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TMI Blog2023 (11) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... in the financial statements of the appellant. Therefore it is not a case where the income was also not recorded in financial statement and the revenue authorities found out the rendition of services on the part of the appellant basis on some other sources. It can be seen from the above that Ld. Commissioner has only observed that since the appellant did not disclose the revenue for these project in their periodical return and therefore the Ld. Commissioner has justified the invocation of extended period of limitation to confirm the demand of service tax in the present matter. Learned Commissioner has not given any ground to show that there was a deliberate attempt on the part of the appellant to suppress or to miss declare the value of service - Ld. Commissioner has not even examined the various ingredients for invocation of extended period of limitation as provided in first proviso to section 73(1) of the Finance Act 1994 - It is obsereved that on the basis of the above analysis of Section 73(1) of the Finance Act, 1994 and various decision of these tribunal and settled principle of law, the demand of service tax in the present matter beyond the period of limitation is not sust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first proviso to section 73(1) of the Finance Act, 1994. 2.5 The appellant submitted the reply to the said show cause notice. However, Learned Commissioner of Central Tax, Gandhinagar confirmed the demand of service tax on the appellant. 3. We have heard Mr. Jigar Shah and Mr. Amber Kumrawat, Learned Advocates for the Appellant and also heard Mr. Rajesh Nathan Learned Authorized Representative of the revenue. On perusal of the records and considering the arguments advanced by the Learned Advocates we find that the Appellant have largely contested the matter on the grounds that they are eligible to claim exemption under Notification No. 12/2012-ST dated 20.06.2012, and in any case the Appellant have supported the Government of India in discharge of its sovereign function and therefore, the demand of service tax is not sustainable. The Appellant have also argued the matter on the grounds of revenue neutrality and limitation. 3.1 The appellant have relied on various decisions wherein the service providers have provided services to the government and the demand of service tax was raised under business auxiliary services, business support services, photography services etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dulal K. Patel and Company. However, the Excise Authority decided against the Appellant without heeding such request. On 4-8- 88 a decision was taken by the Assistant Collector to classify the Appellant product under Tariff Heading 24.04. On 11-8-88 a sample of the Appellant product was taken by the respondents but returned within one week without testing on the ground that the issue was being finalised by the Assistant Collector. In the appeal preferred to the collector, the Appellant again raised the issue specifically that the process followed by and the product of the Appellant were identical with that of M/s. Chandulal K.P. Patel and Company and that the Appellant product should be similarly classified under Heading 24.01. While upholding the decision of the Assistant Collector, the Collector did not consider this aspect of the matter at all. The point was again taken specifically in the Appellant Appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal however dismissed the appeal and said: The Appellant have stated that some of the manufacturers who were producing similar goods, were not paying any excise duty on their production. These matters a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a subsequent period held that Service Tax cannot be levied under the category of BAS, which order of the Commissioner attained finality, the Department cannot be permitted to contend in this Appeal that Service Tax under the category of BAS can be levied upon the Appellant. 19. It also needs to be noted that the Commissioner placed reliance upon the decision of Madhya Pradesh High Court in Smart Chip and also upon the Circular dated 18 December 2006. In Smart Chip, a contract was entered into by Smart Chip and the State Government of Madhya Pradesh for carrying out various activities which were found to be covered under the category of BAS by the Department. The Tribunal found that the activity carried out by the assessee pertains to preparation of smart cards at the service centres in different offices of the Transport Department, which would not amount to any of the category of services provided for under BAS. The Madhya Pradesh High Court found that the services rendered by the assessee for the Transport Department pertains to discharge of statutory function by the Department under the Motor Vehicles Act and the same would not amount to customer care, promotion, marketing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the respondent and the respondent are providing services to M/s. Shonkh and GOM on behalf of their client namely M/s. Rosmerta. We find that the whole assertion of revenue is contrived without any appreciation of the facts involved in the case. Admittedly, the smart card for vehicle registration is issued by Government of Maharashtra. The applicant for such smart card cannot be considered as a client to be covered under BAS tax entry. The registration of vehicle is a statutory obligation and non-compliance will attract penal consequences. GOM is implementing such statutory provision. The fee for issuing such card is fixed in terms of motor vehicle regulations and as noted by the Original Authority on payment of such fee only the process of preparation of smart card can be initiated. The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work does not take away the merit that the whole process of issue of smart card for applicant is statutory function which only the Government Road Transport Authority can do. We find no scope for application of clause (vi) of Section 65(19) in the scheme of things, as discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the show cause notice. It mentions that non payment of service tax on the inputs service came to the notice of the department during the verification of the records and since the assessee is working under a self assessment regime the onus is on the assessee to assess the tax payable but it failed to discharge this onus. The appellant, therefore, suppressed facts with wilful intent to evade payment of service tax. The relevant portion of the show cause notice that seeks to invoke the extended period of limitation is as reproduced:- 9. It appears that the assessee was engaged in provision of taxable services. The non-payment of service tax on the mentioned services came to the notice only during the course of verification of records of the assessee by the officers, which would have otherwise gone unnoticed. The assessee is working under the selfassessment regime, hence, the onus of assessment of tax payable is on the assessee. They have failed to discharge this onus with willful intent to evade the payment of Service Tax. Further, it also appears that the assessee had intentionally and suppressed/concealed the facts of non-payment of Service Tax on import of Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt under Rule 6 of the CCR for extended period of five years from the relevant date . (emphasis supplied) 15. The Commissioner (Appeals), while examining this issue, observed that it was evident that the appellant had not declared the service tax liability on import of services on reverse charge basis in the ST-3 returns, which would amount to suppression of facts and if the verification of the record had not been carried out, non-payment of service tax under the reverse charge basis would have gone undetected. The relevant portion of the order passed by the Commissioner (Appeals) is reproduced below:- 11. I however find that in the era of self-assessment, the onus is also on the Appellant to reflect the complete and correct liability in their ST-3 return. Merely filing of returns in time any paying duty as declared, does not mean that all tax liabilities have been correctly discharged. In this context, the findings of AA in para 23.3 are relevant in this case: Had the department not investigated, the said taxable value would have been escaped assessment and might have resulted in non-payment of service tax . The findings of the AA are that the non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tected. 18. There is no finding by the Commissioner (Appeals) that this fact had been suppressed by the appellant with an intent to evade payment of service tax. Suppression of a fact is not enough to invoke the extended period of limitation, for there has also to be an intent to evade of payment of service tax. Though the Commissioner (Appeals) has referred to the verification carried out on 11.04.2017, but the Commissioner (Appeals) completely failed to appreciate that if this was the position, then the department could have issued the show cause notice promptly soon after 11.04.2017 and there was no necessity at all to wait till 23.06.2020 to issue the show cause notice. It also transpires from the order passed by the Commissioner (Appeals) that a usual reason has been stated for invoking the extended period of limitation by merely mentioning that had the department not conducted the verification, non-payment of service tax would have gone undetected and that in the era of selfassessment, it is the duty of the appellant to state the correct facts. 19. The contention of the learned counsel for the appellant is that the necessary ingredients for invoking the larger perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se why he should not pay amount specified in the notice. 22. The relevant date‟ has been defined in section 73 (6) of the Finance Act as follows; 73(6) For the purpose of this section, relevant date means,- (i) In the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short paid- (a) where under the rules made under this Chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made thereunder; 23. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. The observations are as follows; 4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emphasis supplied) 28. These two decisions in Pushpam Pharmaceuticals and Anand Nishikawa Company Ltd. were followed by the Supreme Court in the subsequent decision in Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (SC)] - 2013-VIL- 09-SC-CU and the observation are: 18. We are in complete agreement with the principal enunciated in the above decisions, in light of the proviso to section 11A of the Central Excise Act, 1944. 29. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) E.L.T. 177 (SC)] - 2007-VIL-40-SC-CE also 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereunder with an intent to evade payment of service tax. However, the impugned show cause notice does not contain any allegation of fraud, collusion, or wilful misstatement on the part of MTNL. The impugned show cause notice alleges that the extended period of limitation is applicable as MTNL had suppressed the material facts and had contravened the provisions of the Act with an intent to evade service tax. Thus, the main question to be addressed is whether the allegation that MTNL had suppressed material facts for evading its tax liability, is sustainable. xxxxxxxxx 41. In the facts of this case, the impugned show cause notice does not disclose any material that could suggest that MTNL had knowingly and with a deliberate intent to evade the service tax, which it was aware would be leviable, suppressed the fact of receipt of consideration for rendering any taxable service. On the contrary, the statements of the officials of MTNL, relied upon by the respondents, clearly indicate that they were under the belief that the receipt of compensation/financial support from the Government of India was not taxable. Absent any intention to evade tax, which may be evident from any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment and, during the adjudication proceedings and is before us that it is entitled to the CENVAT credit. Thus, we find that it is a case of difference of opinion between the appellant and the Revenue. The appellant held a different view about the eligibility of CENVAT credit than the Revenue. Naturally, the appellant self- assessed duty and paid service tax as per its view. Such a selfassessment, cannot, by any stretch of imagination, be termed deliberate and wilful suppression of facts. 16. Another ground for invoking extended period of limitation given in the impugned order is that the appellant was operating under selfassessment and hence had an obligation to assess service tax correctly and take only eligible CENVAT credit and if it does not do so, it amounts to suppression of facts with an intent to evade and violation of Act or Rules with an intent to evade. We do not find any force in this argument because every assessee operates under selfassessment and is required to self-assess and pay service tax and file returns. If some tax escapes assessment, section 73 provides for a SCN to be issued within the normal period of limitation. This provision will be rendered otio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no other ground on which the extended period of limitation can be invoked. Evidently, fraud, collusion, wilful misstatement and violation of Act or Rules with an intent all have the mens rea built into them and without the mens rea, they cannot be invoked. Suppression of facts has also been held through a series of judicial pronouncements to mean not mere omission but an act of suppression with an intent. In other words, without an intent being established, extended period of limitation cannot be invoked. In Pushpam pharmaceuticals company vs Collector of Central Excise Mumbai [1995 (78) E.L.T. 401 (S.C.)] - 1995-VIL-05-SC-CE, the Supreme Court examined Section 11A of the Central Excise Act, 1944 which was worded similar to Section 73 of the Finance Act, 1994 and held as follows : 4. Section 11A empowers the Department to reopen proceedings if the levy has been short-levied or not levied within six months from the relevant 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 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, disputes the liability and seeks a notice or an adjudication order. This does not prove any intent to evade or deliberate or wilful suppression of facts. 16. Another ground for invoking extended period of limitation given in the impugned order is that the appellant was operating under self-assessment and hence had an obligation to assess service tax correctly and take only eligible CENVAT credit and if it does not do so, it amounts to suppression of facts with an intent to evade and violation of Act or Rules with an intent to evade. We do not find any force in this argument because every assessee operates under self-assessment and is required to self-assess and pay service tax and file returns. If some tax escapes assessment, section 73 provides for a SCN to be issued within the normal period of limitation. This provision will be rendered otiose if alleged incorrect self-assessment itself is held to establish wilful suppression with an intent to evade. To invoke extended period of limitation, one of the five necessary elements must be established and their existence cannot be presumed simply because the assessee is operating under self-assessment. 17. The argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut for the audit, the allegedly irregularly availed CENVAT credit would not have come to light. It is incorrect to say that but for the audit, the alleged irregular availment of CENVAT credit would not have come to light. It is undisputed that the appellant has been self-assessing service tax and filing ST-3 Returns. Unlike the officers, the assessee is not an expert in taxation and can only be expected to pay service tax and file returns as per its understanding of the law. The remedy against any potential wrong assessment of service tax by the assessee is the scrutiny of the Return and best judgment assessment by the Central Excise Officer under section 72. This section reads as follows: 72. Best judgment assessment. If any person, liable to pay service tax,- (a) fails to furnish the return under section 70; (b) having made a return, fails to assess the tax in accordance with the provisions of this Chapter or rules made thereunder, the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced below : It is the view that assessment should be the primary function of the Central Excise Officers. Selfassessment on the part of the taxpayer is only a facility and cannot and must not be treated as a dilution of the statutory responsibility of the Central Excise Officers in ensuring correctness of duty payment. No doubt, audit and anti-evasion have their roles to play, but assessment or confirmation of assessment should remain the primary responsibility of the Central Excise Officers. (emphasis supplied) 22. Therefore, to say that had the audit not been conducted, the incorrect availment of CENVAT credit would not have come to light is neither legally correct nor is it consistent with the CBEC's own instructions to its officers. 23. For the sake of completeness, it needs to be pointed out that the aforesaid Manual provides for two levels of scrutiny reliminary scrutiny of all Returns and Detailed Scrutiny of some Returns selected based on some criteria laid down in it. Relevant extracts of the manual are as follows: 1.2A Service Tax administration has had the benefit of building on the experience of Central Excise administration which is an old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns' scrutiny would become the core function of the Service Tax Group/Range, supervised by the Assistant Commissioner of the Service Tax Unit. 24. Thus, the CBEC took a conscious decision that detailed scrutiny of the Returns should be done only in some cases selected based on some criteria. In those Returns, where detailed scrutiny is not done by the officers some tax may escape assessment which may not be discovered within the normal period of limitation. As a matter of policy, the CBEC, took such risk and the loss of Revenue is a result of the policy. 25. To sum up: a) The appellant assessee was required to file the ST 3 Returns which it did. Unless the Central Excise officer calls for documents, etc., it is not required to provide them or disclose anything else. b) It is the responsibility of the Central Excise Officer with whom the Returns are filed to scrutinise them and if necessary, make the best judgment assessment under section 72 and issue an SCN under Section 73 within the time limit. If the officer does not do so, and any tax escapes assessment, the responsibility for it rests on the officer. c) Although the Central Excise Officer is em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance 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 paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: PROVIDED that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of- (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had suppressed facts. Even otherwise, learned counsel submitted, that suppression has to be wilful with an intent to evade payment of service tax, if the extended period of limitation has to be invoked by the Department, but the Commissioner observed that it would be possible to invoke the extended period of limitation even in a situation where there is no intent to evade payment of service tax. 21. 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. Learned Authorized Representatives also submitted that even if it is held that the extended period of limitation could not be invoked, then too, the demand could have been confirmed under 73A of the Finance Act as there is no limitation provided under the said section. 22. The Commissioner has not observed that the ST-3 returns filed by the appellant did not reflect the payment of service tax by the appellant on works contract services and availment of CENVAT credit thereon, nor any submission has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to the duty specified in the notice. 26. In Pushpam Pharmaceuticals Company, the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. The observations are as follows; 4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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. (emphasis supplied) 28. These two decisions in Pushpam Pharmaceuticals and Anand Nishikawa Company Ltd. were followed by the Supreme Court in the subsequent decision in Uniworth Textile Limited vs. Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (SC) - 2013-VIL- 09-SC-CU] and the observation are: 18. We are in complete agreement with the principal enunciated in the above decisions, in light of the proviso to section 11A of the Central Excise Act, 1944. 29. The Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh-I [2007 (216) E.L.T. 177 (SC) - 2007-V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ful to refer to a decision of the Tribunal in Shiv-Vani Oil Gas Exploration Services Ltd. vs. C. S. T., New Delhi [2017 (47) STR 200 (Tri-Del.) - 2016-VIL-769-CESTAT-DEL-ST], wherein the Tribunal after making reference to the decision of the Supreme Court in Cosmic Dye Chemical vs. CCE, Bombay [1995 (75) E.L.T. 721 (SC) - 1994- VIL-19-SC-CE], observed that there should be an intent to evade payment of service tax if the extended period of limitation has to be invoked. The observations are as follows: 8. Regarding the demand for extended period, we find the reason given by the Original Authority is not legally sustainable. In fact he recorded that in terms of proviso to Section 73 of Finance Act, 1994, the intention to evade payment of duty is not required to invoke extended period or to impose penalty. We find that for invoking extended period as well as for imposing penalty under Section 78, the legal provisions are identical. The words used like fraud, collusion, willful mis- statement, suppression of fact or contravention of any provisions of Chapter V of Finance Act, 1994 or of the Rules made thereunder with intent to evade the payment of Service Tax, will show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on contemplated under the proviso to section 73(1) of the Finance Act. 34. The submission advanced by the learned Authorised Representatives by the Department that even if it were to be held that the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act could not be invoked, then too the demand can be confirmed under section 73A of the Finance Act now needs to be examined. 3.8 We also note that the above decision of the tribunal is affirmed by Hon ble Delhi High Court as reported in 2023-VIL-109-DEL-ST wherein the revenue department s appeal was dismissed with following observations : 10. The impugned order is premised on two grounds. First, that the proceedings under Section 73 of the Act could not be initiated as it was beyond the period of limitation as stipulated in that section. The learned Tribunal had noted that the questions whether the respondent was required to deposit the entire amount collected as service tax with the authorities in cash in terms of Section 73A of the Act, did not arise, as the Commissioner had dropped the proceedings under Section 73A of the Act and had confined the demand under Section 73(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Act, was not confirmed by the learned Commissioner in his order- in-original. Accordingly, the learned Tribunal held that, in the absence of a cross-appeal by the Department, it would not be possible to confirm any demand under Section 73A of the Act. 15. We find no infirmity with the aforesaid view and thus, Question Nos. (V) and (VI), as projected by the Revenue and as noted in paragraph no. 8 above, are answered in the negative. 16. As observed above, prima facie, the question whether the respondent has wrongfully availed the Cenvat Credit would arise only if the respondent had a liability to pay service tax and had wrongfully reduced the same by claiming the Cenvat Credit. However, the said question does not arise for consideration in the present appeal. Whereas the learned Commissioner has held that the Cenvat Credit had been erroneously claimed and was liable to be recovered under Section 73(1) of the Act, the learned Tribunal had confined its examination to the jurisdiction of the Commissioner to make any such demand under Section 73(1) of the Act as being barred by limitation. 17. According to the Revenue, the extended period of limitation as provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent; or suppression of facts; or contravention of the provisions of the Act and the Rules made thereunder with the intention to evade payment of service tax. In the present case, there is no allegation of any fraud or collusion. It is also apparent from the order-in- original that the Commissioner had proceeded on the basis that the proviso would be applicable notwithstanding that there was no intent on the part of the respondent to evade any tax. The Commissioner had proceeded on the basis that the extended period of limitation was applicable on account of suppression of facts and wilful mis-statements . 20. In the circumstances, the Tribunal had examined the question whether the proviso to Section 73(1) of the Act was applicable on account of any wilful mis-statement or suppression of facts. According to the respondent, the services rendered by it were covered under the taxable service of 'Works Contract' Services. It had, accordingly, filed its return disclosing that its services were covered under Section 65(105)(zzzza) of the Act. 21. Clearly, there was no suppression as to the activities being carried out by the respondent. It is also relevant to note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 course 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 added) 24. The aforesaid decision was followed by the Supreme Court in its later decision in Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut: 2005 (7) SCC 749 - 2005-VIL-32-SC-CE. The learned Tribunal had, inter alia, referred to the aforesaid decisions as well as the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 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. 27. In view of the authoritative decisions rendered by the Supreme Court, the learned Tribunal held that the Commissioner had erred in holding that the respondent had suppressed information from the Department regarding payment of service tax. 28. We concur with the finding of the learned Tribunal that in the given facts, the proviso to Section 73(1) of the Act could not be applied. The respondent had filed its return of service tax on the basis that its services were taxable as 'Works Contract' Services. It had availed the Cenvat Credit to the extent of ₹2,44,48,095/- and had paid the balance amount in cash in discharge of the liability, which was computed on the aforesaid basis. There is no allegation that the respondent had concealed that it was carrying on the activity of construction and selling residential flats. 3.9 We also note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Noticee fail in supporting this contention of the Noticee. 3.11 It can be seen from the above that Ld. Commissioner has only observed that since the appellant did not disclose the revenue for these project in their periodical return and therefore the Ld. Commissioner has justified the invocation of extended period of limitation to confirm the demand of service tax in the present matter. Learned Commissioner has not given any ground to show that there was a deliberate attempt on the part of the appellant to suppress or to miss declare the value of service. Ld. Commissioner has not even examined the various ingredients for invocation of extended period of limitation as provided in first proviso to section 73(1) of the Finance Act 1994.We observe that on the basis of the above analysis of Section 73(1) of the Finance Act, 1994 and various decision of these tribunal and settled principle of law we are of the clear view that the demand of service tax in the present matter beyond the period of limitation is not sustainable. We observe that the demand in the present matter is for the period 2016-17 and April 2017 to June 2017 and the show cause notice is issued on 27.08.2020. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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