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TMI Blog2017 (10) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to Section 73 (1) of the FA - the impugned order dated 2nd March 2017 passed by the CESTAT is without application of mind. The CESTAT erred in holding that the extended period of limitation in terms of the proviso to Section 73 (1) of the FA was rightly invoked by the Department. Appeal allowed - decided in favor of appellant. - SERTA 3/2017 & CM 19834 of 2017 - - - Dated:- 17-10-2017 - S. MURALIDHAR PRATHIBA M. SINGH JJ. Appellant Through: Mr. J. K. Mittal with Mr. Rajveer Singh, Advocates. Respondent Through: Mr. Sanjeev Narula, CGSC with Mr. Abhishek Ghai, Advocate. O R D E R Dr. S. Muralidhar, J.: 1. This is an appeal by the Assessee under Section 35G of the Central Excise Act, 1944 read with Section 83 of Chapter V of the Finance Act, 1994 ( FA ) challenging an order dated 2nd March 2017 passed by the Customs, Excise Service Tax Appellate Tribunal ( CESTAT ). 2. Admit . The following substantial questions of law are framed for consideration: (i) Whether in the facts and circumstances of the case, the impugned order dated 2nd March 2017 passed by the CESTAT is perverse and without application of mind? (ii) Whether in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (ii) Details of all payments made to the AAI. (iii) Details of payment made to contractors for services created and maintained at the airport. (iv) Details of services provided to organizations other than those of AAI. (v) Copies of income tax returns along with details of balance sheet 9. As far as the above response is concerned, para 2 of the SCN dated 4th March 2008 acknowledges it and states as under: 2. Pursuant to the intelligence gathered, the authorized person of the company was summoned on 8th November 2005 and asked to furnish relevant documents (RUD-1). In response, the company submitted copy of Licence Agreement dated 13th December 2001 and dated 20th August 2004 signed by them with the Airport Authority of India, license fee paid to the Airports Authority of India and Balance Sheet for the fiscal year 2004-05 (RUD-II). 10. It appears that after the above response of the Assessee for almost a year nothing transpired. From para 5 of the SCN it appears that on 4th December 2006 and 26th March 2007, the voluntary statements of the Manager of the Assessee were recorded by the Department. The SCN further notes that on 16th March the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CESTAT at Bangalore held in similar circumstances, that the ultimate liability to collect service tax rested with the AAI which was actually providing the services. It was held by the CESTAT that a person who simply collects the entrance fee cannot be equated with the service provider. However, the ACST in the above adjudication order distinguished the aforesaid decision and held it to be inapplicable. 16. Aggrieved by the above adjudication order, the Assessee went before the Commissioner (Appeals), Service Tax (CAST) who by an order dated 6 th January 2011 dismissed the appeal and concurred with the ACST. The CAST observed that even if the appellant was not empowered to collect the Service Tax from the visitors, then also he was supposed to pay the appropriate tax, considering the amount collected as inclusive of tax and the demand has been calculated accordingly only the clarification was received by the appellant from the Airport Authority to the appellant on 02.03.2005. It was further observed that the Appellant company was well aware about their liability but visitor suppressed the facts from the department in that equation. 17. By the time the CAST deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 3. Brief facts of the case are that the applicant is engaged in the activity of sale of tickets for visitors at IGI Airport, New Delhi. From 10.09.2004, levy of service tax came on the activity of Airport Services, litigation was going on between the Airport Authority of India (AAI) and Service Tax Department whether on the services provided at airport are taxable or not and the applicant was not allowed by AAI to collect the service tax. Therefore, the applicant did not collect the service tax during the period 10.09.2004 to 01.03.2005. As and when the AAI allowed the! applicant to collect service tax w.e.f. 02.03.2005, the applicant took service tax registration and from that day onwards paying the service tax on the activity of sale of tickets to the visitors. After taking the registration, Revenue started proceedings against the applicant asking the details of services provided prior to 02.03.2005, on which the applicant replied and after completion of the investigation against the applicant, a Show Cause Notice was issued to them on 04.03.2008 to demand the service tax for the period 10.09.2004 to 01.03.2005. Thereafter, the Show Cause Notice was adjudicated and dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for complete waiver of pre-deposit. Accordingly, we waive the pre-deposit and stay the recovery of impugned adjudicated liability during the pendency of the appeal. 20. It is significant that in para 3 of the above interim order the CESTAT took note of the fact that it was the Assessee s case that it had not been permitted by the AAI to collect service tax for the period from 10th September 2004 to 1st March 2005 and that as soon as the AAI allowed the Assessee to do so with effect from 2nd March 2005, the Assessee obtained service tax registration and from that date onwards was paying service tax. It was observed by the CESTAT in the context of the decision of the CESTAT, Bangalore which was reversed by the Kerala High Court that the Supreme Court had subsequently affirmed the Kerala High Court and since there were contrary views, suppression cannot be alleged. 21. The Court finds that the CESTAT has in the impugned final order dated 2nd March 2017 committed errors, some of which may be inadvertent but not all. For instance, the impugned order mentions the date of final hearing as 14th February 2013 whereas the interim order itself was passed on 16th December 2014. Obvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding the sale of entry tickets and its failure to collect service tax thereon for the above period from 10th September 2004 to 1st March 2005. 26. The Assessee does not deny that it did not collect service tax for the above period. But it has a valid explanation for not doing so. It is right in questioning the invocation by the Department of the extended period of limitation under cause (d) of the proviso to Section 73 (1) FA since the above facts, far from being suppressed, were known to the Department before the one year period from 1st March 2005 expired. 27. Mr. Narula then argued that the mere failure to pay the service tax was by itself is sufficient to conclude that there was suppression of material facts by the Assessee. That contention stands negatived by the decision of the Supreme Court in Uniworth Textiles Limited v. Commissioner of Central Excise, Raipur 2013 (288) ELT 161 (SC) where in para 12 the Supreme Court observed as under: 12. We have heard both sides, Mr. R.P. Bhatt, learned senior counsel appearing on behalf of the Appellant, and Mr. Mukul Gupta, learned Senior counsel appearing on behalf of the Revenue. We are not convinced by the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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