Service of a show cause notice via WhatsApp is not a valid mode of service under Section 37C of the Central Excise Act, 1944. Additionally, a bona fide belief in tax exemption does not justify the invocation of the extended period of limitation under Section 73 of the Finance Act, 1994.

Per: AJAY SHARMA

This appeal has been preferred by the appellant, assailing the Order-in-Appeal dated 21.12.2022 passed by the Commissioner (Appeals), CGST & Central Excise, Raipur, Chhattisgarh whereby the learned Commissioner upheld the demand of service tax amounting to Rs.2,28,763/- along with applicable interest and penalty as confirmed by the adjudicating authority, while granting partial relief by setting aside the late fee that had been imposed for non-filing of returns.

2. The appellant is engaged in providing intermediary services for the ’selling of space for advertisement in print media’. The appellant contended that such services are squarely covered under the negative list of services as defined under Section 66D of the Finance Act, 1994, and hence are not liable to service tax. Acting on this understanding, the appellant neither obtained service tax registration nor discharged any service tax liability. Periodical returns were likewise not filed.

3. The proceedings against the appellant originated from third-party information received from the Income Tax Department, which disclosed receipts of Rs.18,50,833/- in the appellant’s hands for the financial years 2013-14 and 2014-15. The Revenue formed the impression that these receipts were earned by the appellant against the provision of taxable services, without registration and without discharging service tax liability. Accordingly, a Show-cause Notice dated 15.10.2018 was issued, demanding service tax of Rs.2,28,763/- u/s. 73 of Finance Act, 1994 along with interest, penalty, and late fee. The said show-cause notice culminated in the Order-in-Original dated 27.08.2021, whereby the adjudicating authority confirmed the entire demand with interest, penalty and late fee. The appellant’s appeal before the Commissioner (Appeals) succeeded only to the limited extent of setting aside the late fee. The demand of service tax, interest and penalty was otherwise upheld by the impugned order.

4. We have heard the rival submissions and have perused the case records including the synopsis/written submissions and case laws placed on record.

5. The learned counsel for the appellant raised a threshold preliminary objection that the Show Cause Notice dated 15.10.2018 was never served upon the appellant at his current address where he is residing since the year 2015 through any of the modes of service prescribed under the statute. It was submitted that the said notice was belatedly communicated to the appellant through WhatsApp on 19.10.2019, more than a year after its issuance, and that such communication does not constitute valid service within the meaning of Section 37C of the Central Excise Act, 1944 as made applicable to the Finance Act, 1994 by virtue of Section 83 thereof. It was further submitted that although this argument was specifically raised before the learned Commissioner (Appeals), the said authority failed to address or adjudicate upon the same, rendering the impugned order deficient in reasoning.

6. Section 37C of the Central Excise Act, 1944, applicable here by virtue of Section 83 of the Finance Act, 1994, prescribes the modes of service of notices and orders in the following terms:

" Section 37C - Service of decisions, orders, summons etc.

(1) Any decision or order passed or any summons or notices issued under this Act or the rules made thereunder, shall be served —

(a) by tendering the decision, order, summons or notice, or sending it by registered post with acknowledgment due or by speed post with proof of delivery or by courier approved by the Central Boar