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TMI Blog2025 (2) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... er circular dated 10th March, 2017 read with an instruction dated 21st December, 2015 issued by the CBEC in terms of which a pre-show-cause notice consultation was mandatory in cases involving demand of duty above Rs. 50 lakhs. A reminder was again sent by the petitioner on 13th November 2018. When no response was received, the writ petition was filed in the High Court of Delhi on 13th December, 2018. It appears that Hon'ble Delhi High Court not only entertained the writ application but also rejected the contention of the respondent that since the SCN was preceded by a search that was conducted in the business premises of the petitioner and the petitioner also rendered itself liable for penal action 'for suppression of facts and contravention of various statutory provisions with intent to evade payment of due service tax' and other incidental levies, the SCN partakes of the character of an 'offence related' SCN and therefore falls within the exceptions carved out under para 5.0 of the master circular. In the case of Cosmic Dye Chemical [1994 (9) TMI 86 - SUPREME COURT], the matter reached to the Hon'ble Supreme Court only after final adjudication by the Tribunal failed. The Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... license fee of which the petitioner pays to railways for getting a license of caterers in the Reverse charge Mechanism?" 2. The petitioner in the present case is a partnership firm represented through its partner. The firm was providing catering services to passengers in trains since 1981 to 2005. Once again in the year 2014, it resumed its business and obtained service tax registration on 11.02.2014. In the present writ application, the petitioner firm is aggrieved by and dissatisfied with Order No. 58/ST/JC/2022 DIN 20221260XU000000ECD9 dated 23.12.2022 passed by the Joint Commissioner, Department of CGST & C Ex, Patna (respondent no. 2) which has been enclosed with the writ application as Annexure '1' (hereinafter referred to as the 'impugned order'). 3. By the impugned order, the respondent no. 2 has confirmed demand of service tax and has also imposed penalty. The operative part of the order is being reproduced hereunder for a ready reference:- "a) I confirm the demand of Service Tax amounting to Rs. 1,38,53,734/- (Rs. One Crore Thirty Eight Lakh Fifty Three Thousand Seven Hundred and Thirty Four Only) under the proviso to Section 73 (1) of the Finance Act, 1994 read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse Charge Mechanism (in short 'RCM') on license fee paid to Zonal Railways for catering contracts. An inquiry was initiated and a search proceeding was conducted at Patna and Delhi Office of the petitioner. From the documents collected in course of the search in the premises of the petitioner, it was found that the petitioner was awarded a catering service with effect from 12.02.2014 in Train No. 12391/92 (Shramjivi Express). He was also awarded pantry car contract/provision of catering services subject to fulfillment of terms and conditions mentioned in the bid documents and with provisional license fee of Rs. 4,62,00,000/- exclusive of all taxes for a period of five years. The Railway requested petitioner to deposit Rs. 1,84,80,000/- towards license fee for the first two years of the contract through demand draft. The petitioner deposited a sum of Rs. 1,84,80,000/- vide demand draft dated 07.02.2014. The second installment of Rs. 1,84,80,000/- was also deposited vide their letter dated 26.02.2016. The competent authority took note of the terms and conditions of the Master License Agreement (MLAs) received from IRCTC and Southern Railway from the prospective of taxability of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it has been observed that "support services" provided to a business entity by the Indian Railways are taxable with effect from 01.10.2012 and in terms of the Notification No. 30/2012-ST dated 20.06.2012, the liability to pay service tax on license fee charged by Indian Railways being Government are on the recipient of the service under RCM. The competent authority found that during the period 01.02.2014 to 30.06.2017, the petitioner paid license fee of Rs. 5,14,06,832/- Rs. 4,22,35,120/- and Rs. 91,71,712/- total being Rs. 10,28,13,664/- on which a service tax of Rs. 1,38,53,734/- would be payable. In paragraph '11' of the SCN, it was observed that the petitioner had contravened the provisions of the Act of 1994 and rules made thereunder with an intent to evade the payment of service tax. SCN has been issued by the Joint Director calling upon the petitioner to show cause to the adjudicating authority within thirty days of the receipt of the notice as to why the service tax, interest and penalty be not imposed. 8. It appears that the petitioner submitted a reply and an additional submission on 02.09.2022 and 25.09.2022 respectively. Copies of the same have been brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in their ST-3 returns and pay the due service tax liability but in this case the noticee did not file correct periodical returns declaring therein his actual taxable value. As a result of this non-disclosure, the Department remained unaware of such non-payment by the noticee and had the investigation of the noticee not been commenced by the DGGI, such non-payment would not have surfaced. The contention of the noticee is not tenable that except the payment made on 08.08.2016, the entire installment of license fee was time barred. The adjudicating authority has further held that no doubt remains that the noticee have manoeuvred intentionally to suppress the taxable value from the Department with intent to evade service tax and hence, the invocation of the clause of extended time limitation has rightly been done in this case. 12. It has also been held that penalty is imposable on the basis of law operating on the date on which wrongful act is committed. Referring to Section 78 of the Act of 1994, the adjudicating authority held that according to this provision where any service tax has not been levied or paid or has been short levied or short paid by reason of suppression of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in (2022) 17 SCC 90; Commissioner of Central Excise, Bangalore vs. Karnataka Agro Chemicals reported in (2008) 7 SCC 343; Cosmic Dye Chemical vs. Collector of Central Excise, Bombay reported in (1995) 6 SCC 117; Collector of Central Excise vs. H.M.M. Limited reported in 1995 Supp (3) SCC 322. It is his submission that it is a case of mere non-declaration and non-admission of liability which cannot be put in the category of willful suppression. 15. Thirdly, it has been submitted that the licensing by Railway is not a support service. Section 65 (104C) describes the nature of support services in business which does not cover the case of the petitioner. Submissions on behalf of Respondent 16. Per contra, Mr. Anshuman Singh, learned Senior Standing Counsel for the CGST and C EX has submitted that the present writ application may not be entertained for the reason that the petitioner has got alternative remedy of appeal. It is submitted that Chapter V of the Act of 1994 (as amended) provides proper forum for alternative statutory remedy against the adjudication order passed by any adjudicating authority. Section 85 makes a provision that any person aggrieved by any decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the extended limitation period. Section 73 (1) is being reproduced hereunder for a ready reference:- "SECTION 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, Central Excise Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : PROVIDED that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied to the Excise authorities attract the larger period of limitation. 23. The Hon'ble Supreme Court did not approve the views of the learned Tribunal and held inter alia as under:- "It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not willful and yet constitutes a permissible ground for the purpose of the proviso to Section 11-A of the Central Excise and Salt Act, 1944 (hereinafter referred to as the 'Act of 1944') Misstatement or suppression of fact must be wilful." In the said case the appellant contended that he thought bona fide that he need not include the value of the Rapidogens in his declaration, for the reason that the said product was fully exempt from duty under Notification No. 180/61 dated 23.11.1961. As a matter of fact, on the date of date of filing of the declaration by the appellant, two High Courts had taken the view that the goods exempted from duty are not includible within the definition of "excisable goods" as defined in clause (d) of Section 2 of the Act of 1944. Two other High Courts had taken a contrary view and the fact was that the appellant's factory was in the State of Maharashtra and the Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays is not a "support service" and Section 65 (104c) which defines "support services of business or commerce" would not cover the case of the petitioner. We would quote Clause (104c) of Section 65 of the Act of 1994 hereunder:- "(104c) support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, Operational or administrative assistance in any manner, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation.-For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security; Clause (104c) under Section 2 of the Act of 1994 was inserted by Finance Act, 2005 dated 13.05.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 that has evolved through judicial precedents is that the High Courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it must be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court under article 226 has not pursued, would not oust the jurisdiction of the High Court and render a writ petition "not maintainable". In a long line of decisions, this court has made it clear that availability of an alternative remedy does not operate as an absolute bar to the "maintainability" of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law. Though elementary, it needs to be restated that "entertainability" and "maintainability" of a writ petition are distinct concepts. The fine but real distinction between the two ought not to be lost sight of. The objection as to "maintainability" goes to the root of the matter and if such objection were found to be of substance, the courts would be ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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