Issue of Show cause Notice under Proviso to Section 73(1) of Finance Act not invokable when there is no suppression of facts, so was held by the Customs Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi.
The appellant, M/s. Haridwar Roorkee Development Authorityis providing services in relation to “construction of residential complex service, renting of immovable property service” etc. Department observed that the appellant has neither taken the registration with the Service Tax Department nor the service tax has been ever paid by the appellant, despite that their activity was not a charitable activity. As such the exemption under clause (4) of Mega Notification No. 25/2012 dated 20.06.2012 was not applicable upon them.
Alleging that the appellant has failed to comply with the provisions of Section 68 of Finance Act, 1994 read with Rule 6 of Service Tax Rules, 1994 by not paying total the service tax liability during the Financial Year 2012-13 to 2014-15 for providing various taxable services that the Show Cause Notice No. 68/2016 dated 24.04.2018 was served upon the appellants demanding service tax to the tune or Rs.2,71,09,544/- along with the interest and the appropriate penalty. The said proposal has been confirmed vide the order under challenge. Being aggrieved the appellant is before this Tribunal.
R.M. Saxena, appeared for the appellants andRavi Kapoor, appeared for the Department.
On the issue of show cause notice being barred by limitation, it is observed that demand in question pertains to the period 2012-13 and 2013-14. The show cause notice is given in April 2018 i.e. much beyond the period of normal limitation. The extended period can only be invoked in terms of proviso to Section 73 (1) of Finance Act, 1994 i.e. only in the cases where ingredients of fraud, collusion, wilful mis-statement, suppression of facts etc. with an intent to evade tax are present.
The Bench consisting of P V Subba Rao, Technical Member and Dr Rachna Gupta, Judicial Member relied on various judgments and held that “when there is no suppression of facts or mis-declaration, the extended period is not invokable and the demand has to be held to be barred by time. As we have already observed that the department upon whom lies the honours, has failed to adduce any such evidence which may entitlethe department to invoke the extended period in terms of proviso to Section 73 (1) of Finance Act, 1994.
We hold that the show cause notice raising demand for the year 2012 to 2014 cannot be issued in the year 2018. Such show cause notice is definitely barred by time.”
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