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TMI Blog2023 (5) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, the period from 01.04.2005 to 30.06.2009 is not within the normal period but the period from 01.07.2009 to 30.03.2010 is within the normal period. In regard to the services said to have been performed by a management or business consultant, the entire period is covered by the extended period of limitation under the proviso to section 73(1) of the Finance Act. The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there 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 has been substituted - There is substance in the contention advanced on behalf of the appellant that mere suppression of fact is not enough as it has also to be conclusively established that suppression was wilful with an intent to evade payment of service tax. In Pushpam Pharmaceuticals Company [ 1995 (3) TMI 100 - SUPREME COURT ] , the Supreme Court ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk required to be performed by the appellant would fall under construction services . It was imperative for the appellant to have led evidence to substantiate that any construction work was required to be performed by the appellant under the agreement - There is, therefore, no error in the finding recorded by the Commissioner that the appellant did not perform construction services and the work performed by the appellant would appropriately fall under the architect services. The order passed by the Commissioner confirming the demand of service tax for the extended period of limitation in so far as the architect services and management or business consultant services are concerned is set aside - the demand confirmed for the normal period for architect services as also the demand for CENVAT credit is upheld - Appeal allowed in part. X X X X Extracts X X X X X X X X Extracts X X X X ..... n activities undertaken. However, the show cause notice has alleged that the Annual Accounts of the noticee did not reflect expenditure on account of purchase of construction materials and payment received on account of construction services. In case no amount is found to has been incurred towards purchase of construction materials, it cannot be held that the services rendered were construction services. ***** I find that the limbs of the definition of Architect Service are satisfied in the present case viz. provision of service, which the noticee have rendered like Architectural, Engineering Design and Drawing Work, Consultancy Services for construction of Medical College and Hospitals where the scope of work was confined to Architecture, preparation of detailed drawing and design including structural design calculation for proper execution of works and visit to project site periodically as mutually agreed to offer interpretation of drawing/specification, supervision of the project etc. ***** 16.2 The show cause notice has further proposed demand of service tax amounting to Rs. 5,20,612/- on the ground that the noticee had entered into agreements with their various clients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 under the category of 'Management or Business Consultants Services' which covers in its ambit any services provided to any person by a management or business consultant in connection with the management of any organization or business. In any manner, which I find squarely cover the activities rendered by the noticee detailed above." (emphasis supplied) 4. Shri Prabhat Kumar, learned counsel for the appellant assisted by Shri Karan Kanwal, submitted that not only had the Commissioner committed an illegality in holding that the services provided by the appellant were not towards construction and were services provided either by an architect or by management or business consultant, but even otherwise the extended period of limitation could not have been invoked in the facts and circumstance of the case. Learned counsel, however, did not contest the order passed by the Commissioner to the extent it confirmed the demand of CENVAT credit amounting to Rs. 12,360/-. 5. Shri Harshvardhan, learned authorized representative appearing for the Department submitted that the order passed by the Commissioner does not suffer from any illegality. 6. The submissions advanced by the learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.03.2007 to 30.06.2007 One year from the relevant date 25.07.2007 Extended Period 01.07.2007 to 31.12.2007 One year from the relevant date 25.01.2008 Extended Period 01.01.2008 to 30.06.2008 One year from the relevant date 25.07.2008 Extended Period 01.07.2008 to 31.12.2008 One year from the relevant date 25.01.2009 Extended Period 01.01.2009 to 31.03.2009 One year from the relevant date 25.07.2009 Extended Period 10. It would be seen that in regard to the services performed by an architect, the period from 01.04.2005 to 30.06.2009 is not within the normal period but the period from 01.07.2009 to 30.03.2010 is within the normal period. In regard to the services said to have been performed by a management or business consultant, the entire period is covered by the extended period of limitation under the proviso to section 73(1) of the Finance Act. 11. The issue that arises for consideration, therefore, is whether the extended period of limitation as contemplated under the proviso to section 73(1) of the Finance Act has been correctly invoked in the facts and circumstances of the case. To examine this issue it would be necessary to examine the allegations made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to comply with the obligations cast upon it by the Legislature. There is no requirement that there should be suppression with intention to evade. Mere suppression is adequate for the purpose of the recovery of tax for the extended period as well as for imposing penalty under the service tax law. 15.4 I further note that the relevant facts were in the knowledge of the Service Tax Department in the year 2006 where it has been alleged in the show cause notice that the noticee suppressed real nature of service rendered and also receipt of income for rendering the taxable service viz. Architect Services or Management or Business Consultancy Services during the period 2005-06 onwards. I find that in case fraud, suppression, wilful mis-statement etc. with an intent to evade payment of duty is established, the department is well within its rights to raise a demand within a period of five years from the relevant date. ********** I find that the ratio of the above-cited judgment of the Hon'ble Supreme Court is squarely applicable to the facts of the instant case in as much as the noticee has not brought out anything on record to suggest that they ever declared the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner and an order will first be passed on the aforesaid aspect. The petitioner has the liberty to challenge the order in case of an adverse verdict and the other questions raised in the present petition are also thus kept open." (emphasis supplied) 15. The contention of the learned counsel for the appellant is that the necessary ingredients for invoking the larger period of limitation contemplated under the proviso to section 73 (1) of the Finance Act, namely wilful suppression of facts with an intent to evade payment of service tax do not exist and, therefore, the extended period of limitation could not have been invoked. 16. In order to appreciate this contention it would appropriate to reproduce section 73 of the Finance Act as it stood at the relevant time. This section deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded. It is as follows; "73.(1) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word "one year", the word "five years" has been substituted. 20. Learned authorised representatives appearing for the Department have, however, supported the finding recorded by the Commissioner in the impugned order that the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act was correctly invoked. 21. There is substance in the contention advanced on behalf of the appellant that mere suppression of fact is not enough as it has also to be conclusively established that suppression was wilful with an intent to evade payment of service tax. The Commissioner in paragraph 15.3 of the order (which has been reproduced in paragraph 12 of this order) took a view that "it is possible to invoke extended period in the case of service tax even in a situation where there is no intent to evade payment of service tax." 22. It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be "wilful' since "wilful' precedes only misstatement. 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 Finance Act, suppression of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant date. But the proviso 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." (emphasis supplied) 25. This decision was referred to by the Supreme Court in Anand Nishikawa Company Ltd. vs. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held: "10. The expression "suppression" has been used in 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." (emphasis supplied) 28. 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 Finance Act and held as follows; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 78). The Original Authority recorded that it may be true that the assessee has not contravened any provisions with intend to evade payment of service tax, however, he proceeded to confirm the demand for extended period and to impose penalty of an equal amount under Section 78. We find that Hon'ble Supreme Court in Cosmic Dye Chemical v. CCE, Bombay reported in 1995 (75) E.L.T. 721 (S.C.) held as below :- Now so far as fraud and collusion are concerned, it is evident "6. that the requisite intent, i.e., intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word "wilful" preceding the words "mis-statement or suppression of facts" which means with intent to evade duty. The next set of words "contravention of any of the provisions of this Act or Rules" are again qualified by the immediately following words "with intent to evade payment of duty". It is, therefore, not correct to say that there can be a suppression or mis-statement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Misstatement or suppression of fact must be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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