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TMI Blog2022 (6) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... on taxable service. The finding has not only been recorded without giving reasons, but even otherwise the order cannot go beyond the show cause notice. In COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [ 2007 (8) TMI 10 - SUPREME COURT] , the Supreme Court observed that it was well settled that a show cause notice is the foundation in the matter of levy and recovery of duty, penalty and interest and if there was no invocation of Rule 7 of the Valuation Rules, 1975 in the show causes notice, it would not be open to the Commissioner to invoke the said Rule - In NESTOR PHARMACEUTICALS LTD. VERSUS COMMISSIONER OF C. EX. DELHI [ 2000 (1) TMI 187 - CEGAT, NEW DELHI] a Division Bench of the Tribunal observed that the Commissioner (Appeals) cannot go beyond the scope of the show cause notice and that no matter can be decided on a ground other than the grounds raised in the show cause notice and for this reason the impugned order was set aside. It, therefore, follows that the Commissioner was not justified in holding that the extended period of limitation under the proviso to section 73(1) of the Finance Act was correctly invoked - Appeal allowed - decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Act, 1994 was rightly invoked in the case and the party is also liable for penal action under section 78 of the Act. Since penalty is imposable upon the party under section 78 of the Act, I am inclined not to impose any penalty under section 76 of the Act. 5. Ms. Rinki Arora, learned Counsel for the appellant submitted that the extended period of limitation could not have been invoked in the facts and circumstances of the case as it was not a case of suppression of facts, much less suppression of facts with intent to evade payment of service tax. 6. Shri S. Shekhar, learned authorized representative appearing for the Department, however, supported the impugned order and submitted that the Commissioner was justified in holding that the extended period of limitation had correctly been invoked. Learned authorized representative also pointed out that the show cause notice did state that the appellant had failed to pay service tax with intent to evade payment of service tax. 7. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the Department have been considered. 8. The issue that arises for consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made thereunder; 12. The proviso to section 73(1) of the Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful suppression or suppression of facts or contravention of any of the provisions of the Chapter or the rules made under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word one year , the word five years had been substituted. 13. It is correct that section 73 (1) of the Act does not mention that suppression of facts has to be wilful since wilful precedes only mis-statement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under section 73(1) of the Act, suppression of facts have still to be wilful with an intent to evade payment of service tax. The Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of court the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful 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. (emphasise supplied) 16. This decision was referred to by the Supreme Court in Anand Nishikawa Company Ltd. vs. Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the proviso to Section 11A of the Act accompanied by very strong 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 11-A 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. 19. The Delhi High Court in Bharat Hotels Limited vs. Commissioner of Central Excise (Adjudication) [2018 (12) GSTL 368 (Del.)] also examined at length the issue relating to the extended period of limitation under the proviso to Section 73 (1) of the Act and held as follows; 27 . Therefore, it is evident that failure to pay tax is not a justification for imposition of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not only been recorded without giving reasons, but even otherwise the order cannot go beyond the show cause notice. 23. In Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd. [(2007) 8 (2007) 8 SCC 89], the Supreme Court observed that it was well settled that a show cause notice is the foundation in the matter of levy and recovery of duty, penalty and interest and if there was no invocation of Rule 7 of the Valuation Rules, 1975 in the show causes notice, it would not be open to the Commissioner to invoke the said Rule. 24. In Nestor Pharmaceuticals Ltd. v. Commissioner of Central Excise, Delhi [2000 (116) ELT 477 (Tri.)] a Division Bench of the Tribunal observed that the Commissioner (Appeals) cannot go beyond the scope of the show cause notice and that no matter can be decided on a ground other than the grounds raised in the show cause notice and for this reason the impugned order was set aside. In Tata Johnson Controls Automotive v. Commissioner of Customs., Mumbai [2004 (167) ELT 93 (Tri. Mum)] a Division Bench of the Mumbai Tribunal observed that it was not open to the Commissioner (Appeals) to make out a new case in the order passed by the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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