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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 ..... crutiny 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 the appellant along with the proportionate interest and the appropriate penalties. The said proposal has been confirmed by the original adjudicating authority. Being ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 adjudicating authority after thoroughly analysing Section 67 of the Act with Section 65(105)(e) of the Act has held that appellant being an advertising agency are required to pay service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 clients. We observe that the adjudicating authority has failed to consider the clarifications put forth by the appellant and even the decisions rendered by the Tribunal. Thus, we observe that Judicial p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment (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 provider as is relatable only to supply of labour and services. And, where value is not determined having regard to the aforesaid parameters, (namely, in those cases where the books of account of the contractor are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation 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 restore the order of the Commissioner." In another decision of this Tribunal in the case of Sands Hotel Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai reported as 2009 (16) S.T.R. 329 (Tri. Mumbai), wherein it is held as follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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