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TMI Blog2025 (1) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... intent to evade payment of service tax, is against the well settled principles. Suppression of facts has to be primarily examined whether it was wilful and with an intent to evade payment of service tax. Hon ble Supreme Court has held that suppression of facts has to be wilful‟ and there should also be an intent to evade payment of service tax. The Hon ble Supreme Court in Pushpam Pharmaceuticals Company, 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 Hon ble Court observed that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax of Rs. 5,75,924/- under reverse charge on sales commission paid to foreign agents for the period Sept. 2013 to Sept., 2014. Therefore, the SCN dated 30.08.2016 was issued to the Appellant proposing recovery of such inadmissible Cenvat credit of Rs.1,16,924/- and also for demand of Service tax of Rs.5,75,134/- along with applicable interest and alleging penalty under Rule 15 of the Cenvat Credit Rules, 2004 and under section 78 of the Finance Act, 1994. The subject show cause notice was adjudicated by the Assistant Commissioner of Service Tax Division, Bhiwadi vide Order-In-Original No. 17/CE/2017-18 dated 29.11.2017, wherein adjudicating authority has confirmed the demand of Cenvat credit of Rs. 1,16,924/- and service tax demand of Rs.5,75,134/-; imposed penalty of Rs.1,16,924/- under Rule 15 of the Cenvat Credit Rules, 2004 Rs.5,75,134/- under Section 78 of the Finance Act, 1994. Aggrieved by the said O-1-O, the Appellant has filed an appeal before Commissioner Appeals, Jaipur. The Commissioner vide Order-in-Appeal No. 394(SM)/CE/JPR/2018 dated 31.08.2018, upheld the Order-in-Original and rejected the Appeal filed by the appellant. Aggrieved by the said Order-in-Appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oundation Joint Venture Vs. CCE Chandigarh. [2007 (216) E.L.T. 177 (SC)] 3.1 Ld Counsel contended that suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of tax. Since the basic ingredients for invoking extended period under Section 73 of Finance Act, 1994 and Section 11 of Central Excise Act do not, therefore, stand satisfied; the demand is liable to be dropped on this ground alone. Since there was no suppression of facts and there was no intent to evade payment of Service tax, the extended period for demand is not justified. There is no positive act of suppression on the part of the Appellant. The Appellant acted in bona fide belief and it is not a case of fraud, collusion, wilful mis-statement or suppression of facts or contravention of the provisions with intention to evade tax. The entire demand is beyond the normal period of limitation is therefore, not sustainable in the present case. 4. Learned counsel for the appellant submitted that the period involved is September 2013 to September 2014 and during the said period, the Place of Provision of Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directly in manufacture and are covered within ambit and scope of definition of input service . It is well-settled that substantial benefit cannot be denied on procedural lapse. Reliance was placed on the decision of the Supreme Court dated 20th November 2008 in case of Sambhaji Ors. Versus Gangabsal Ors. The demand on ground that credit on bills pertaining to period prior to 01.09.2014 was availed after 6 months from the date of invoice is also not sustainable as there is no bar/ restriction on the availment of CENVAT credit services received prior to 1.9.2014 against bills which are above 6 months and below one year from the date of issue of bills or invoices. Even the time period of 6 months was subsequently amended to one year and this amendment is applicable with retrospective effect as it is a clarificatory amendment. 6. Learned counsel submitted that since the demand of service tax and CENVAT Credit itself is not sustainable, the demand of interest is also not justified. The imposition of penalty does not arise in the present case is not a case of non-payment or evasion of tax/duty by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contrave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt were outside the scope of Intermediary at that time and place of provision of service is required to be decided in terms of Rule 3. In such cases, the location of the receiver of the service i.e. service recipient would be the place of provision of service. In view of the above, ld. Authorized Representative prayed that present appeal may be dismissed. 8. We have heard the LD Counsel to the appellant and Ld AR for the department. The issued before us for consideration are as follows: i. Whether the demand of service tax vide SCN dated 06.01.2017 on payment made to commission agents on export of goods for period September 2013 to September 2014 under reverse charge, which is a case of Revenue Neutrality as the appellant was entitled to input credit, is time barred as extended period under proviso to Section 73(1) of Finance Act, 1994 is not applicable? ii. Whether the demand of service tax of Rs. 5,75,134/-on intermediary service provided by commission agents located outside India during the period September 2013 to September 2014 is sustainable on merits? iii. Whether demand for denial of CENVAT Credit of Rs. 116924/-availed during 2013-14 and 2014-15 is sustainable? iv. Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. The Hon ble Court observed that 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 relevant para is reproduced hereinafter: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. We also note that 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)]. Further, the Supreme Court in Continental Foundation Joint Venture Holding vs. Commissioner of Central Excise, Chandigarh [2007 (216) E.L.T. 177 (SC)] 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 not render it suppression. 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 wilful misstatement. The latter implie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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