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TMI Blog2020 (9) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... was required to rely upon only tax statement under section 203AA of the Income Tax Act, 1961 i.e. Form 26AS for the period under investigation to find out the actual taxable amount out of the total service income of the petitioner. The petitioner has admitted in the statement recorded under section 14 of the Act-1944 as applicable to service tax law that he did not account the amount of service provided to various customers during the financial year 2010-2011 to 2014-2015 for his service tax liability resulting into evasion of service tax. The writ petition is not maintainable in view of stipulations made by Full Bench and even on merits, the petitioner having not complied with the provisions of the Service Tax Act at any point of time, is not entitled to claim any relief - In facts of the case, as the petitioner has failed to file return of income and failed to deposit the service tax collected by it there was clear intention to evade the tax on behalf of the petitioner. Petition dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... or short) area. 4. The petitioner was issued a show cause notice dated 20th October, 2015 by the respondent no.1 - Additional Commissioner, Central Excise, Customs and Service Tax, Bharuch Commissionerate demanding the service tax to the tune of ₹ 31,84,804/- in respect of the taxable amount received by the petitioner in consideration of his services rendered to his clients during the period between 2010-2011 to 2014-2015. Pursuant to such notice, statement of the petitioner was recorded under section 14 of the Central Excise Act, 1944 ("Act-1944" for short) read with section 83 of the Finance Act, 1994 ("Act-1994" for short). 5. It is the case of the petitioner that the impugned order dated 27th September, 2016 came to be passed by the respondent no.1 in absence of any reply or any evidence being produced by the petitioner. It is the case of the petitioner that due to prolonged illness since 2015 and due to hospitalization during the period between 2016 to 2017, the appeal could not be filed by the petitioner within the prescribed time limit as per the relevant statutory provisions. It is the case of the petitioner that the impugned order was passed on 27th September, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re even in aforesaid circumstances, but the exercise is discretionary which will be governed solely by the dictates of the judicial conscience enriched by judicial experience and practical wisdom of the judge." 7.2) It was therefore, submitted that as the respondent no.1 has exercised the power by passing the impugned order in excess of jurisdiction and by overstepping the limits of jurisdiction, the present writ application is maintainable. 7.3) On merits, Mr. Patel would submit that the respondent no.1 did not consider the legal provision of service tax that the petitioner was not liable to pay service tax as he had provided services to SEZ client in SEZ area and as such the services provided by the petitioner was exempted from payment of the service tax. It was further submitted that the liability of the petitioner to pay the service tax was only 25% of the taxable value of the services for the period from 1st July, 2012 to 31st March, 2015 and with effect from 1st April, 2015, it was 0%. 7.4) Learned advocate Mr. Patel submitted that by the impugned order, the respondent no.1 has demanded 100% service tax under the taxable service of "Manpower Recruitment & Supply Agency's S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 14th October, 2015 under section 14 of the Act-1944 as made applicable to the service tax matters vide section 83 of the Act1994 by the Superintendent of Central Excise and Service Tax, Bharuch Commissionerate, wherein the petitioner has stated and admitted that he was liable to pay the service tax on the man power supply services and he had issued the bills with service tax against the services provided to various companies situated at Dahej except to the companies which were situated or to whom services were provided were situated in SEZ Dahej. It was also admitted by the petitioner in the statement that he had charged service tax on 25% of the service amount of value of the services rendered by him for the man power supply and he had not filed returns in Form ST-3 nor paid any amount of service tax to the Government because of the weak financial condition, inspite of the fact that he was committing an offence under the service tax law and he was ready to pay the outstanding service tax to the Government at the earliest. 8.1) Mr. Shah therefore, submitted that the petitioner has not complied with the provisions of the Service Tax and therefore, the petition is liable to be dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of evidences available on records without any further communication to them. The Petitioner had not submitted any defence reply in response to the Show Cause Notice dated 20.10.2015. The Adjudicating Authority has initiated the adjudication proceeding after five months by way of personal hearing on 28/29/30.3.2016, 25/26/27.04.2016 and 25./26.07.2016 and the Petitioner has not responded or present before the Adjudicating Authority for the personal hearing. Therefore, the Adjudicating Authority has decided the issue on the basis of the records available before/with him. 16. Further, as per the Medical Certificate issued by Dr. A.D. Chauhan and Aanvi Endoscopy and Surgery Centre. Bharuch, medical treatment for illness has started from 29.01.2016. In other words, that the Petitioner was not hospitalised or not undergoing any treatment prior to the period of 29.01.2016. As per the Show Cause Notice, the Petitioner was supposed to fnle the defence reply during this period. It clearly shows that Petitioner's indifference to follow the procedures laid down by the Law of the land. Irrespective of the facts that he had obtained Service Tax registration and provided taxable supplies to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment and therefore, the contention of the petitioner with regard to exemption of the service tax contrary to the various notifications cannot be accepted. 8.8) Mr. Shah further relied upon the decision of the Supreme Court in case of Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal reported in 2010 (260) ELT 3 (SC) wherein the Apex Court has held as under : "22. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner has admitted in the statement recorded under section 14 of the Act-1944 as applicable to service tax law that he did not account the amount of service provided to various customers during the financial year 2010-2011 to 2014-2015 for his service tax liability resulting into evasion of service tax. In view of such findings of the fact available on record the adjudicating authority calculated the service tax liability amounting to ₹ 31,84,804/-by observing as under : "DISCUSSION AND FINDINGS: 16. I have carefully gone through the details given in the show cause notice and other case records. I find that the assessee has neither replied to the show cause notice nor has appeared for the personal hearing on the stipulated dates. This shows that the assessee not interested in defending their case and hence I have no option but to decide the case on merits exparte, on the basis of evidences available on records. 17. I find that M/s Macos Enterprises is a proprietorship concern engaged in providing taxable services under the category of 'Manpower Recruitment and Supply Agency and Sh. Manager Ibrahim Ansari is the proprietor of the said concern. The said services are ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 2010-11 11470499 2011-12 15802307 2012-13 12679383 2013-14 3199570 2014-15 2534689 Total 4,56,86,448/- He further stated that the above mentioned received amount against services also included services of manpower supply in some units at SEZ, Dahej area or Contractors providing services in units of SEZ, Dahej and hence no service tax was being charged in service invoices of such Units as (1) M/s Samsun Engg. Co. Ltd. (2) M/s IVRCL Ltd. (3) M/s Femas Construction and (4) M/s Afcon Infra. Ltd. He stated that all these firms were working in OPAL area of ONGC and he had been given sub-contract of 'manpower supply service and he had neither charged any Service tax in the invoices issued to these firms nor these firms had given any Service tax to them. He further stated that after June 2012 they had always charged Service tax on 25% of the service amount and had received payment accordingly. He further confirmed that they had neither filed any ST-3 return against their services nor had paid any amount of service tax to Government. He stated that the default was due to their poor financial condition although he was aware that doing so was an offence in view of Service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee of the list of the services as are required for the authorised operations (referred to as the specified services elsewhere in the notification) on which the SEZ unit or developer wish to claim exemption from service tax. (II) The ab initio exemption on the specified services received by the SEZ unit or the Developer and used exclusively for the authorized operation shall be allowed subject to the following procedure and conditions namely (a) The SEZ unit or the developer shall furnish a declaration in form A-1 verified by the specified officer of SEZ along with the list of specified services in terms of condition(1) (b) On the basis of declaration made in Form A-1, an authorization shall be issued by the jurisdictional Deputy Commissioner of Central Excise, as the case may be to the SEZ unit or the developer in Form A-2 (C) The SEZ unit or the Developer shall provide a copy of said authorization to the provider of specified services. On the basis of the said authorization, the service provider shall provide the specified services to the SEZ unit or the Developer without payment of service tax In view of above Notification, I Find that the SEZ unit or the developer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prietor M/s Macos Enterprise] that they have provided manpower supply service and hence is covered in the definition of manpower recruitment or supply agency service and such services are taxable services as per above quoted provisions. 17.7 I find that from 01.07.2012, Section 65(105) of the Finance Act, 1994 has ceased to apply and instead Section 66D has been introduced which provides for a negative list (ie. Service which are not taxable). Further from 01.07.2012 as per clause (44) of Section 65B of the Finance Act,1994 'service' means any activity carried out by a person for another for consideration and includes a declared service. I find that the present services do not fall under the purview of Section 66D and hence taxable under the provisions of the Act. 17.8 I thus find that the assessee has provided taxable services of manpower recruitment or supply agency services during the relevant period and charged/collected the service tax from them but failed to deposit the same in government account. I therefore hold that service tax of ₹ 31,84,804/- (as per details given in Annexure-A to the SCN) is required to be recovered from them under proviso to section 73(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 77 (1)(a)&(c) of the Act ibid. I find that penalty under Section 77(1)(a) is not attracted in this case as the same pertains to non obtaining of registration and the assessee, as the para 2 of the show cause notice suggests, has obtained registration No. ABYPA6656RST001. In respect of penalty under Section 77(1)(c) of the Finance Act,1994, I find that the assessee has failed to furnish information called by the Investigating officers and produce documents called by them and therefore I hold them liable for penalty under section 77(1) (c) of the Finance Act, 1994. 17.13 Proposal has also been made in the SCN for recovery of late fee under Section 70 of the Finance Act,1994. In this respect I find that the assessee has failed to file returns as required under Section 70(1) of the Finance Act,1994 read with Rule 7 of the Service Tax Rules,1994. I thus hold them liable for late fee under Section 70(1) of the Finance Act,1994 read with Rule 7C of the Service Tax Rules,1994, separately for each returns (Total 11 during the period 2010-11 to 2014-15). 18. Having regard to above findings, I pass the following order: ORDER (i) I, under Section 73(2) of the Finance Act,1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce." 11. With regard to the contention raised by the petitioner about his illness, it appears on perusal of the medical papers filed along with the additional affidavit that the petitioner was not that much sick during the year 20142017 and he could have taken appropriate action through some assistance as notices issued by respondent were duly served upon the petitioner. In such circumstances, only conclusion which can be arrived at is that the petitioner was negligent and was not vigilant to take appropriate action to challenge the impugned order. 12. Reliance placed by the learned advocate for the petitioner on the Full Bench decision in case of Panoli Intermediates (India) Pvt ltd (supra) in support of his contention that the writ petition is maintainable, is also not tenable in law because the impugned order cannot be said to be passed in excess of jurisdiction or by crossing the limits of jurisdiction by the adjudicating authority. The Full Bench while considering the question no.3 raised before it that when if statutory remedy or appeal under section 35 is barred by the law of limitation whether in a writ petition under Article 226 of the Constitution of India, the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words as 'fraud' or "collusion" and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 13. 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 apparentl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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