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2014 Supreme(All) 1929
ALLAHABAD HIGH COURT
BEFORE : RAJES KUMAR AND SHASHI KANT, JJ.
M/s. NARESH KUMAR & CO. PVT. LTD. AND OTHERS .....Appellants
Versus
COMMISSIONER, CENTRAL EXCISE & SERVICE TAX ....Respondent
(Central Excise Appeal Nos. 337 and 338 of 2013, decided on 23rd May, 2014)
Counsel :
J.K. Mittal and Chandra Kumar Rai for the Appellants; Ashok Singh (S.C.C.) for the Respondent.
Headnote:Central Excise Act, 1944—Section 35—Finance Act, 2006—Sections 73, 71, 70—Service tax—Liability to pay—Appellant an consignment agent of TISCO—If the Assistant Commissioner or Deputy Commissioner had reason to believe that by reason of omission or failure on the part of the assessee, to make a return under Section 70, for any prescribed period or failed to disclose fully and truly all material facts required for verification of the assessment, the value of taxable service tax had been escaped assessment or service had not been paid or has been short-paid, he might, at any time, within five years, from the relevant date serve notice on person, charegable with the service tax, which had been escaped assessment—No case had been made out that primary facts, relating to transactions, had not been disclosed by the appellant and there was omission or failure on the part of the appellant to disclose fully and truly all material facts—Ingredients as contained under the provisions not established— The Deputy Commissioner failed to make out any case that he had the material to believe that there was omission or failure on the part of the assessee to disclose fully and truly all material facts—The Deputy Commissioner had illegally invoked the provisions of Section 73(1)(a) of the Act, and exercised the power to raise demand under Section 73(1) of the Act—Hence, impugned order liable to set aside. [Paras 32, 35, 42 to 47]
Hon’ble Rajes Kumar, J.—Since in both the appeals, arising from the comon order of the Tribunal, controversy involved is inter-connected, therefore, both the appeals are being decided by this one and common judgment.
2. These two appeals, under Section 35 of the Central Excise Act, read with Finance Act, 1994, are arising from the order passed by the Central Excise and Service Tax Tribunal, dated 16.8.2013. Appeal No. 337 of 2013 has been admitted on the following substantial questions of law:
“I. Whether after having initiated assessment proceeding twice against the appellant by show-cause notice dated 9.10.2002 and notice dated 20.5.2003, the Department was right under the law to issue third show-cause notice dated 23.9.2003 (from 1.9.1999 to 31.3.2003) on the same basis, same very issue and same very period and the said show-cause notice dated 23.9.2003 and procedings thereon is legal and valid under the law?
II. Whether the adjudicating order dated 14.2.2008 passed in respect of show-cause notice dated 23.9.2003, almost after 4 1/2 years without giving any explanation for such delay for which after first hearing on 12.4.2004, another hearing held after 4 years on 9.10.2007 is sustainable in eyes of law in view of settled position of law?
III. Whether the Tribunal was right in passing the impugned order without examine that the validity of show case notice dated 23.9.2003 without the existence of conditions laid down for issuance of under Section 73 (1) (a) of the Finance Act, 1994?
IV. Whether the Tribunal is right to hold that activities of the appellant covered under “consignment agent” under Section 65 (72) (now 105) (j) read with Section 65 (16) (now 25) of the Finance Act, 1994 and also the demand of Rs. 21,64,603 in respect of reimbursement for other charges is taxable under the Finance Act, 1994?
V. Whether the penalty, under Section 78 of the Finance Act, 1994 can be imposed when the appellant has paid the admitted amount before the Order-in-Original and further when there is no suppression or concealment of the service tax?”
3. Central Excise Appeal No. 338 of 2013 has been admitted on following substantial question of law:
“I Whether in the facts and circumstances, the impugned Final Order No. ST/A/57309-57310/2013-CU(DB) dated 16.8.2013 whereby allowed the Departmental Appeal No. ST/350/3008 passed by the Hon’ble Tribunal is valid under the law?
II. Whether the Hon’ble Tribunal is right in allowing the Departmental Appeal No. ST/350/2008 on the basis of the provisions of Section 76 substituted by the Finance Act, 2006 w.e.f. 18.4.2006 whereas dispute is for the period from 1.9.1999 to 31.3.2003?”
4. Brief facts, giving rise to the present appeals, are that the appellant is a Company, which is incorporated under the Indian Companies Act, 1956, entered into an agreement with TISCO on 2.4.1998, which has been renewed from time to time. However, a fresh agreement has been entered into on 21.12.2002. It is informed that the terms and conditions of the earlier agreement were same to the agreement dated 21.12.2002. By the said agreement, the appellant has been appointed as a consignment agent to perform the jobs mentioned therein. According to the appellant, though in the agreement, it is stated that the appellant is being appointed as a Consignment Agent, but having regard to the scope of work mentioned in the agreement, in law, he was not a Consignment Agent, but was only the Handling agent.
5. The appellant has been issued a notice on 18.4.2002, asking therein that since the appellant is providing taxable service under the category C & F, the appellant is liable to pay the service tax from 16.7.1997. The appellant has been required to furnish the details of the Service Tax paid from the date mentioned above and in case the service tax has yet not been paid, the appellant has been requested to apply for the registration in the prescribed form alongwith the required documents, file the returns with payment of
