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TMI Blog2025 (2) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... d from payment of service tax. Therefore, the demand of Rs.33,04,058/- is liable to be set aside. Demand of service tax on availing Legal and Manpower Supply service - Extended period of limitation - HELD THAT:- A similar matter of limitation had come up for consideration before the Division Bench of this Tribunal in the case of G. D. Goenka Pvt. Ltd. [2023 (8) TMI 995 - CESTAT NEW DELHI]. In the said case, the demand had been raised consequent to audit. The extended period of limitation was invoked on the ground that under self assessment, the Appellant assessee was required to assess its own tax due on the services provided by it and file returns under Section 70. By claiming the wrong Cenvat credit, the Appellant willfully and deliberately suppressed the facts from the Department. The Division Bench referred to the decision of the Hon'ble Supreme Court in the case of Pushpam Pharmaceuticals Company Vs. CCE, Mumbai [1995 (3) TMI 100 - SUPREME COURT] and made detailed observation for holding that extended period of limitation could not have been invoked. Thus, the Appellant's case on limitation is squarely covered by aforesaid order of the Division Bench of the Tribunal. Respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 77(2) of the Act, on account of non payment of service tax correctly. 4. The Appellant by way of the aforesaid appeal have challenged following demands and corresponding imposition of penalty under Sections 78 and 77(2) of the Act, 1994. (a) Short payment of service tax Rs.33,04,058/- (b) Non payment of service tax on availing Legal services Rs.2,512/- (c) Non payment of service tax on availing Manpower supply service. Rs.5,747/- (d) Total Rs.33,12,317/-. 5. The learned Chartered Accountant appearing on behalf of the Appellant submitted that the service tax of Rs.33,04,058/- has been demanded on gross amount of Rs.2,20,26,953/-; that the said differential amount of Rs.2.2 crore pertained to the amount received from DRDA and Gorakhpur Development Authority towards construction of road. All these payments have been released out of MP/MLA funds. He drew my attention to page 44 of the appeal paper book wherein there are several entries relating to receipt of funds for construction of road. He further submitted that construction of road has remained exempted under entry 13(a) of Notification No.25/2012 dated 20.06.2012. As regards short payment of service tax for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... road transportation for use by general public. I hold that the said amount of Rs.2.20 crore having been received towards construction of road was exempted from payment of service tax. Therefore, the demand of Rs.33,04,058/- is liable to be set aside. 10. On the issue of demand of service tax Rs.8,259/- on availing Legal and Manpower Supply service, the Appellant have not challenged the demand on merit. It has however been submitted that they have regularly been paying service tax and were eligible for its Cenvat credit. Therefore, the entire demand is revenue neutral. It has also been submitted that demand is barred by limitation in as much as SCN has been issued much after the normal period of limitation of 30 months. I find that some of the services provided by the Appellant are exempted from payment of service tax. Therefore, demand of service tax on availing Legal and Manpower Supply service cannot be considered to be revenue neutral. However, the issue of limitation is being dealt with separately. Appellant have vehemently argued that for demanding service tax for the period from April, 2014 to June, 2017, SCN had been issued on 30.06.2020 and that the entire demand is barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit would not have come to light. It is incorrect to say that but for the audit, the alleged irregular availment of CENVAT credit would not have come to light. It is undisputed that the Appellant has been self-assessing service tax and filing ST-3 Returns. Unlike the officers, the assessee is not an expert in taxation and can only be expected to pay service tax and file returns as per its understanding of the law. The remedy against any potential wrong assessment of service tax by the assessee is the scrutiny of the Return and best judgment assessment by the Central Excise Officer under Section 72. This Section reads as follows:- "72. Best judgment assessment. If any person, liable to pay service tax,- (a) fails to furnish the return under Section 70; (b) having made a return, fails to assess the tax in accordance with the provisions of this Chapter or rules made thereunder, the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as a dilution of the statutory responsibility of the Central Excise Officers in ensuring correctness of duty payment. No doubt, audit and anti-evasion have their roles to play, but assessment or confirmation of assessment should remain the primary responsibility of the Central Excise Officers. (emphasis supplied) 22. Therefore, to say that had the audit not been conducted, the incorrect availment of CENVAT credit would not have come to light is neither legally correct nor is it consistent with the CBEC's own instructions to its officers." 12. Finally the Division Bench allowed the appeal on limitation by summing up its observation in para 25 as under :- "To sum up: a) The Appellant assessee was required to file the ST 3 Returns which it did. Unless the Central Excise officer calls for documents, etc., it is not required to provide them or disclose anything else. b) It is the responsibility of the Central Excise Officer with whom the Returns are filed to scrutinise them and if necessary, make the best judgment assessment under Section 72 and issue an SCN under Section 73 within the time limit. If the officer does not do so, and any tax escapes assessment, the respons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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