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TMI Blog2023 (3) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... ud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. Assuming the levy is valid, the impugned proceeding invoking the extended period of limitation cannot be sustained. To invoke the extended period, it ought to be demonstrated that service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. It has been consistently held by the Hon ble Supreme Court that any non-disclosure or claim of non-liability on the basis of bonafide interpretation of law would not enable the Respondent to invoke the extended period of limitation. This Court also finds that the attempt made by the learned counsel for the Respondent to sustain the impugned proceedings, by invoking extended period of limitation cannot be sustained, in view of the fact that the view taken by the Petitioner has also been approved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise, Tirunelveli, whereby, the Petitioner was directed to show cause as to why service tax of Rs.15,28,564/- (Rupees Fifteen Lakhs Twenty Eight Thousand Five Hundred and Sixty Four only) for the period 2010-2011 to 2014-2015 under Proviso to Section 73(1) of Finance Act, 1994, should not be demanded. 3. The constitutional validity for levy of service tax on accommodation service provided by hotel, guest house etc., was challenged by the Federation of Hotels and Restaurants Association of India before the Delhi High Court. The Delhi High Court in the case of Federation of Hotels and Restaurants Association of India Vs Union of India reported in 2016 (44) STR 3 (Del) held that in the absence of machinery provision for levy and collection of tax on accommodation, the levy does not survive and no tax is payable. The Court in paragraph 77(ii) struck down Section 65(105)(zzzw) of Finance Act, 1994 pertaining to levy of service tax on the provision of "Short Term Accommodation Services" and corresponding instructions/circulars seeking to operationalise the levy as unconstitutional and invalid. 4. The learned counsel for the petitioner would submit that the impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation would enable the revenue to issue notice within five years from the relevant date. In any event, there is an alternate remedy by way of appeal. In this regard, reliance was sought to be placed on the following judgments: (a) Kuttukaran Trading Ventures Vs Commissioner of Central Excise, Customs and Service Tax, Cochin reported in 2014 (35) STR 481 (Ker). (b) Master Marine Services Private Limited Vs Commissioner of Service Tax, Mumbai, The CESTAT, West Zonal Bench reported in 2014 (35) STR 79(Tri). 7. Assuming the levy is valid, the impugned proceeding invoking the extended period of limitation cannot be sustained. To invoke the extended period, it ought to be demonstrated that service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. It has been consistently held by the Hon'ble Supreme Court that any non-disclosure or claim of non-liability on the basis of bonafide interpretation of law would not enable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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." (ii) State of Rajasthan v. Jaipur Udyog Ltd., reported in (1974) 3 SCC 247: "4. We are told that the Respondent is guilty of an offence falling under Section 10(b) which reads: "If any person … being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration…." Now the only question is whether the Respondent was guilty of falsely representing, when purchasing the goods referred to earlier that those goods were covered by the certificate of registration. Unless it is shown that he had made such a false representation, Section 10-A is not attracted. Two Judges of the High Court and one Member of the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder. These ingredients postulate a positive act. Failure to pay duty or take out a licence is not necessarily due to fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act. Suppression of facts is not failure to disclose the legal consequences of a certain provision. ...As mentioned hereinbefore, mere failure or negligence on the part of the producer or manufacturer either not to take out a licence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not, would not attract Section 11-A of the Act. In the facts and circumstances of this case, there were materials, as indicated to suggest that there was scope for confusion and the appellant believing that the goods came within the purview of the concept of handicrafts and as such were exempt. If there was scope for such a belief or opinion, then failure either to take out a licence or to pay duty on that behalf, when there was no contrary evidence that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extended period of limitation."
69. The question of limitation involves a question of jurisdiction. The finding of fact on the question of jurisdiction would be a jurisdictional fact. Such a jurisdictional question is to be determined having regard to both fact and law involved therein. The Tribunal, in our opinion, committed a manifest error in not determining the said question, particularly, when in the absence of any finding of fact that such short-levy of excise duty related to any positive act on the part of the appellant by way of fraud, collusion, wilful misstatement or suppression of facts, the extended period of limitation could not have been invoked and in that view of the matter no showcause notice in terms of Rule 10 could have been issued.2"
9. Applying the above principles, it appears that there is no room for invoking the extended period on the facts set out above. The impugned order dated 05.04.2017 is thus set aside as barred by limitation and thus bad for want of jurisdiction and a nullity.
10. With the above observations, the writ petition stands disposed of. No costs. Consequently, connected miscellaneous petition is closed. X X X X Extracts X X X X X X X X Extracts X X X X
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