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TMI Blog2016 (3) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... y tax. These grounds have been analysed above in the light of authoritative judicial pronouncements and held to be inadequate for the said purpose in the absence of any substantial evidence that all that was wilfull and to evade tax. Demand set aside - Decided in favor of assessee. - Service Tax Appeal No. 669 of 2009 - Final Order No. 50931 / 2016 - Dated:- 3-3-2016 - MR. JUSTICE G. RAGHURAM, PRESIDENT AND MR. R. K. SINGH, MEMBER (TECHNICAL) For the Petitioner : Sh. B. K. Singh, Advocate For the Respondent ; Shri Vaibhav Bhatnagar, DR ORDER PER: R. K. SINGH: Appeal is filed against order in original dated 25/05/2009 in terms of which service tax demand of ₹ 1 024 0938/- for the period 2003 - 04 to 2007 - 08 was confirmed under Technical Inspection and Certification Agency service along with interest and penalties by invoking the extended period for wilful misstatement / suppression of facts. The adjudicating authority held that the service rendered by the appellant fell under Technical Inspection and Certification Agency service and passed the impugned order. 2. Ld. Counsel for the appellant has essentially contended that: (a) the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable, there was no ambiguity in this regard and appellants are guilty of wilful misstatement or the suppression of facts. 4. We have considered the contentions of both sides. As regards the contention that the adjudicating authority was not competent to adjudicate the cases, it is not in dispute that the adjudicating authority was assigned this case for adjudication by the Chief Commissioner in terms of Notification 6/2009 ST dated 30/01/2009 which is reproduced below: In exercise of the powers conferred by section 37A of the Central Excise Act, 1944 (1 of 1944) as made applicable to service tax b y section 83 of the Finance Act, 1994 (32 of 1994), the Central Government hereby directs that the powers exercisable by the Central Board of Excise and Customs under the provisions of Section 83A read with the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 16/2007-ST., dated 19th April 2007 (GSR No. 303(E) dated the 19th April 2007), shall also be exercised by the Chief Commissioner of Central Excise for the purpose of assigning the adjudication of cases, under the provisions of the said Finance Act or rules made thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Central excise officers as it thinks fit for exercising the powers under chapter V of the Finance Act, 1994 within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise officer shall exercise his powers . A fair and harmonious construction of Notification No. 6/2009 ST read with Notification No. 16/2007-ST leads to compelling conclusion that vide Notification No. 6/2009 the Chief Commissioner was empowered to exercise the powers of Central Board of Excise and Customs for the purpose of assigning adjudication of cases which did not merely involve penalty. Consequently the adjudicating authority having been assigned the responsibility to adjudicate this case by the Chief Commissioner, was legally empowered to do so. 5. The functions / responsibilities of the appellant are summarised in para, 29, 29.1 and 29.2 of the impugned order which are reproduced below: 29. Now coming the activities of M/s QCI, it is observed that M/s QCI are providing services to promote, coordinate, guide, implement and maintain and accreditation system in accordance with the relevant national and international standards guide. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recognition to certification agencies for certificates like ISO. ISO certification plays an important role in the field of commerce and industry. International Organisation for Standardisation (ISO) is a worldwide federation of national standards bodies (representing each country) headquartered in Geneva, holds that ISO is concerned with standards for technical and non-technical areas. It is observed that ISO publishes quality management system requirements. A management system of an organisation includes different management systems such, as a quality management system, financial management system or an environment management system. ISO does not itself issue certificate in conformity to the standards. This work is carried out by certification bodies, which are authorised or accredited by National Standard Bodies in different countries and M/s Quality Council of India is one such body in India. These organisations are granted accreditation by M/s Quality council of India as a token of recognition of competency to carry out audit for providing certification. M/s QCI accreditation provides formal recognition of technical competence of the organisation, thus providing a ready means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant however was inspecting or examining the process employed by professional bodies which on being found competent were accredited by it to certify others. It was also contended that by virtue of the principle of noscitur a sociis / ejusdem generis, the meaning of the word process appearing in the definition given in Section 65(105) (108) ibid has to be understood in the context of the society of the words in which it appears, namely, goods, materials and immovable property and for that reason the word process appearing in the definition of technical inspection and certification should be taken to mean / cover only physical or chemical processes as was held in the case of American Quality Assessors (supra). The contention that the noscitur a sociis / ejusdem generis principle would confine the meaning of process in the above quoted definition only to physical or chemical processes does not appear to be tenable. This is so since, the word process does not appear in the company of words which can be said to form a society inasmuch as goods and immovable property do not make a society at all; indeed they are mutually exclusive; whatever is goods cannot be immovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es within the stipulated time. They also failed to assess the tax and file the return and deposit the tax within the prescribed period. These lapses cannot be considered as bonafide lapses. The suppression of facts and contravention of the provisions of service tax rules was with an intention to evade payment of duty. The case laws relied are not applicable in the facts of the present case. The failure to take registration was not a result of a bonafide belief that no tax is payable. Thus, I hold that M/s QCI have failed to pay the service tax within the prescribed period and are liable for penalty under section 76 of the Act. They have not paid the tax by suppressing the actual value of the taxable services with an intention to evade payment of service tax. Thus, they are liable for penalty under Section 78 of the Act. I find that the penalty under Section 76 is leviable for the tax not paid in time. The short levy under section 78 is leviable when the short levy occurs on account of fraud, suppression etc. In this case, the short levy occurred on account of suppression of facts and the noticee is liable to penalty under section 78. Thus, it is viewed that if penalty under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not registered with service tax authorities and not paying tax. They however did not declare the services to the department nor seeked registration in order to avoid service tax on their services. Thus they wilfully suppressed the services provided by not taking registration under the category of service and not discharging the due service tax liability, by concealment and non filing of declaration on nature of services; as such the provisions of extended period as provided under Section 73 of the said Act is invokable in this case and service tax duty liability is recoverable from them . Thus even in the show cause notice the only grounds on which wilfull misstatement/ suppression of facts has been alleged are that the appellant did not declare the service to the Department, did not obtain registration and did not pay tax. These grounds have been analysed above in the light of authoritative judicial pronouncements and held to be inadequate for the said purpose in the absence of any substantial evidence that all that was wilfull and to evade tax. 10. In the light of the foregoing analysis, we hold that the appellant provided Technical Inspection and Certification Agency ..... 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