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TMI Blog2024 (6) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... d order the learned Commissioner further directed to appropriate the amount of Rs.24,11,299/- (alongwith interest of Rs.88,123/-) paid in respect of free of cost (FOC) supply for the contract commencing after 07.07.2009, subject to the verification on production of challan within 15 days, which the appellant submitted to the jurisdictional Assistant Commissioner with details and challan copies. 2.1 Briefly stated facts of the case are that the appellant is engaged in providing services under the category of "Works Contract". A show cause notice dated 11.09.2012 was issued to the appellant alleging that they were not entitled to the concessional rate of service tax @4% as provided under the Composition Scheme as they have not added the value of free materials supplied by the service recipients in the taxable value and therefore, they were liable to pay service tax as specified under Section 66 of the Finance Act, 1994 i.e. @12.36% for the period 2007-08 to 2008-09 and @10.36% for the period 2009-10 to 2011-12. Accordingly, vide the show cause notice dated 11.09.2012, service tax amounting to Rs.2,15,86,841/- short paid by them was proposed to be recovered by invoking the extended p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Supreme Court in case of CCE vs. L&T Ltd - (2016) 1 SCC 170; and thirdly, it has been held that FOC will not be added in view of the decision of Hon'ble Supreme Court in the case of CST vs. Bhayana Builders (P) Ltd - (2018) 3 SCC 782. 4.5 The learned Counsel further submits that the Department has alleged that the FOC is not added for the period on or after 07.07.2009, while opting for the composition scheme and making service tax payment @4%. However, service tax on the FOC with interest was paid, as recorded by the Adjudicating Authority and the said amount of service tax with interest was paid from 08.05.2012 to 30.06.2012 prior to issuance of show cause notice and these facts have been duly recorded by the Adjudicating Authority and not disputed at all. Therefore, confirmation of demand is bad in law. 4.6 The learned Counsel further submits that the Department has alleged that appellant wrongly paid service tax @4% under composition scheme, whereas they were required to pay service tax at full rate i.e. 12.36% (for the period 2007-08 to 2008-09) and 10.3% (for the period 2009-10 to 2011-12) on the value determined as per Rule 2A of the Service Tax (Determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the show cause notice nor there was any such contrary evidence. 4.8 The learned Counsel also submits that the service tax has been demanded by taking figures highest from Form 26AS, Balance Sheet and ST-3 Returns; and on full value of composite contract including value of materials, which is not permitted in law in view of the catena of decisions passed by the Tribunal and the higher courts. For this submission, he relies on the following decisions: * Kush Constructions vs. CGST, Nacin - 2019 (34) GSTL 606 (Tri. All.) * Rajmohan vs. CGST, Panchkula - in Appeal No. ST/60185/2021 - Final Order dated 08.08.2022 passed by CESTAT Chandigarh * Shresth Leasing & Finance Ltd vs. CCE - 2023 (68) GSTL 143 (Tri. Ahmd.) * Synergy Audio Visual Workshop Pvt Ltd vs. CST, Bangalore - 2008 (10) STR 578 (Tri. Bang.) 4.9 The learned Counsel further submits that the demand has been wrongly confirmed by invoking the extended period of limitation which is not invokable in the facts and circumstances of the case. In this regard, he submit that firstly, the allegations in show cause notice for invoking the extended period are - "(i) did not take registration on time, (ii) did not file ST-3 ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Finance Act, 2013 w.e.f. 10.05.2013 by inserting sub-section (2A), after the period in dispute, which permits, if extended period allegation could not be established, service tax could be demanded for normal period. 4.11 As regards penalty under Section 78, the learned Counsel submits that once extended period is not invokable, the penalty under Section 78 is also not leviable as ingredients for invoking extended period and levying penalty under Section 78 are same. 4.12 The learned Counsel also submits that the appellant is entitled for the benefit of waiver of penalty in terms of Section 80 of the Act, as it was prevalent at the relevant time. The Tribunal has waived the penalty in such cases, in terms of Section 80 of the Act; therefore, the penalties under Sections 77 & 78 are also not leviable. 5.1 On the other hand, the learned AR for the Revenue reiterates the findings of the impugned order and submits that the appellant is not entitled to abatement under the Notification No. 1/2006-ST dated 01.03.2006 because they have not included the cost of free supplies in the gross amount on which service tax is payable. 5.2 The learned AR also refers to the statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with any eventuality whereby value of goods and material supplied or provided by the service recipient were also to be included in arriving at "gross amount charged". 7. Further, we note that in this case, the entire demand has been raised and confirmed merely by relying upon Form 26AS, Balance Sheet and ST-3 Returns, which is not permitted under law in view of the various decisions relied upon by the appellant cited supra. In this regard, we may refer to the decision in the case of Kush Constructions (supra), wherein the Division Bench of the Tribunal has held as under: "On perusal of record, we note that the appellants were registered with the Service Tax Department and also they were filing ST-3 returns. Revenue has compared the figures reflected in the ST-3 returns and those reflected in Form 26AS filed in respect of the appellant as required under the provisions of Income-tax Act, 1961. We note that without further examining the reasons for difference in two, Revenue has raised the demand on the basis of difference between the two. We note that Revenue cannot raise the demand on the basis of such difference without examining the reasons for said difference and withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice is based on Audit, the extended period of limitation cannot be invoked. In this regard, we may refer to the decision of Delhi Bench of this Tribunal in the case of Sunshine Steel Industries vs. CGST, Jodhpur - (2023) 8 Centax 209 (Tri. Del.), wherein this issued was considered in details after considering the various decisions of the High Courts and the Supreme Court. It is pertinent to reproduce the relevant findings from para 27 to para 34, which are reproduced herein below: "27. This apart, as noticed above, the show cause notice only alleges that the appellant had suppressed facts. It does not allege that the appellant had suppressed facts with intent to evade payment of excise duty. In the absence of any allegation made in the show cause notice that the appellant had suppressed facts with intent to evade payment of duty, the Department could not have invoked the extended period of limitation under section 11A(4) of the Act. This issue was raised by the appellant before the Commissioner (Appeals), but no finding has been recorded. 28. The provisions of section 11A(4) of the Excise Act came up for interpretation before the Supreme Court in Pushpam Pharmace ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lful suppression. Therefore, in view of our findings made hereinabove 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 the proviso to Section 11-A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts." (emphasis supplied) 31. In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore , the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation. 32. The aforesaid decisions of the Supreme Court were relied upon by the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In such circumstances, the extended period of limitation could not have been invoked. The demand, which covers only the extended period of limitation, therefore, could not have been confirmed." This decision of the Tribunal has been upheld by the Hon'ble Apex Court as reported in (2023) 8 Centax 210 (SC) = 2023 (385) ELT 826 (SC). 12. Further, in the case of Infinity Infotech Parks Ltd vs. UOI & Ors (supra), it has been held that when the extended period of limitation is not invokable, the demand cannot be confirmed for the normal period of limitation for some of the same transactions. Though, there is the amendment in Section 73 made by the Finance Act, 2013 w.e.f. 10.05.2013 by inserting sub-section (2A); but period of dispute in the present case is prior to that. Therefore, this amendment will not be applicable in the present case. 13. Further, when the extended period is not invokable, the penalty under Section 78 of the Act is also not leviable since ingredients for invoking extended period and levying penalty under Section 78 are same. 14. In view of our discussion above and by following the ratios of the various decisions cited supra, we are of the considered opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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