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TMI Blog2023 (12) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... t site - the department would have come across the figures declared as exempted services , while perusing the ST-3 returns for issuing earlier SCN by invoking extended period. Therefore all information when available before the department a second show cause notice alleging suppression of facts cannot sustain. The department when equipped with all facts as declared in the ST-3 returns ought to have initiated proceedings on all grounds in the first SCN itself. In regard to work order issued by M/s.Comtech to the appellant for whom welding, fabrication for ship building works were carried out a letter dt. 03.07.2008 is issued by M/s.L T Ltd. (customer) stating that the activity does not involve rendering of services and would fall under manufacture as under Section 2(f) of Central Excise Act, 1994. So also, on perusal of the work orders, the activity rendered by the appellant for the other two customers appears to be identical - The appellant is a sub-contractor of M/s.Comtech, M/s.DR Associates and M/s.Espee Tech. The issue as to whether sub-contractor is liable to discharge service tax was under litigation. During the relevant period, The Board vide its Circular No.23/3/97-S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that the appellant has suppressed facts with intent to evade payment of service tax, since the Department had issued an earlier SCN invoking extended period alleging suppression of facts with intent to evade payment of service tax, the second show cause notice invoking extended period on the basis of the very same ST-3 returns for short payment of service tax cannot sustain. 2.1 The learned counsel pointed out that work orders were issued to appellant by three contractors. In the case of M/s.Comtech the work order was issued for fabrication, welding etc. to be executed at the premises of M/s. L T Ltd. The welding and fabrication works were done at the site of M/s.L T in regard to making of a ship. The activity was in the nature of manufacture and the appellant was advised by M/s.L T that no service tax is to be paid as the activity falls under manufacture as per Section 2(f) of the Central Excise Act, 1944. The appellant therefore included these amounts as exempted services in their returns. Further, M/s.Comtech was the main contractor engaged by M/s.L T and the appellant was the sub- contractor. A demand of service tax was raised against M/s.Comtech and later M/s.Comtech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich includes the value of service provided by the sub-contractor also. Ld. Counsel drew assistance of the order of the Tribunal in Sharma Decorators Vs CST Delhi - 2023 (3) TMI 351 CESTAT NEW DELHI to support the very same argument. 2.5 The decision in the case of Nizam sugar Factory Vs CCE A.P - 2006 (197) ELT 465 (SC) was relied by the counsel to argue that when the department was having the knowledge of the facts and has issued SCN invoking the extended period, the second SCN on the basis of same set of facts invoking extended period is not sustainable. Ld. Counsel prayed that the appeal may be allowed. 3. Ld. A.R Sri Harendra Singh Pal appeared and argued for the Department. The findings in para 18 19 of the OIO was reiterated by Ld. A.R. It is explained by the Ld. A.R that the non-payment of service tax would not have come to notice if the Audit had not examined the accounts of the appellant. The present demand is made under MRSA Service whereas the earlier demand was made under WCS and therefore, invocation of extended period by the second SCN is legal and proper. Ld. A.R prayed that the appeal may be dismissed. 4. Heard both sides. 5. The issue that arises for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the first SCN itself. The Hon ble Apex Court in the case of Nizam Sugar Factory (supra). observed as under : 8. Without going into the question regarding Classification and marketability and leaving the same open, we intend to dispose of the appeals on the point of limitation only. This Court in the case of P B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in (2003) 3 SCC 599 = 2003 (153) E.L.T. 14 (S.C.) has taken the view that in a case in which a show cause notice has been issued for the earlier period on certain set of facts, then, on the same set of facts another SCN based on the same/similar set of facts invoking the extended period of limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the department. It was observed in para 14 as follows : 14. We have indicated above the facts which make it clear that the question whether M/s. Pharmachem Distributors was a related person has been the subject-matter of consideration of the Excise authorities at different stages, when the classification was filed, when the first show cause notice was issued in 1985 and also at the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of limitation would thus not be available. We are unable to accept the submission that earlier Show Cause Notice was for a subsequent period and/or it cannot be taken into consideration as it is not known when that Show Cause Notice was dropped. If the Department wanted to take up such contentions it is for them to show that that Show Cause Notice was not relevant and was not applicable. The Department has not brought any of those facts on record. Therefore, the Department cannot now urge that findings of the Collector that that Show Cause Notice was on a similar issue and for an identical amount is not correct. 9. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with the view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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