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TMI Blog2021 (2) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... assumed that the Appellant had not placed the two show cause notices and the order passed by the Tribunal, nothing prevented the Additional Director General from perusing the records of the Department for examining the two show cause notices and the order passed by the Tribunal. The Additional Director General could have even asked the Appellant to produce the two show cause notices and the order passed by the Tribunal. The important documents referred to by the Appellant that went to the root of the matter could not have been ignored in this manner. What also needs to be noted is that the amount charged for the exempted service that were provided by the Appellant was being repeatedly shown by the Appellant in the ST-3 returns filed in 2014 and 2015, and it is not a case where the Appellant had suppressed any information from the Department regarding the amount it had charged for the exempted services. It cannot, therefore, be urged that the Appellant had suppressed information or facts from the Department - What is further important to note is that on July 05, 2016, the Department also issued a notice to the Appellant for conducting an audit for the period 2012-13 to 2015-16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax Appeal No. 70075 of 2020 has been filed by M/s A.N. Kapoor (Janitors) Pvt. Ltd.[the Appellant] to assail the order dated December 27, 2019 passed by the Additional Director General (Adjudication), New Delhi [the Additional Director General ] , confirming the demand of service tax with penalty and interest. 2. Service Tax Appeal No. 70076 of 2020 has been filed by Harish Kapoor, Director of the Appellant, against the imposition of penalty of ₹ 1 lac upon him. 3. Service Tax Appeal No. 70077 of 2020 has been filed by Madhu Kapoor, Director of the Appellant, against the imposition of penalty of ₹ 1 lac upon her. 4. The Appellant, which is a company incorporated under the Companies Act and having its office at Lucknow, registered itself with the service tax Department under cleaning activity service as defined under section 65(24)(b) of the Finance Act, 1994 [the Finance Act], which service is taxable under section 65(105)(zzzd) of the Finance Act. The Appellant claims that it provided cleaning activity services to government hospitals, educational institutes and non-commercial organizations, though a sizable portion of the revenue was g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed. This order dated January 29, 2014 was assailed by the Appellant before the Tribunal. The Revenue also filed an Appeal against that part of the demand which had been dropped by the Commissioner (Appeals). These two Appeals were numbered as ST/52793 of 2014 and ST/52319 of 2014. 7. All the aforesaid three Appeals bearing numbers ST No. 841 of 2011, ST No. 52793 of 2014 and ST No. 52319 of 2014 were decided by the Tribunal by a common order dated November 20, 2018. The two Appeals filed by the Appellant were allowed for the reason that the extended period of limitation could not have been invoked, while the Appeal filed by the Revenue was dismissed. The Tribunal observed as follows : 4 . We have carefully gone through the records of the cases and submissions made. We first examine the limitation aspect in the present appeals. We find that the Revenue was having full knowledge of the activities of the appellant as early as 13.08.2007, however, by invoking extended period of limitation with allegation of suppression show cause notice was issued on 28.10.2009 and the said show cause notice was issued for the period from November, 2005 to January, 2008. We, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated November 13, 2019 for the period April 01, 2014 upto June 30, 2017 by also invoking the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. It was stated that the Appellant had wrongly claimed exemption in respect of certain services which had resulted in short payment of service tax. In regard to the extended period of limitation, it was stated that the Appellant had suppressed the facts and value of taxable service and contravened various provisions of the Act and Rules with an intent to evade payment of service tax and thus, appeared to have rendered itself liable for penal action under section 78 of the Finance Act. Shri Harish Kapoor and Smt. Madhu Kapoor, Directors of the Appellant, were also required to show cause as to why personal penalty should not be imposed upon them under section 78A of the Finance Act. 11. The Appellant filed a reply dated December 12, 2019 contending that the extended period of limitation could not have been invoked and the relevant portion of the reply submitted by the Appellant is as follows : 24. Defence reply: 1. xxxxx xxxxx xxxxx 2. xxxxx xxxxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he short paid service tax amount is not due to question regarding the question of taxability of the cleaning services but mainly due to the fact that such service tax was charged and collected by the Noticee but shown as exempted services by the Noticee in their records. Secondly, the Noticee has also wrongly claimed the benefit of Exemption Notification No. 25/2012-S.T. dated 20.6.2012 and as amended in some cases . I find that the provisions of the Exemption Notification are quite clear and even a plain reading of the Notification clearly shows the services that are exempted and those that are not covered under the said Notification. Further, looking to the said fact that no document was made available by the Noticee to the Investigating Officers either at the time of Audit or during investigations by the officers of the DGGI and that the said details of the services being provided by the Noticee were collected by the officers from the service recipients clearly proves that the Noticee wanted to suppress the information from the department and thus the extended period under the proviso clause of Section 73(1) has been rightly invoked in the present SCN. 29.3 The next conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit, unless there is evidence that the relevant documents were produced before the Audit Party and there exists a report by the Audit Party on those documents, the Assessee shall have the liberty to claim that there was no suppression and accordingly in those circumstances the provisions of Larger period of Limitation can very well be invoked. Looking to the present case, I find that no evidence has been submitted by the Noticee in support of their contention that the documents examined by them during the course of audit are subject matter of present demand notice. Under the circumstances, I hold that this judgment is applicable to the present case. [emphasis supplied] 13. Shri Vineet Kumar Singh and Smt. Nisha Bineesh, learned counsel for the Appellant, made the following submissions: (i) The extended period of limitation could not have been invoked in the facts and circumstances of the case, more particularly when since August 13, 2007 all the relevant information with the balance sheets for the financial years were available with the Department, including the particulars of the exemption and the exemption notifications which were mentioned in the periodical S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Appellant, have been exempted from payment of service tax under various Notifications issued from time to time. The Department did raise this issue through various letters issued to the Appellant and on August 13, 2007 the Appellant explained that the liability to pay service tax was exempted. However, the first show cause notice dated October 28, 2009 for the period November 2005 to January 2008 was issued to the Appellant demanding service tax on the services which the Appellant claimed had been exempted from payment of service tax. The demand was confirmed by the adjudicating authority and the Appeal filed by the Appellant before the Commissioner (Appeals) was also dismissed. A second show cause notice dated September 29, 2011 was thereafter issued to the Appellant for the period 2006-07 to 2009-10. The demand made in the second show cause notice was also confirmed, though the Commissioner (Appeals) did reduce the demand 17. It needs to be noted that the extended period of limitation was sought to be invoked in the first and the second show cause notices. When the matter came up before the Tribunal, the issue regarding invocation of the limitation period was raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices were confirmed. Appeals were filed before the Tribunal relating to the second and the third show cause notices. It was contended before the Tribunal that the extended period of limitation could not have been invoked since there can be no suppression of facts when a show cause notice had been issued by the Department on the basis of certain set of facts is followed by another show cause notice for a later period on the same set of facts. The contention advanced was that the Department was fully aware of the facts even at the time of issuance of first show cause notice. The Supreme Court disposed of the Appeals on the point of limitations only and the observations are as follows : 8. Without going into the question regarding Classification and marketability and leaving the same open, we intend to dispose of the appeals on the point of limitation only. This Court in the case of P B Pharmaceuticals (P) Ltd . v. Collector of Central Excise reported in (2003) 3 SCC 599 = 2003 (153) E.L.T. 14 (S.C.) has taken the view that in a case in which a show cause notice has been issued for the earlier period on certain set of facts, then, on the same set of facts another SCN b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, it could not be said that there was any wilful suppression or mis-statement and that therefore, the extended period under Section 11A could not be invoked. Similarly, this judgment was again followed in the case of Hyderabad Polymers (P) Ltd. v. Commissioner of Central Excise, Hyderabad reported in 2004 (166) E.L.T. 151 (S.C.). It was observed in para 6 : .......... On the ratio laid down in this judgment it must be held that once the earlier Show Cause Notice, on similar issue has been dropped, it can no longer be said that there is any suppression. The extended period of limitation would thus not be available. We are unable to accept the submission that earlier Show Cause Notice was for a subsequent period and/or it cannot be taken into consideration as it is not known when that Show Cause Notice was dropped. If the Department wanted to take up such contentions it is for them to show that that Show Cause Notice was not relevant and was not applicable. The Department has not brought any of those facts on record. Therefore, the Department cannot now urge that findings of the Collector that that Show Cause Notice was on a similar issue and for an id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been invoked, the Appellant had placed reliance upon the two show cause notices, the order passed by the Tribunal and the earlier audit report. These were relevant factors which were required to be examined by the Additional Director General to arrive at a conclusion as to whether the extended period of limitation could be invoked. 23. What also needs to be noted is that the amount charged for the exempted service that were provided by the Appellant was being repeatedly shown by the Appellant in the ST-3 returns filed in 2014 and 2015, and it is not a case where the Appellant had suppressed any information from the Department regarding the amount it had charged for the exempted services. It cannot, therefore, be urged that the Appellant had suppressed information or facts from the Department. 24. What is further important to note is that on July 05, 2016, the Department also issued a notice to the Appellant for conducting an audit for the period 2012-13 to 2015-16. The Appellant was required to furnish all the relevant documents, including documents relating to details of the exempted services. The audit report does not mention that the Appellant had provided any servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in Trans Engineers India Pvt. Ltd. vs Commissioner of Central Excise, Pune [ 2015 (40) STR 490 (Tri.-Mumbai)] also examined whether the extended period of limitation could have been invoked when the audit report did not raise any query in respect of the payment of the service tax as alleged in the show cause notice. The relevant portion of the decision is reproduced below : 10. In our view the entire demand is to be set aside on the ground on limitation only. Revenue authority cannot invoke the extended period of limitation, when the records of the assessee were audited by the officers once but did not find any short-payment from records. The 2nd audit party, doing the audit of same period or over lapping period, cannot allege that appellant has misstated or suppressed the facts from the departments. We find that the Hon ble High Court of Bombay in the case of Rajkumar Forge Ltd. - 2010 (262) E.L.T. 155 (Bom.) held in paragraph No. 13. 13. It is an undisputed fact that insofar as the petitioners are concerned, audit of the petitioners factory was carried out on three dates, i.e., 6th September, 1993, First November, 1995 and 2nd September, 1994. The petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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