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TMI Blog2016 (2) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... x was on the Service Receiver or whether the component of service tax paid by the Service Receiver was realized from the petitioner as Service Provider or whether the submissions of service tax returns regularly showing all the details and particulars are indicative of the fact that these facts are within the knowledge of the respondent authorities. These are vital facts which, if duly considered by the respondent No. 3, would have enabled him to come to the correct conclusions. The initial burden is on the department to prove that the situations visualised by the proviso existed. But once the department is able to bring on record material to show that the appellant was guilty of any of those situations which are visualised by the section, the burden shifts and then applicability of the proviso has to be construed liberally. When the law requires an intention to evade payment of duty then it is not mere failure to pay duty. It must be something more. - Matter remanded back for fresh decision. - Writ Petition (C) No. 6776/14, Writ Petition (C) No. 6777/14, Writ Petition(C) No. 6778/14 - - - Dated:- 3-2-2016 - T. Vaiphei, ACJ And Rumi Kumari Phukan, JJ. For the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssam by M/s Oil India Ltd. vide the letter of Award dated 6-5-2010. As per the instruction of the M/S Oil Ltd. ( Service Receiver for short), the petitioner submitted its running bills charging service @ 4% service @ 12% from first to the fourth running bills whereafter, as advised by the Service Provider, the petitioner submitted its fifth running bill by charging Service Tax @ 12.36% (out of which the liability of the Service Provider was 50%). In the meantime, the Government of India in the Ministry of Finance issued a Circular dated 6-7-2012 in the matter of clarification of Taxation Rules, which provided that consequent upon the change introduced at the time of Budget, 2012 on the point of Taxation Rules, 2011 together with revision of the Service Tax rate from 10% to 12%. As per this clarification, it was provided that works contract earlier paying Service Tax @ 4.8% under Works Contract (Composite Scheme for payment of Service Tax) Rules, 2007 are now required to pay the Service Tax @ 12% on 40% of the total amount charged, keeping the effective rate again at 4.8% (as only the manner of expression has been altered). On coming to know the said Circular, the petitioner sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the petitioner is guilty of suppression of fact with intent to evade payment of the Service Tax. 4. It may be noted that the provision of Section 73(1) of Finance Act, 1994 is couched in the language exactly similar to Section 11-(A)(1) of the Central Excise Act, 1944. The scope and ambit of Section 11-(A)(1) of the Central Excise Act, 1994 came up for consideration before the Apex Court in Sarabhai M. Chemicals v. Commissioner of Central Excise, Vadodara, (2005) 2 SCC 168 and this is what the Apex Court had said: 23. Now coming to the question of limitation, at the outset, we wish to clarify that there are two concepts which are required to be kept in mind for the purposes of deciding this case. Reopening of approvals/assessments is different from raising of demand in relation to the extended period of limitation. Under Section 11-A(1) of the Central Excise Act, 1944, a proper officer can reopen the approvals/assessments in cases of escapement of duty on account of non-levy, non-payment, short-levy, short-payment or erroneous refund, subject to it being done within one year from the relevant date. On the other hand, the demand for duty in relation to extended period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 3-4-1986 as well as the chapter under which the goods fell. We have gone through the classification list. It indicates the claim for exemption. The classification list was duly approved by the department. So also monthly returns were filed by the appellant in the form of RT-12, in which there was a complete disclosure regarding the nature of the goods. These returns were regularly assessed by the department. The material placed on record shows filing of gate passes, invoices and classification list. They indicated the names of the consignees. A mere reading of these names would indicate that sorbitol solution was sold to non-pharmaceutical companies like M/s Golden Tobacco Co. Ltd. Despite such disclosure, the department approved the classification list as well as RT-12 returns. There was no reopening of the approvals and assessments within the stipulated period. In the circumstances, the Judicial Member of the Tribunal was right in holding that no case was made out for invoking the extended period of limitation. As stated above, the end use was built in the exemption notification. Therefore, the department could have demanded duty within one year from the relevant date under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case at hand, the stance taken by the petitioner all along is that the petitioner has been submitting its Service Tax returns regularly by showing the details and particulars of the exemption availed of by them, which were within their knowledge and further that the respondent No. 3, while issuing the impugned order, has failed to consider the relevant fact that in terms of the Letter of Award, the burden of Service Tax was on the Service Receiver and the component of Service Tax paid by the Service Receiver was realized from the petitioner as Service Provider, which clearly indicates that it had nothing to gain by evading payment of the Service Tax. In our opinion, the construction placed by the Apex Court on the provisions of Section 11-(A)(1) of the Central Excise Act in Sarabhai M. Chemical (supra) will also apply while construing the provisions of Section 73(1) of the Finance Act, 1994. So construed, the Revenue, before invoking Section 73(1) of the Finance Act, 1994, shall have to prove that there was wilful suppression of fact by the petitioner. After all, this provision cannot be applied just for any omission on the part of the petitioner unless it is a deliberate attempt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns is not sufficient to avoid the ground reality that an assessee is free from resorting (to?) suppression/mis-statement of actual fact. Hence, there are other machinery of other department like Audit and Anti-evasion to monitor such elements of evasion. I, therefore, find that the Show Cause Notice was issued rightly by invoking an extended period of five years of suppression of facts. The extended period of limitation for recovery of Service Tax is invocable in terms of the proviso to Section 73(1) of the Finance Act, 1994 for the situation as discussed in the above show cause notice. Further, since Section 78 of the Finance Act, 1994 is a natural corollary to the proviso to Section 73(1) ibid, mandatory penalty under Section 78 ibid is liable to be imposed on the said assessee. 6. In our opinion, the respondent No. 3 did not record any findings regarding the allegation of the petitioner as to whether the burden of service tax was on the Service Receiver or whether the component of service tax paid by the Service Receiver was realized from the petitioner as Service Provider or whether the submissions of service tax returns regularly showing all the details and particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X
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