9911796707
TMI Blog2022 (8) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... er investigation, Annex. A show cause notice dated 3.9.2008 was issued. The Chief Financial Officer of the Bank appeared on the summons issued and gave a statement under Section 41 of the Central Excise Act, 1944, and the same was recorded on 4/1/2008. The Commissioner of Central Excise, Customs and Service Tax adjudicated the issue and passed Annex.B Order-in-Original No.05 of 2009 ST demanding Rs. 5,45,61,022/for the period from 10.9.2004 to 31.7.07 under section 73(2) of the Finance Act 1994 (for short 'the Act') and also imposed penalty under Sections 76 and 77 of the Act. Penalty sought to be imposed under section 78 of the Act was waived under section 80 of the Act. 3. Aggrieved by the final order of the Commissioner, Service Tax appeal was filed before the appellate Tribunal. The Tribunal, relying on various judgments of Tribunals and High courts, held us follows: "9.1 As far as issue number 2 and 3. Namely, service charges paid to foreign banks against the service received by the appellant bank, and service charges paid to Master Card International are concerned, we find that the said services fall in the definition of 'Import of Service' and the same was made liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the extended period of limitation cannot be invoked in the respondents' case? iii) Ought not the Appellate Tribunal should have found that the short payment was detected by the department and there was clear suppression of information on the part of the respondent in their statutory returns." 6. Heard the learned standing counsel Smt. Preetha S Nair for the appellant and Shri Kuryan Thomas for the respondent. 7. The main contention raised by the counsel for the appellant is that the Tribunal erred in finding that the extended period of limitation cannot be invoked and the entire period from 10.9.2004 to 31.7.2007 is barred by limitation. 8. For a proper understanding of the substantial questions of law raised in this appeal, the following Section is extracted, which reads as follows. "SECTION 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, Central Excise Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 76, or section 77, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. (2) Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President." Invoking the said section, the penalty imposed under Section 78 of the Act was waived. 12. When the matter reached the Tribunal, questions of invocation of extended period of limitation was an issue and the Tribunal found that when the Commissioner has dropped the penalty under section 78 by invoking Section 80 of the Act, there was no intention to evade payment of service tax and hence invocation of the extended period of limitation under 73 of the Act is not available to the department and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urden is cast upon the assessee of proving that there was reasonable cause for the failure referred to in sections 76, 77 or 78, in which even no penalty would be imposable for the failure. The important point to note is that while enacting section 80, Parliament introduced an overriding non-obstante provision which operates even in relation to the provisions of section 78. Consequently, the provision envisages that notwithstanding what is contained in section 78, it is open to an assessee to prove that there was a reasonable cause for the failure attributed in section 78. 16. The view which has found acceptance by the Tribunal in the present case is that once the extended period of limitation under section 73(1) has been applied, there can be no reasonable cause within the meaning of section 80. Now the circumstances which have been set out in the proviso to section 73(1) are indeed similar to those which are set out in section 78 for the imposition of a penalty. Not withstanding this, the Parliament did allow to the assessee an opportunity to establish that there was a reasonable cause of for the failure and this provision in section 80, as noted above, overrides section 78 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in various High Courts and held that non payment of duty was due to reasonable cause and once Section 80 of the Act is invoked, the invocation of the extended period of limitation was also held to be bad. The department challenged the said finding before the High Court of Bombay in Rochem's case (supra). The Bombay High Court held that the finding was held to be legal as there was no misstatement or suppression on the question of payment of service tax was pending in litigation before various courts. 18. Section 80 of the Act starts with a non-obstante clause. According to the learned counsel for the appellant even though penalty under section 78 of the Act is waived invoking section 80 of the Act, if the assessee proves that there was reasonable cause for the failure of payment of service tax, the same yardstick cannot be brought into section 73(1) of the Act. Section 73(1) of the Act gives a right to the Central Excise Officer for the recovery of the service tax due. Exonerating the respondent from the payment of penalty under Section 78 of the Act, by invoking Section 80 of the Act will not absolve the Bank from payment of service tax and recovery of the avoided service tax by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
