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2021 Supreme(Telangana) 93
IN THE HIGH COURT OF JUDICDATURE FOR THE STATE OF TELANGANA HYDERABAD
M.S. Ramachandra Rao, T.Vinod Kumar, JJ.
The Commissioner, Customs & Central Excise, Hyderabad IV (presently Commissioner, Central Tax & Central Excise and Service Tax – Appellant
Versus
M/s. National Remote Sensing Agency - Respondent
CEA No.2 of 2021
Decided On : 14-06-2021
Advocate Appeared:
For the Appellant : Sri B. Narayan Reddy, Learned Senior Standing Counsel
Point of Law : Payment of service tax - Limitation - It is absurd to even suggest that respondent had suppressed facts with an intent to evade payment of tax, and mulct it with payment of service tax by invoking the extended period of limitation.
Headnote:
Central Excise Act, 1944 – Section 35H – Finance Act – Sections 73(1) and 80 – Taxation - National Remote Sensing Agency - Demand of service tax - Respondent-NRSA had any intent to evade service tax on its activities during period and on advances received during the period justifying the action of the appellant-Revenue invoking extended period of limitation for demanding of service tax, as contended – Whether the respondent-NRSA had any intent to evade service tax on its activities during period and on advances received during period justifying the action of the appellant-Revenue invoking the extended period of limitation for demanding of service tax, as contended.
Finding of the court : It is evident that the respondent had applied and obtained registration under various categories of services as guided by the authorities of the appellant-Revenue. It is also evident that the authorities, who informed the respondent that its activities would get covered by photography service, scientific or technical constancy service and commercial training and coaching service etc., are guided by Revenue considerations alone and they have not kept in mind the nature of activity undertaken by the respondent- NRSA and area of operation of its activities, apart from the important role it plays in the affairs of this nation - There is no incentive for the respondent-NRSA to resort to evasion of tax which could result either in the profits soaring higher or any individual being benefited - Tribunal has given cogent reasons for holding that the extended period of limitation under Section 73(1)(a) of Finance Act, 1994 would not be invocable.
Result : Revenue appeal dismissed
ORDER :
T. Vinod Kumar, J.
This appeal under Section 35H of the Central Excise Act, 1944 (as applicable to the Finance Act, 1994), is directed against the common order No.A/30898-30899/2020 dated 29.06.2020 in Service Tax Appeal Nos.401 of 2008 and 402 of 2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, Regional Bench, Hyderabad (for short ‘the Tribunal’).
2. The Revenue is the appellant before this court.
3. Before the Tribunal, there were two appeals, one filed by the respondent/assessee numbered as S.T. No. 401 of 2008 and the other by the appellant/Revenue numbered as S.T. No. 402 of 2008.
4. By the present appeal, the Revenue is questioning the order passed by the Tribunal in appeal numbered as S.T. No. 401 of 2008, filed by the respondent/assessee, to the extent it held that (a) the respondent/assessee had not resorted to willful suppression with an intent to evade payment of service tax and thus the extended period of limitation prescribed under Section 73(1) of the Finance Act cannot be invoked and (b) since, there is no evidence of willful suppression of facts, provisions of Section 80 of Finance Act, 1994 can be invoked to waive the penalties imposed.
5. The Respondent/assessee – National Remote Sensing Agency (for short “NRSA”) is an autonomous body under the Department of Space and Research. The respondent is an organization established with the object of capturing Satellite Data Reception, Processing, Dissemination and application of Satellite Data in harnessing natural resources and also supporting various agencies of Government which are involved in launching of Satellite like ISRO and other Space centres concerned with designing of Satellite launch vehicles by receiving data from the Satellites launch, processing and disseminating the same to the user agency including Defence establishments on behalf of the Government of India.
6. It is on record that authorities of Revenue directed the respondent NRSA to obtain registration in respect of the three services viz., (1) photography service, (2) scientific and technical consultancy service and (3) commercial training and coaching service, as these services are taxable services under Chapter V of the Finance Act, 1994, and NRSA is providing above services for consideration and is required to discharge service tax. Upon such direction of the authorities of the Revenue, NRSA obtained registration under the provisions of Finance Act, 1994, with effect from 14.02.2005.
7. On the respondent-NRSA obtaining registration as guided by the appellant-Revenue authorities, the respondent was issued notices calling for certain records and documents for the period 16.07.2001 to 31.03.2005 in respect of above three categories of services for which registration was obtained.
8. In response to the notice issued by the appellant, the respondent submitted Annual Reports for the year 2001 to 2004-2005, detailed project-wise list, the working of the respondent with regard to Satellite Data dissemination and other activities undertaken for user agencies.
9. Upon the submission of the above information, the appellant-Revenue issued show cause notice dt. 23.10.2006 in O.R. No.84/2006-Adjn (ST), calling upon the respondent-NRSA to - show cause as to why service tax of Rs.19,89,66,570/- should not be demanded and recovered on the photography service, scientific and technical consultancy service and commercial training and coaching service from it, for the period 16.07.2001 to 31.03.2005 and on advances received during the period of 16.06.2005 to 31.12.2005 under Section 73(1)(a) of the Finance Act, 1994 read with Section 68 of the said Act and Rule 6 of Service Tax Rules, 1994, along with Education Cess leviable thereon under Section 91 read with Section 95 of the Finance Act, 2004. In addition to demand of service tax, the respondent was also directed to show cause as to why penalty should not be imposed on them under Sections 76, 77 and 78 of the Finance Act, 1994.
10. The respon
