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TMI Blog2024 (5) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has not discharged the service tax liability correctly is the income earned by them for the services such as customer fee income, share application fee income, share application fee income for society, tender form fee income, transfer fee income, visit fee income etc. The department issued a show cause notice on 01.12.2015 where under a service tax amount into Rs. 94,70,439/- has been demanded under section 73(1) of the Finance Act, 1994. The interest provisions of section 75, as well as the penal provisions of section 77 and 78 of the Finance Act, 1994 has also been invoked. The matter got adjudicated by impugned order in original dated 22nd July, 2016 where under all the charges as invoked in the show cause notice has been confirmed. 2. The appellant are before us against the above mentioned impugned order in original. The learned Chartered Accountant appearing for the appellant has submitted that the appellant is registered as a co-operative society under the Gujarat Co-operative Society's Act, 1961 and they are carrying on the activity of collection, processing and marketing of the milk and milk products in the open market. 3. Its matter of record that the appellant bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ex. & S.T. (2023) 9 Centax 180 (Trib.-Ahmd) 5) JK Enterprises v. Pr. Commissioner of Central Excise (2023) 3 Centex 53 (Tri.-Delhi) 6) SHEMCO India Transport v. Commissioner of Central Excise (2023) 13 Centax 136 (Trib.-Chan) With regard to the demand of service tax on the income earned by the appellant from various activities, the learned Chartered accountant has given the following explanation. (i) Customer Fees Income: Our union is the registered co-operative society under the Gujarat Co- operative Societies Act to carry out the prime activities of procuring, processing and marketing of the milk supplied by our member mandlies. By virtue of our Bye Laws and regulations laid down by the Board of Directors, we are firstly making the market survey of the area before giving the license to prospective agent for starting the sale of the milk to our prospective customers in the area of operation. The main purpose the survey is to identify the demand of our product in nearby areas as well as to verify the properness of the place of business by the prospective agents. For which the agent has to fill the Form for getting the license of selling the milk processed by us. Customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain period. During that period if the owner of the motor vehicle wants to discontinue the contract and to appoint another person in his place, we charge nominal transfer fees as per the agreement for the breach of such contract. Therefore, the contention of AO of treating such charges as a provision of service is in contravention of the Section 65B(44) of the Finance Act, 1994. In support of my above contention, I am attaching herewith the Tender Form and Agreement of Milk Transport Contract (copies of such form and agreement are already provided to revenue during the audit and also during the adjudication procedure) [Copy attached at Page Nos. 58 to 69 of Paper Book-1]. (iv) Visit Fees Income: Sir, we are the Union Co-operative society having approx. 1200 member PCAS and by which we are getting milk from 1,20,000/- farmers/pashupalks on a daily basis. Through which we supply and sale at least 20 lacs liter of milk to Surat and Tapi District on a daily basis and therefore, we are bound to be and responsible for the checkup of Animal Health from time to time and hence, we have opened veterinary clinic consisting of 5 to 10 doctors in our socity to provide the required assista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the Section 65B(44) of the Finance Act, 1994. 4. We have also heard learned department representative who has reiterated the findings as given in the impugned order in original. 4.1 Having heard both the sides, we find that it will be appropriate to first take the contention of the appellant this in that case the extended time period is not invokable as all the activities of the appellant have been entered in their books of accounts and they have been filing their ST-3 returns regularly. 4.2 We find that the department has undertaken audit of financial books of the appellant in the month of December 2012 covering the period from April 2007 to March 2012. However, the show cause notice has been issued on 1st December 2015 by invoking extended time proviso under section 73(1) of the Financial Act, 1994. It will be appropriate to have a look at the provisions of section 73(1) before proceeding further in the matter. 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 2015 and therefore it is clear that entire period of the demand is barred by period of limitation and period from April 2007 to January 2010 is even beyond the intended time limit of five years. At the same time the department has not been able to adduce any evidence which can support the extended time proviso for demanding service tax. While holding this view we also take shelter of the following decisions of this Tribunal. 4.4. This Tribunal in case of M/s. Intercontinental Polymer Pvt Ltd Vs. Commissioner of Central Excise and Service Tax-Daman as reported under (2023) 9 CENTEX 180 (Tri. Ahm.) 4.3 The appellant have vehemently argued that the demand for the longer period is time-bar as there is no suppression of fact. We find that the demand show cause notice was issued on 11 - 11 - 2011 for the period of December, 2006 to September, 2011 by invoking the extended period. The issue is the eligibility of the Notification No. 4/2006-CE dated 1-3-2006 which has a clear condition that the goods are exempted if it is manufactured out of scrap falling under Chapter 39. The appellant have claimed the exemption notification and declared in the ER-1 return. The Revenue was not preve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of limitation, neither the assessee nor the officer is responsible for such loss of revenue. Such a loss of Revenue is the risk taken by the Board a s a matter of policy. (d) Extended period of limitation cannot be invoked unless there is evidence of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of Act or Rules with an intent. (e) Intentional and wilful suppression of facts cannot be presumed because (a) the appellant was operating under self-assessment or (b) because the appellant did not agree with the audit and claimed that CENVAT credit was admissible; or (c) because the appellant did not seek any clarification from the Revenue; or (d) because the officer did not conduct a detailed scrutiny of the Returns and the availment of CENVAT credit which is alleged to be inadmissible and was discovered only during audit. 26. We, therefore, find in favour of the appellant on the question of limitation. As the entire demand except what has been conceded by the appellant falls beyond the value period of limitation it is not necessary to examine the merits of the case." 5. In view of the above we hold that the demand for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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