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TMI Blog2024 (10) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... itation could have been invoked in the facts of circumstances of the case? - HELD THAT:- It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be wilful since wilful precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax. In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT ], 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 Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act. 2. Service Tax Appeal No. 50010 of 2017 has been filed by Vigasa Industries Private Limited the appellant to assail that part of the order dated 27.09.2016 that appropriates the amount of Rs. 11,00,000/- for the period prior to 2012-13. 3. Service Tax Appeal No. 50235 of 2017 has been filed by department to assail that part of the order dated 27.09.2016 that has dropped the demand for the extended period of limitation. 4. The issue that arises for consideration in the appeal filed by the appellant is whether the amount of Rs. 11,00,000/- deposited by the appellant under protest during investigation could have been appropriated by the Commissioner in the impugned order for the period covered by the extended period of limitation, which demand was dropped by the Commissioner for the reason that the extended period of limitation could not have been invoked. Another issue that would arise for consideration is whether the extended period of limitation under the proviso to section 73(1) of the Finance Act could have been invoked. 5. Shri Sriniwas Kotni, learned counsel for the appellant assisted by Shri Akshay Kumar submitted that: (i) The Commissioner could not have app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both on merits and limitation. On receipt of a show cause notice he has every right to defend the same. The adjudicating authority held the demand/ assessment for the year 2005-06 to be time-barred. When the demand is time-barred it refers to a bar to a legal claim that arises from the lapse of a defined length of time. The essence is that the demand is disallowed or invalidated on the ground that the time limit for raising the demand has expired. When the order of assessment holds the demand to be time-barred, in effect, the assessment for that particular year is held as cancelled. 11. In the present case, even though the appellant paid the amount voluntarily prior to issuance of show cause notice, he has contested the demand. At the level of adjudication itself, the demand in respect of the period 2005-06 was set aside as being time-barred. In such a case, the appellant can claim refund of service tax as well as the interest thereon. It is submitted by the appellant that as he later received the service tax portion from the client, he is not claiming refund of the service tax portion. The appellant has confined refund claim for the interest portion only which is borne from his o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 22. Thus, in this case, though the investigation continued for about two years, no new fact came to the fore. The quantification of Service Tax liability could also not be done and at last the demand was issued on the basis of records available/best judgment. Though there is an allegation that the Noticee did not cooperate, however, it is also an admitted fact that the Noticee during this period had deposited a sum of Rs. 11,00,000/-. The Noticee, in their reply, have stated that they fully cooperated with the department and even without quantification of demand, as and when asked to deposit the amount, they deposited a sum of Rs. 11,00,000/- to safeguard Government revenue, if any. 23. I further find that for invoking extended period of limitation, the SCN-1 has alleged that the Noticee were issued several summons but they did not provide details/documents sought by the department. Thus, the case for invokation of extended period is based on the allegation that they did not provide/hide the information from the department. I find that non-furnishing of information is not a ground for invoking larger period of limitation. The extended period of limitation is not invocable for yet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is-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, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word eighteen months , the word five years has been substituted. 15. It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be wilful since wilful precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax. 16. In Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay 1995 (78) E.L.T. 401 (S.C.) , 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It does not mean any omission and the act must be deliberate and willful to evade payment of duty. The Court, further, held :- In taxation, it ( suppression of facts ) can have only one meaning that the correct information was not disclosed deliberately to escape 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. 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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