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TMI Blog2023 (7) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... o incriminating evidence against him to prove that he had willfully suppressed the facts with an intention to evade the payment. He being the employee, question of him being the beneficiary of alleged evasion does not at all arises. Once there is absence of motive, in the light of criminal jurisprudence, mens rea cannot be attributed. The adjudicating authority has been unreasonable while imposing penalty on Shri Anil Mohan Pokhriyal. Similarly there appears no evidence of any positive act on part of Retd. Col. Swarn Kumar Makin and even of the company that there was any intentional mala fide suppression. Except that there is uncorroborated statement of auditor Shri Satnam Singh, same cannot be looked into especially when the penalty on the said auditor of appellant company was done away. Penalties upon Shri Anil Mohan Pokhriyal and Retd. Col. Swarn Kumar Makin and on the company are held as liable to be set aside. The order under challenge is held as liable to be set aside on this score only. Works contracts pertaining to Industrial or Commercial Construction Services - HELD THAT:- The relevant service i.e. Commercial or Industrial Construction too was in existence till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Anil Mohan Pokhriyal were recorded. Based thereupon and upon the documents as that of ST- 3 returns and balance sheets recovered during search that the difference in value declared by the party in ST-3 returns vis- -vis the figures shown as Revenue from Operations , other income and mobilization advance was noticed. It was observed that for the Financial Year 2011-12 to 2013-14, ST-3 returns have been filed for the Construction of Commercial and Industrial Buildings, however, for the Financial Year 2014-15 returns have been filed for Works Contract Service. The department formed an opinion that the value taken as gross amount is in contravention of the provisions of Section 67 of the Finance Act, 1994 and also contrary to Service Tax (Determination of Value) Rules, 2006. Department was of the opinion that in terms of CBEC letter No. 334/1/2007-TRU dated 28.02.2007, the valuation method as suggested for works contract service in terms of Notification No. 24/12-ST dated 06.06.2012 would have been applicable for computing value even for Construction of Industrial and Commercial Services. With respect to the service tax liability of the Financial Year 2014-15 qua rendering Works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned that the company had regularly been audited during years prior to the year in question and nothing incriminating was found against the company. It is submitted that Shri Anil Mohan Pokhriyal has duly submitted while replying to the queries that there is no discrepancy as is alleged in the company s record. All the documents were made available to the investigating team. Nothing incriminatory was found against Shri Anil Mohan Pokhriyal nor even against Retd. Col. Swarn Kumar Makin. But the submissions have not been considered by the adjudicating authority and the penalty has been imposed without any fault of the directors and even on the company penalty has wrongly been imposed. The order of imposition of penalty is accordingly prayed to be set aside. 4.1 On behalf of company, M/s. Makin Developers Pvt. Ltd., also it is impressed upon that they were registered with the department since 08.08.08 under the category of Construction Services, other than residential complex'. They stated that three audits of their services were conducted by the Departmental Officers for the period 2008 to 2012, April, 2012 to March, 2014 and April, 2014 to March, 2015 on 10.11.12, 08-09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only the penalties imposed but also the demand confirmed. Appeals are accordingly prayed to be allowed. 5. Per contra learned DR has mentioned that the adjudicating authority has been meticulous and absolutely reasonable while passing the order under challenge in this appeal. Major portion of demand has already been dropped by the adjudicating authority itself. It has been observed, in several words, that the appellant did not disclose the quantum of taxable services rendered by them during the period specified in the impugned notice. It was only during the course of investigation that the true facts could be brought to light. Hence the case has been held to be that of deliberate and willful suppression of facts when correct details were not filed in their returns. In these circumstances, the imposition of penalty cannot be questioned. 5.1 With respect to demand of service tax from M/s Makin Developers Pvt. Ltd., it is mentioned that prior to the Negative List Regime i.e. 01.07.12, the service of Works Contract Service was defined under erstwhile Section 65(105) (zzzza) of the Finance Act, 1994 w.e.f. 01.07.07 and the service of Construction Services other than residential c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore held to be barred by time. We draw our support from the decision of Hon ble Apex Court in the case of Collector of Central Excise Vs. Chemphar Drugs Liniments reported as 1989 (40) E.L.T. 276 (S.C.), wherein it was held that extended period is applicable only when something positive other than mere inaction or failure on part of the assessee is proved. There has to be the evidence about conscious and deliberate withholding of information on part of the assessee. I observe that such evidence is missing in this case, therefore, not sustainable. 8. We further observe that Shri Anil Mohan Pokhriyal, admittedly, is not the Director of the company, he was a senior employee acting on the mandate of the directors. Otherwise also except his own statement, there is no incriminating evidence against him to prove that he had willfully suppressed the facts with an intention to evade the payment. He being the employee, question of him being the beneficiary of alleged evasion does not at all arises. Once there is absence of motive, in the light of criminal jurisprudence, mens rea cannot be attributed. The only statement of Shri Anil Mohan Pokhriyal is that he acknowledged certain differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till 30.06.12 and the party was classifying it as such in their ST-3 returns. Abatement is also held to have been rightly availed. Also that the SCN had proposed a demand running into crores but the original adjudicating authority after appreciating and accepting the contentions of the appellant has held that options of Rule 2A of Service Tax (Determination of Value) Rules, 2006 lies with the assesse and department cannot force the assessee to calculate in accordance of one of the said option. Based on these findings that major portion of demand of interest even on mobilization advance has also been dropped. Despite these findings still some demand under challenge with interest and penalty has been confirmed. In the light of the fact that department raised the demand based on compelling appellant for one option calculate despite that other available options were to be adopted as per choice of assessee and that never earlier any such objection was raised, we hold that the demand confirmed along with interest penalties against M/s. Makin Developers Pvt. Ltd. is liable to be set aside. 11. In the light of entire above discussion, the SCN is held timebarred. Findings of adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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