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TMI Blog2018 (8) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that:- Reliance placed by appellant in the case of M/S. SANKHLA UDYOG VERSUS CCE & ST, JAIPUR [2014 (12) TMI 614 - CESTAT NEW DELHI], where it was held that the adjudicating authority has clearly stated that there was interpretation of law involved and the extended the benefit of Section 80 of Finance Act, 1994 for not imposing and penalty. It clearly shows that the ingredients required for invoking extended period are not present in this case. Indeed in the entire adjudication order there is no word as to how the extended period is invocable - the decision which was relied upon by the Tribunal was never challenged by the department and in view of the consistent practice that the decision which has been accepted by the department should be accepted for every assessee. The issues are answered in favor of assessee against the department - appeal dismissed - decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... where relief from penalties is granted by giving the benefit under Section 80 of the Act of 1994 (on the basis of bonafide belief on the part of the Assessee, the extended period of limitation cannot be invoke for confirmation of service tax demand on the basis of the allegations of willful missstatement, suppression of facts or deliberate contravention of Rules with an intention to evade the duty payment? "Whether the learned CESTAT was correct in holding that the ingredients of Section 80 of the Act of 1994 are same as that of the Act of 1994 are same as that of the ingredients which are required for invoking extended period of limitation provided in the proviso to Section 73(1) of the Act of 1994?" 3. Counsel for appellant has taken us to the original order which has been passed by the authority and contended that taking into consideration the conduct of the respondent which is narrated as under: 5. On being asked, M/s RRECL provided the requisite information vide their letter dated 10.12.08, 01.09.09, 22.09.09 and 04.12.09 and also submitted a chart as the breakup of various fees received from July 2005 to November, 2008 wherein they havd shown taxable value and Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They challenged it on the same ground that it is a manufactured by the Government department, hence not liable to duty. They went upto the Revision stage in early 80s' and lost. Further, the CBEC vide circular No. 96/7/2007-ST dated 23.08.07 in the case of Department of Post clarified that (i) Following services provided by Department of Posts are not liable to service tax. - Basic mail services as postal services such as post card, inland letter, book post, registered post provided exclusively by the Department of Posts to meet the universal postal obligations. Transfer of money through money orders, operation of savings accounts, issue of postal orders, pension payments and other such services. (ii) In addition to the services mentioned in above, Department of Posts also provides a number of services such as courier services (Speed Post), insurance services (Postal Life Insurance), agency or intermediary services on commission basis (distribution of mutual funds, bonds, passport applications, collection of telephone and electricity bills), which are also provided by other commercial organizations. Such services are liable to service tax under appropriate taxable servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to sectiion 73 is thus clearly invokable as the noticees have suppressed the material facts with intent to evade payment of Service Tax. 23. As discussed in forgoing paras, I am of the view that the noticees are liable to pay service tax amounting to ₹ 2,63,29,092/- in view of the provisions of Section 73(1) of Finance Act, 1994 alongwith interest as per provisions of Section 75 of the Act, ibid. 23. The noticees have argued that they were under bonafide belief that they were not liable to service tax therefore it's a fit case for waiver of penalty in terms of section 80 of the Act. The issue of suppression of fact and invocability of section proviso to section 73 has already been discussed in preceding para and it has been held that the proviso is rightly invocable. However considering the fact that the noticees are a state government undertaking and the benefit of evasion of service tax would not go to any private person of company and also that they have already deposited ₹ 68 lakh voluntarily, I am inclined to accept the plea of the noticees there was reasonable cause for failure to pay tax. It has been held in several cases even if the proviso to sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. That is, the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. The word 'evade' in the context means defeating the provision of law of paying duty. It is made more stringent by use of the word 'intent'. In other words the assessee must deliberately avoid payment of duty which is payable in accordance with law. In Padmini Products v. Collector of Central Excise 1989 (43) E.L.T. 195, it was held that where there was scope for doubt whether case for duty was made out or not the proviso to Section 11A of the Act would not be attracted. The appellant is a statutory body. It had taken out licence for concrete as it was being sold to outsiders. No licence was taken out for wood products as according to it it was advised so by the Excise Department itself. It would have been better if the appellant would have examined the officer who was advised not to take licence. But mere non-examination of officer could not give rise to an inference that the appellant was intenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc., and the Tribunal came to the conclusion that inasmuch as the appellant had manufactured the goods without informing the Central Excise authorities and had been removing these without payment of duty, these would have to be taken to attract the mischief of the provisions of Rule 9(2) and the longer period of limitation was available. But the Tribunal reduced the penalty, Counsel for the appellants contended before us that in view of the trade notices which were referred to by the Tribunal, there is scope for believing that agarbaties were entitled to exemption and if that is so, then there is enough scope for believing that there was no need of taking out a licence under Rule 174 of the said Rules and also that there was no need of paying duty at the time of removal of dhoop sticks, etc. Counsel further submitted that in any event apart from the fact that no licence had been taken and for which no licence was required because the whole duty was exempt in view of notification No. 111/78 , referred to hereinbefore, and in view of the fact that there was scope for believing that it was exempt under Schedule annexed to the first notification, i.e., 55/75, being handicrafts, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. Therefore, in this appeal, we have to examine the correctness of the decision of the Tribunal. For the reasons indicated above, the Tribunal was in error in applying the provisions of Section 11A of the Act. There were no materials from which it could be inferred or established that the duty of excise had not "been levied or paid or short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of the Act or of the rules made thereunder. The Tribunal in the appellate order has, however, reduced the penalty to ₹ 5,000/- and had also upheld the order of the confiscation of the goods. In view of the fact that the claim of the revenue is not sustainable beyond a period of six months on the ground that these dhoop sticks, etc. were not handicrafts entitled to exemption, we set aside the order of the Tribunal and remand the matter to the Tribunal to modify the demand by confining it to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence. 4. Continental Foundation JT. Venture vs. Commr. Of C. Ex., Chandigarh-I, 2007 (216) ELT 177 (SC), wherein it has been observed as under: 11. Factual position goes to show the Revenue relied on the circular dated 23.5.1997 and dated 19.12.1997. The circular dated 6.1.1998 is the one on which appellant places reliance. Undisputedly, CEGAT in Continental Foundation Joint Venture case (supra) was held to be not correct in a subsequent larger Bench judgment. It is, therefore, clear that there was scope for entertaining doubt about the view to be taken. The Tribunal apparently has not considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e away from the bona fide conduct of the Appellant. It still reflects the fact that the Appellant made efforts in pursuit of adherence to the law rather than its breach." 6. Sankhla Udyog vs. Commissioner of C. Ex. & S.T., Jaipur, 2015 (38) S.T.R. 62 (Tri. - Del.), wherein it has been observed as under: "6. As may be observed, the adjudicating authority has clearly stated that there was interpretation of law involved and he extended the benefit of Section 80 of Finance Act, 1994 for not imposing and penalty. It clearly shows that the ingredients required for invoking extended period are not present in this case. Indeed in the entire adjudication order there is no word as to how the extended period is invocable. As such we find that the extended period is not invocable in this case." 7. Commissioner of C. Ex., Allahabad vs. Bharat Yantra Nigam Ltd., 2014 (38) S.T.R. 554 (Tri - Del.), wherein it has been observed as under: " We have considered the submissions of the learned DR and have gone through the records of this case. The respondent as holding company of their subsidiary companies as mentioned above, are monitoring their performance regularly and take timely corrective ..... 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