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TMI Blog2019 (5) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Authority in the impugned Order. The Commissioner completely failed to appreciate that the extended period of five years could have been invoked only when the appellant suppressed facts with an intent to evade payment of Service Tax. All that has been observed by the Commissioner is that Cenvat Credit in respect of Goods and Transport Services was wrongly taken by the Appellant. This would not be sufficient to attract the extended period of limitation. The benefit of the proviso to Section 73(1) could be taken only when there was an explicit averment in the show cause notice that there was suppression of facts with an intent to evade payment of duty. In the absence of such an averment, the extended period of limitation could not have been invoked. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... sted and confirmed against the said demand. The Appellant was also asked to explain why interest amounting to ₹ 18,15,95/- should not be recovered and why penalty should also not be imposed on the appellant. 5. The appellant submitted a reply to the show cause notice on 20 August 2009. In paragraph 2.9 of the reply, the appellant categorically stated that the extended period of limitation could be invoked under the proviso to Section 73(1) of the Act only in case there was failure to pay service tax on account of wilful suppression with intent to evade payment of service tax, but this statutory requirement was absent in the show cause notice. 6. Though paragraph 10 of the impugned order does refer to the submission made by the appellant in reply to the show cause notice that there was no basis for invocation of the extended period of limitation, but it does not deal with this submission as all that has been stated in paragraphs 18 and 19 of the impugned Order dated 16 February, 2010 is:- "18. The service tax is a levy, which is enforced by self-assessment. Great reliance is placed on the assessee and the onus of doing correct assessment falls on the assessee. Failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions advanced by the learned Counsel for the Appellant and the learned Authorized Representative of the Department. 10. The appellant is engaged in providing services of Clearing and Forwarding Agent, Business Auxiliary Service, Storage & Warehouse Service, Cargo Handling Service, Consulting Engineering Services, Port Services and Transport of Goods by Road Services. An internal audit was conducted for the period 01 April 2004 to 31 March 2006. It was observed that the appellant had wrongly taken Cenvat credit of ₹ 94,75,098/- on Goods & Transport Agency Services in the month of September 2005 and though it had reversed the credit, it did not pay interest. The show cause notice was issued to the appellant on 18 June, 2009. 11. Section 73 (1) of Act, deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded. The said section, as it stood at the relevant time, is reproduced below:- "73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation of five years as according to it the duty was short-levied due to suppression of the fact that if the turnover was clubbed then it exceeded Rupees Five lakhs. ------------ 4. A perusal of the proviso indicates that it has been used in company of such strong works as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression." (emphasis supplied) 15. It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty. 16. This decision of the Supreme Court in Pushpam Pharmaceuticals was followed by the Supreme Court in Anand Nishikawa Co. Ltd. v/s Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso." (emphasis supplied) 19. The Supreme Court in Continental Foundation Joint Venture v/s Commissioner of Central Excise, Chandigarh reported in 2007 (216) ELT 177 (SC) also observed, in connection with Section 11A of the Central Excise Act, that suppression means failure to disclose full information with intention to evade payment of duty and the observations are as follows:- "10. The expression "suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or "collusion" and, therefore, has to be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ression of fact or contravention of any provision of the Act or of the Rules made thereunder with intent to evade payment of duty. In that case the period of six months would stand extended to 5 years as provided by the said proviso. Therefore, in order to attract the proviso to Section 11-A(1) it must be alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Rules made thereunder with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show-cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been practiced or that the assessee was guilty of willful misstatement or suppression of fact. In the absence of any such averments in the show cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act." (emphasis supplied) 22. The learned Authorized Representative of the Department has, h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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