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TMI Blog2025 (3) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that it was wholly impermissible for the respondents to resort to the First Proviso to Section 73 (1) of the Act.
As is ex facie apparent from a reading of the above, there is no material on the basis of which the allegation of a wilful suppression of facts is sought to be sustained. Regard must be had to the fact that the extended period of limitation cannot be justified by a mere reproduction or incantation of the language of the statute. A wilful suppression of facts, and which may have allegedly lead to a failure to pay tax, would have to rest on material which constitutes proof of the allegation levelled.
Conclusion - The invocation of the extended period of limitation under the First Proviso to Section 73 (1) was unjustified, as the facts were already known to the respondents from previous proceedings.
The impugned SCN is quashed - petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. April 2016 to September 2016 25 Oct 2016 (Original) 27 Apr 2019 (30 months) 27 Oct 2021 23,19,379 27 Oct 2016 (Revised) 6. October 2016 to March 2017 25 Apr 2017 (Original) 22 Jan 2020 (30 months) 22 Jul 2022 22 July 2017 (Revised) 7. April 2017 to June 2017 15 Aug 2017 (Original) 27 Mar 2020 (30 months) 27 Sep 2022 8,83,302 27 Sep 2017 (Revised) Total 80,85,249 6. It would be relevant to note that while the impugned SCN was issued for the period of April 2014 to June 2017, the time periods at serial numbers 6 and 7 of the chart handed over by the learned amicus i.e. the period of October 2016 to June 2017 would fall within the general period of limitation, and would thus be covered by the judgment of the Customs, Excise and Service Tax Appellate Tribunal [Tribunal]. 7. The principal question which was canvassed for our consideration was whether the extended period of limitation and which rests on an allegation of service tax having been not levied or paid or having been short-levied or short-paid by reason of fraud, collusion, wilful misstatement or suppression of facts, could be said to have been attracted. 8. On a perusal of the vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings, viz., '29.16 In this connection, I observe that for treating an activity an export the assessee has to fulfil/ all the conditions of the Export of Services Rules, 2005. I find that rule 3 (2) of the Export of Services Rules, 2005 has laid down the condition of receipt of the consideration in foreign currency whereas this condition has not been fulfilled in respect of outbound tours performed by the Indian tourists as the consideration for the same has been received in Indian rupees. Further, as regards the taxability of foreign tourists, as already discussed, the assessee has provided services of planning, scheduling, organizing or arranging tours (when may include arrangements for accommodation, sightseeing or other similar services) to the foreign tourists within India since at the time of the provision of aforesaid service the service provider and the service recipient, both were in India and the service also flew within the country and so the place of supply of service remained in India and hence the services provided by them within India are well covered under 'Tour Operator service'. I find that it is a fact that the definition of the term 'Tou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken the consistent position that those services would not fall within the ambit of the Act and had claimed exemption from taxation based on a notification issued by the respondents themselves. It was thus contended that it would be wholly impermissible for the respondents to assert that they were either unaware of the position as taken by the writ petitioner or that there was a suppression of material facts. 10. While, and from the chart which has been placed for our consideration by Mr. Kunal, we find the impugned SCN would fall within the extended period of limitation otherwise constructed in terms of the First Proviso to Section 73 (1), the principal issue which arises is whether that provision could itself have been said to be attracted. 11. Mr. Kunal, the learned amicus, submitted that once it was the conceded position of the respondents of the same and identical issue forming subject matter of the earlier SCNs' proceedings and the adjudication which was undertaken in connection therewith, it would perhaps not be permissible for the respondents to assert a wilful suppression of facts and which constitutes the trigger for the application of the First Proviso to Section 73 (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the appellant were not known to it. 15. Admittedly, when the first show-cause notice was issued, the extended period of limitation was not resorted to. A notice should ordinarily be issued within a period of six months (as the law then stood) i.e. within the prescribed period of limitation but only in exceptional cases, the said period could be extended to 5 years. When in the original notice, such an allegation had not been made, we are of the opinion that the same could not have been made subsequently as the facts alleged to have been suppressed by the appellant were known to them. xxxx xxxx xxxx 17. Yet again in Nizam Sugar Factory v. CCE [(2006) 11 SCC 573 : (2006) 197 ELT 465] the ratio rendered in P&B Pharmaceuticals Ltd. [(2003) 3 SCC 599 : (2003) 153 ELT 14] has been reiterated stating: (Nizam Sugar Factory case [(2006) 11 SCC 573 : (2006) 197 ELT 465], SCC p. 577, para 11) "11. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show-cause notices the same/similar facts could not be taken as sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken the view that in a case in which a show-cause notice has been issued for the earlier period on certain set of facts, then, on the same set of facts another SCN based on the same/similar set of facts invoking the extended period of limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the Department." 18. Furthermore, extension of the period of limitation entails both civil and criminal consequences and, therefore, reasons therefor must be specifically stated in the show-cause notice, in absence whereof the court would be entitled to raise an inference that the case was not one where the extended period of limitation could be invoked. [See CCE v. Punjab Laminates (P) Ltd. [(2006) 7 SCC 431]" 14. As is evident from the proposition which came to be propounded by the Supreme Court in P&B Pharmaceuticals and Larsen & Toubro, it was held that once necessary facts had already been brought to the notice of the authorities at different points in time, the same would clearly be a circumstance destructive of any allegation of the First Proviso to Section 73 (1) being applicable. The Supreme Court held that once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby contravened the provisions of the Finance Act, 1994 and rules made thereunder with intent to evade payment of service tax. Accordingly, the assessee's declaration in the self-assessment memorandum (Part B2 of Part B ST-3 returns) of having filled the particulars correctly and of also having assessed and paid the service tax correctly as per as per the provisions of the Finance Act, 1994 and rules made thereunder, appears to be wilful misstatement. Assessee has failed to discharge this onus. These acts of omission and commission on the part of the assessee resulted in non-payment of service tax as discussed under aforesaid paras. These acts of the assessee appear to have been done with intent to evade payment of service tax due. Further it appears that, had the audit not been initiated, the evasion of service tax would not have come to light. Thus, it appears that the assessee have intentionally and wilfully suppressed the fact of provision of taxable services from the department and violated various provisions of the Act/Rule with intent to evade payment of service tax payable by the assessee. Hence the proviso to sub section (1) of Section 73 of the Finance Act, 1994 for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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