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TMI Blog2022 (8) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of limitation - Section 73(1) of the Finance Act,1994 - HELD THAT:- On a careful reading of the show-cause notice, it is evidently clear that there is absolutely no whisper of any allegation of wilful mis-statement or suppression of facts or fraud or collusion as committed by the respondent assessee with an intention to evade payment of service tax. In the absence of such factual finding, the extended period could not have been invoked - the respondent was registered with the service tax department in the year 2004; during 2006 the Director General of Central Excise and Intelligence conducted search and seizure in the premises of the respondent and seized various records. It is thereafter in August 2006, the Officer from Dhanbad alleged that conversion charges for conversion of coal into coke attracted service tax under the category Business Auxiliary Service . The respondent immediately sent their reply informing the Officer that the conversion of coal into coke amounts to manufacture, thus exempt from service tax in view of the proviso to Section 65(19) of the Finance Act. It appears that none of the proceedings were taken to the logical end i.e. by issuance of show-ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n demanded a total service tax of Rs. 1,10,08,867/-. The break up details of the same are under three heads:- (i) Rendering of service to M/s. Tisco for getting coal converted to coke, (ii) intra court transportation of ores in terms of agreements with M/s. PM International Logistics Limited, subsidiary of Tisco and (iii) processing of Pyroxenite for M/s. Tisco. The show cause notice was issued invoking the extended period of limitation as provided under Section 73(1) of the Finance Act, 1994. In terms of Sub-Section 1 of Section 73 where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. The proviso states that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of (a) fraud; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as maintainable. Having held so, the Court then proceeded to examine the second contention raised by the writ petitioner that the show cause notice was barred by time and the ingredients required to be fulfilled for invoking the extended period of limitation being absent, the show cause notice is without jurisdiction. To examine the correctness of the contention, the learned Writ Court had noted the factual position which had occurred prior to the issuance of the impugned show cause notice dated 30.03.2010. These factual details more particularly the action taken by the department and the response given by the assessee is of utmost importance to examine as to whether the extended period of limitation could have been invoked. At this stage it will be beneficial to extract the following portion of the impugned order:- According to the petitioner, the petitioner was registered with the Service Tax Department in 2004 and has since then been paying service tax on taxable services rendered by the petitioner. On 18th April, 2006, the Directorate General of Central Excise and Intelligence conducted search and seizure at the premises of the petitioner and seized various records rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nite with effect from 1st June, 2007 was made applicable to when service tax mining service , under Section 65(105) zzzy of the Finance Act, 1994. According to the petitioner, the petitioner submitted various documents pertaining to bills relating to conversion charges on processing of pyroxenite , as required. By a letter dated 17th December, 2009, the Commissionerate, Service Tax sought information on the same issue of bills on account of processing of pyroxenite. There was further correspondence, after which the impugned show cause notice was issued. To avoid prolixity this Court has not adverted to the details of the correspondence. The Director General of Central Excise has also issued a show cause notice dated 23rd April, 2010 for the period from 1st October, 2004 to 28th February, 2005 demanding service tax of Rs. 6,12,979/-. The aforesaid notice is ex facie barred by limitation. The impugned show cause notice has been issued by the Commissioner of Service Tax in purported invocation of the proviso to Section 73(1) of the Finance Act, 1994 on the vague allegation that the petitioner had not paid appropriate service tax, not disclosed relevant deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the aforesaid notification. The Court also took note of the arguments of the learned advocate for the respondent that intra court transportation constitute port service with enactments or enforcements of Finance Act, 2010 and prior to the same it was not a taxable service. Further the Court noted that it is not in dispute that after the amendment the writ petitioner have registered themselves as Port Service Provider. Though the learned Writ Court had noted that the submissions with regard to the nature of services rendered by the writ petitioner, no findings on merits were given on those issues as the court was satisfied that the impugned show cause notice was barred by limitation, accordingly the writ petition was allowed. 10. Mr. K. K. Maity, learned advocate appearing for the appellant submitted that the respondent had suppressed the fact of filing the writ petition before this Court in WP No. 1518 of 2006 which was dismissed by judgment dated 14.01.2009, aggrieved by such order, the respondent preferred appeal before the Hon ble Division Bench in APO No. 332 of 2009 which was disposed of by judgment dated 08.02.2010 wherein the revenue was granted three months time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which is a master circular on show-cause notice, adjudication and recovery. This master circular rescinds several circular issued from 1980 onwards except 3 circulars and in Paragraph 3.2 of the said circular while dealing with the ingredients for the extended period, it has been mentioned as follows: 3.2 Ingredients for extended period: Extended period can be invoked only when there are ingredients necessary to justify the demand for the extended period in a case leading to short payment or non-payment of tax. The onus of establishing that these ingredients are present in a given case is on revenue and these ingredients need to be clearly brought out in the Show Cause Notice along-with evidence thereof. The active element of intent to evade duty by action or inaction needs to be present for invoking extended period. 12. It is therefore, submitted that the entire proceedings are wholly unsustainable and without jurisdiction and the learned Writ Court had rightly quashed the proceedings. 13. When the appeal was heard on 5th of August, 2022, we had framed three issues for consideration firstly, whether the writ petition was maintainable as against a show-cause notice, se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is absolutely no whisper of any allegation of wilful mis-statement or suppression of facts or fraud or collusion as committed by the respondent assessee with an intention to evade payment of service tax. In the absence of such factual finding, the extended period could not have been invoked. In the earlier part of this judgment we had noted the factual position by extracting the relevant portion of the order passed in the writ petition. We have consciously done so to take not of the conduct of the parties. From those facts it is evidently clear that the respondent was registered with the service tax department in the year 2004; during 2006 the Director General of Central Excise and Intelligence conducted search and seizure in the premises of the respondent and seized various records. It is thereafter in August 2006, the Officer from Dhanbad alleged that conversion charges for conversion of coal into coke attracted service tax under the category Business Auxiliary Service . The respondent immediately sent their reply informing the Officer that the conversion of coal into coke amounts to manufacture, thus exempt from service tax in view of the proviso to Section 65(19) of the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of Rs. 15,00,000/- it was directed to be given. The Hon ble Division Bench held that the amount of Rs. 15 lakhs on being refunded shall be kept by the appellant therein in a short-term fixed deposit and not encash it for a period of 3 months and in the meantime, it will be open to the Department to take steps in accordance with law and upon failure to do so, the appellant therein would be entitled to appropriate the amount refunded. Thus, the interpretation sought to be given by the appellant is a thorough mis-reading of the judgment of the Hon ble Division Bench. 16. Mr. Mittal submitted that as against the judgment in MAT No. 1293 of 2014 dated 05.01.2015 review application has been filed by the respondent in RUV No. 33 of 2015 and the same is pending, however, the legal issue in the said case has been settled by the Hon ble Supreme Court in the case of Union of India and Another Versus Inter continent Consultants Technocrats Pvt. Ltd. (2018) 4 SCC 669. 17. Mr. Maity had submitted that the respondent had moved a writ petition before the High Court of Orissa in WPC No. 6660 of 2007 and obtained an order of stay restraining the Department from proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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