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TMI Blog2023 (7) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. This Tribunal also in the case of BHAVYA ENTERPRISES (ADVERTISERS) VERSUS COMMISSIONER OF C. EX., DELHI-III [ 2005 (5) TMI 649 - CESTAT NEW DELHI ] has held that activity of space selling in print media without being engaged in making of the advertisement, is not covered in the definition of advertisement agency, hence, is not liable for service tax - there is no cogent basis of confirming the allegations of short payment of service tax merely on the basis of difference in figures noticed by the audit team. The discharge of liability with respect to the commission retained by the appellant has already been acknowledged. Demand with respect to the advertisement under works contract - HELD THAT:- The adjudicating authority has nowhere denied the composite nature of certain contracts executed by the appellant. The composite work contracts were not liable to tax prior the concept came into existence in the year 2007 as has been held by Hon ble Supreme Court in the case of Commissioner of Central Excise Customs, Kerala Vs. M/s. Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT] - The entire period of demand herein is prior 1st July, 2007. Otherwise also, the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 2. The facts in brief for the present appeal are that pursuant to an audit of the appellant s record conducted in November 2005 and on the basis of scrutiny of Balance sheets and ST-3 Returns for the period from 2001-02 to 2004-05, department noticed following issues: (i) The assessee has collected the amount in the respective years under the heading Income-Sales which is not the same as shown in the amounts realised in the relevant columns of the ST-3 Returns. (ii) The assessee has not paid service tax and education cess at applicable rates throughout the referred period which worked out to Rs.6,57,08,418/- and Rs.6,06,980/- respectively except to the tune of Rs.82,54,774/- and NIL respectively for the said period. (iii) Thus, by doing so, the assessee appears to have short levied and short paid service tax and education cess to the tune of Rs.5,74,53,644/- and Rs.6,06,980/- respectively as detailed in the Annexure-B to this notice. Accordingly, a Show Cause Notice No. 1684 dated 20.10.2006 was served upon the appellant proposing the demand of short paid service tax of Rs.5,74,53,644/- along with the education cess of Rs.6,06,980/- to be recovered from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tribunal in the case of Daelim Industrial Co. Ltd. Vs. Commissioner of Central Excise, Badodara reported as 2004 (170) E.L.T. 457 (Tri. Del). The said decision is mentioned to have been affirmed by the Hon ble Supreme Court vide its decision reported as 2004 (170) E.L.T. A181 (SC). Finally, it is submitted that all transactions have been made under invoices and the entire amount liable to service tax has been duly reflected in Books of Accounts and balance sheets of the appellant. Hence, present is not the case of rendering services with an intent to evade the payment of service tax. Thus, the adjudicating authority has committed an error while justifying the invocation of extended period of limitation. Finally objecting reduction of cum tax benefit, the appellant has prayed for the order under challenge to be set aside and appeal to be allowed. 5. While rebutting these submissions learned DR has mentioned that difference in the values of returns and balance sheets is observed to be self evident to prove that total values of balance sheets are not shown in ST-3 returns. The short payment therefore, of service tax, has rightly been confirmed. It is mentioned that the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified as follows: 2. The term canvassing may merely invoice contacting potential advertisers and persuading them to give advertisement to a particular newspaper/periodical/magazine. The making and preparation of the advertisement namely, drafting of the text, preparation of layout is left either to the advertiser or to newspaper/periodical/magazine. Such a service is known as 'space selling . In such cases, since the agency undertakes the job of merely bringing the order for an advertisement and does not undertake any further activity, it would not fall within the definition of advertising agency and will not be subjected to service tax. 9. This Tribunal also in the case of M/s. Bhavya Enterprises (Advertisers) Vs. Commissioner of Central Excise, Delhi-III reported as 2006 (1) S.T.R. 50 (Tri.Del.) has held that activity of space selling in print media without being engaged in making of the advertisement, is not covered in the definition of advertisement agency, hence, is not liable for service tax. Over and above, there is no denial that the principal advertisement agencies have been charging and paying service tax on the gross amount received by them from their clie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. 25. In fact, by way of contrast, Section 67 post amendment (by the Finance Act, 2006) for the first time prescribes, in cases like the present, where the provision of service is for a consideration which is not ascertainable, to be the amount as may be determined in the prescribed manner. 26. We have already seen that Rule 2(A) framed pursuant to this power has followed the second Gannon Dunkerley case in segregating the service component of a works contract from the goods component. It begins by working downwards from the gross amount charged for the entire works contract and minusing from it the value of the property in goods transferred in the execution of such works contract. This is done by adopting the value that is adopted for the purpose of payment of VAT. The rule goes on to say that the service component of the works contract is to include the eight elements laid down in the second Gannon Dunkerley case including apportionment of the cost of establishment, other expenses and profit earned by the service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. The returns were otherwise being filed regularly. 12. Resultantly, there remains nothing on record which may prove any positive act on part of the appellant to be called as an act of collusion or suppression of facts. We rely upon the decision of Hon ble Supreme Court in the case of Anand Nishikawa Co. Ltd. Vs. Commissioner of Central Excise, Meerut reported as 2005 (188) E.L.T. 149 (S.C.), wherein it is held as follows: 27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty, when facts were known to both the parties, the omission by one to do what he might have done not that he must have done would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment in O.K. Play (India) Ltd. v. Collector of Central Excise, Delhi-III (Gurgaon) [2005 (66) RLT 657 (SC)], held that in cases where classification lists filed by the Assessee were duly approved, the extended period of limitation would not be available to the Department. 30. For the reasons aforesaid, we are of the view that the CEGAT was not justified in holding that the extended period of limitation would be available to the Department for initiating the recovery proceedings under Section 11A of the Act on a finding that there was suppression of facts by the appellant. Accordingly, it was not open to the Excise authorities to invoke proviso to Section 11A of the Act and therefore, the demand of the Revenue must be restricted to six months prior to the issue of notice dated 19-10- 1995 instead of five years. In view of this conclusion, it is not necessary for us to consider the question of applicability of the classification lists namely of 4008.29 and 4016.19 and the question of MODVAT facilities. Accordingly, in our opinion, CEGAT came to a wrong conclusion for wrong reasons and therefore, we allow this appeal and set aside the judgment and order of the CEGAT and restor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide doubt whether service tax is payable in such situation. I further notice that Commissioner has acted as adjudicating authority and not as a Revision authority as he has issued an order-in-original and not order-in-revision and the whole tenor of the order is determining of the issue a fresh rather than revising the order. 13. We find no reason to differ from the above findings. The adjudicating authority has ignored the landmark decision of M/s. Larsen Toubro Ltd. (supra). Resultantly, we hold that extended period has wrongly been invoked by the department while issuing the show cause notice. With respect to the imposition of penalties, we hold that burden of proving the mala fide lies with the Revenue. When there is nothing on record which displays any wilful default on part of the assessee, no circumstance arises for imposition of penalty. We rely upon the decision of Hon ble Supreme Court in the case of U.O.I. vs Ashok Kumar Ors. reported as 2005 (8) SCC 760. 14. In light of the entire above discussion, we hold that the order under challenge is not sustainable. Same is hereby set aside. Consequent thereto, appeal stands allowed. [ Order pronounced in the open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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