A mere non-payment of service tax does not justify invoking the extended limitation period unless there is evidence of deliberate intent to misstate or suppress facts.

SANJIV SRIVASTAVA:

This appeal is directed against Order-in-Appeal No.527-ST/APPL/LKO/2022 dated 23/08/2022 passed by Commissioner (Appeals) Customs, Central Excise & Service Tax, Lucknow. By the impugned order, Commissioner (Appeals) has modified the Order-in-Original No.22/AC/ADJ-II/LKO/2021 dated 30.10.2021 wherein following has been held:-

“ORDER

I. I confirm the demand of Rs. 6,03,999/- (Six lakhs Three thousand Nine hundred and ninety-nine only) under Section 73 (1) of the Finance Act, 1994 read with Sections 142 , 173 & 174 of the CGST Act, 2017 and I drop the remaining part of demand amounting to Rs. 18,24,521/

II. I confirm interest under Section 75 of the Finance Act, 1994 read with Section 142 , 173 & Section 174 of the CGST Act, 2017 .

III. I impose penalty of Rs. 6,03,999/- (Six lakhs Three thousand Nine hundred and ninety-nine only) under Section 78 of the Finance Act, 1994 read with Section 142 , 173 & Section 174 of the CGST Act, 2017

IV. I impose penalty of Rs. 10,000/- under Section 77 (1)(d) of the Finance Act, 1994 read with Section 142 , 173 & Section 174 of the CGST Act, 2017 .

V. I impose penalty of Rs. 20,000/- under Section 70 of the Finance Act, 1994 read with Rule 7C of STR, 1994 read with Section 142 , 173 & Section 174 of the CGST Act 2017 as discussed above.”

2.1 Appellant was registered with department vide Service Tax Registration No.ABYPT5365LST001 and engaged in providing services under the category of 'Advertising agency service and Event management service" as defined under Section 65B(44) of the Act. The said services are not covered in the Negative list under Section 66D of the Finance Act, 1994 nor exempted under Mega Exemption Notification No.25/2012-ST dated 20.06.2012.

2.2 As per the information received from the Income Tax Department, it was observed that appellant had received around Rs.2,06,48,183/- under Section 194C of the Income Tax Act.

2.3 Inquiries were initiated and letters dated 07.03.2018 and 18.09.2018 was issued to the appellant to furnish various documents alongwith balance sheet for the year 2014-15.

2.4 Vide letter dated 08.10.2018 appellant responded and explained that-  Service tax on advertising was exempted till September, 2014.

 Service tax on governmental contractual works was not applied and only sales tax was charged.

 Copy of Balance Sheet, profit and loss account and form 26AS for the Financial Year 2014-15 was also produced.

2.5 After verification of the records of the appellant following was concluded:-

2.6 Show cause notice dated 12.11.2019 alleging suppression was issued to the appellant asking them to show cause as to why:-

a. “Service Tax amounting to 24,28,520/- (Twenty Four Lakh Twenty Eight Thousand Five Hundred Twenty only) should not be demanded and recovered from the Party under proviso to Section 73 (1) of the Act read with section 142, 173 and 174 of the CGST Act.

b. Interest due thereon at the applicable rate should not be demanded and recovered from them on the amount of Service Tax short paid under Section 75 of the Act, read with Section 142 , 173 and 174 of CGST Act

c. Penalty should not be Imposed on them under Section 78 of the Act, read with section 142, 173 and 174 of the CGST Act for non-payment of due Service Tax by suppressing the value of taxable services with intent to evade the payment of Service Tax from the department

d. Penalty should not be imposed on them under Section 77 (1)(d) of the Act read with Section 68 of the Act read with Rule 6 of the Rules read with section 142, 173 and 174 of the CGST Act, for not depositing Service Tax by 5th day of month immediately following the quarter in which the service is deemed to be provided.

e. Penalty should not be imposed on them under Section 77 (2) of the Act read with Section 70 of the Act, read with Section 142 , 173 and 174 of CGST Act for not filing the statutory ST-3 Return for the period Apr-Sep FY 2014-15.

f. Late fee should not be demanded and recovered from them under Sect