts or contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding the existence of an alternative remedy, a writ petition may be entertained in at least three contingencies, that is, where the writ petition has been filed for the enforcement of a fundamental right, where the actions and/or the proceedings impugned are in violation of the principles of natural justice, or where the order or proceedings impugned are without jurisdiction. 18. The High Court may entertain a writ petition under Article 226 of the Constitution, in spite of existence of an alternative statutory remedy in a case where the authority against whom the writ petition is filed is shown to have had no jurisdiction to initiate action impugned or to have purported to usurp jurisdiction without legal foundation. 19. In Whirlpool Corporation v. Registrar of Trade Marks reported in (1998) 8 SCC 1, the Supreme Court discussed its earlier judgments on the question of maintainability of a writ petition when there was an alternative remedy, and held that the High Court was not justified in dismissing the writ petition at the initial stage without examining the contention of the writ petitioner that the show cause notice was without jurisdiction. 20. In this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal cannot confer jurisdiction to itself by deciding a jurisdictional fact wrongly. A statutory authority also cannot assume jurisdiction by wrongly deciding a jurisdictional fact. 26. In Calcutta Discount Company Ltd. v. Income Tax Officer, Companies District I, Calcutta & Anr. reported in AIR 1961 SC 372, a Constitution Bench of the Supreme Court held : "The scheme of the law clearly is that where the Income Tax Officer has reason to believe that an underassessment has resulted from non-disclosure he shall have jurisdiction to start proceedings for re assessment within a period of 8 years;……… The argument that the Court ought not to investigate the existence of one of these conditions viz. that the Income Tax Officer has reason to believe that underassessment has resulted from non-disclosure of material facts, cannot therefore be accepted. It is well settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30. Furthermore, this Court, in exercise of jurisdiction under Article 226, can also interfere with a show cause notice that is vague, devoid of particulars and incapable of effective reply, for such a show cause is in flagrant violation of principles of natural justice. This Court might also interfere with a show cause notice which does not fulfil the statutory conditions for issuance thereof and/or ex facie discloses no offence, misconduct or other cause of action for which action as contemplated in the show cause notice can be initiated. 31. The petitioner is apparently engaged in co-ordinating, supervising and liaisoning supply of coal from various collieries to different customers as per agreements executed with them. 32. According to the petitioner, the petitioner was registered with the Service Tax Department in 2004 and has since then been paying service tax on taxable services rendered by the petitioner. 33. On 18th April, 2006, the Directorate General of Central Excise and Intelligence conducted search and seizure at the premises of the petitioner and seized various records relating to service tax, including computer data. 34. It appears that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 2007 was made applicable to when service tax 'mining service', under Section 65(105)(zzzy) of the Finance Act, 1994. 42. According to the petitioner, the petitioner submitted various documents pertaining to bills relating to conversion charges on processing of 'pyroxenite', as required. 43. By a letter dated 17th December, 2009, the Commissionerate, Service Tax sought information on the same issue of bills on account of processing of pyroxenite. There was further correspondence, after which the impugned show cause notice was issued. To avoid prolixity this Court has not adverted to the details of the correspondence. 44. The Director General of Central Excise has also issued a show cause notice dated 23rd April, 2010 for the period from 1st October, 2004 to 28 February, 2005 demanding service tax of ₹ 6,12,979. The aforesaid notice is ex facie barred by limitation. 45. The impugned show cause notice has been issued by Commissioner of Service Tax in purported invocation of the proviso Section 73(1) of the Finance Act, 1994 on the vague allegation that the petitioner had not paid appropriate service tax, not disclosed relevant details to the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no question of inclusion of any claim prior to 30th March, 2005. 52. The claim of ₹ 71,394/- towards charges realized for intra-port transportation of ores during the financial year 2004-05 is, as observed above, ex facie barred by limitation. Reference may also be made to the decision of the Supreme Court in Ilavia Enterprises v. CCE, Jaipur reported in 1997 (91) E.L.T. 26 (S.C.). 53. Moreover, when the extended period of limitation is invoked in terms of the proviso to Section 73(1) of the Finance Act, sufficient particulars of the alleged fraud, collusion or wilful misstatement would have to be given in the show cause notice to enable the assessee to give a meaningful and effective reply thereto. Similarly, for the same reason particulars have to be given of the facts allegedly suppressed. 54. Contravention simpliciter of the provisions of Chapter V of the Finance Act, 1994, as amended from time to time, does not in itself attract the proviso to Section 73(1) of the said Act. For invocation of the extended period of limitation, the contravention must be coupled with intent to evade payment of service tax. 55. A show cause notice issued upon invoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h March, 2005 exempted processing or production of goods for or on behalf of the clients from service tax. The petitioner was thus exempted under the aforesaid notification. 62. Mr. Mittal argued that intra-port transportation constitutes 'port service' with enactment and enforcement of Finance Act, 2010. Prior to amendment of Section 65(105)(zn) with effect from 1st July, 2010, the said Section provided as follows : "65(105) "taxable service" means any service provided or to be provided, - ………………….. (zn) to any person, by a port or any person authorised by the port, in relation to port services, in any manner;" 63. It is not in dispute that after the amendment, the petitioner has got itself registered as port service provider. In support of his submission that the extended period of limitation could not have been invoked, Mr. Mittal pointed out that the office of the Superintendent, Central Excise Customs and Service Tax had issued a communication to the petitioner contending that intra-port transportation services provided by the petitioner to M/s. T.M. International Logistic Ltd. within the Paradeep Port c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice of the specific sub-clause and/or sub clauses under which the alleged activities of the petitioner were covered, vitiates the show cause notice. 71. In Amrit Foods v. CCE, U.P. reported in 2005 (190) E.L.T. 433 (S.C.) cited by Mr. Mittal, the Supreme Court upheld the decision of the Central Excise and Service Tax Appellate Tribunal setting aside a show cause notice on the ground that it did not specify which of the various clauses of the concerned rule had allegedly been contravened. The Supreme Court, in effect, held that the assessee should be put on notice of the exact nature of contravention. In this case, the petitioner has not been put to notice of the exact clause and/or clauses of Section 65(19) of the Finance Act, 1994, under which the petitioner was allegedly taxable. 72. Conversion of coking coal into coke, would certainly not amount to business auxiliary service. However, the job of getting others to convert coal by sub-contract for commission may have, in my view, amounted to rendering of business auxiliary service. 73. However, the service tax authorities were aware that the petitioner was rendering the service of getting coking coal of TISC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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