Advocates:
['VINAY PANDEY', 'MANEESH SHARMA', 'ARVIND SINGH', 'PRAGALBHA SHARMA', '', 'ASHOK PATIL', 'RAVI RANJAN SINHA', 'R K KESHARWANI']

1

NAFR

HIGH COURT OF CHHATTISGARH, BILASPUR

Judgment reserved on 22-03-2018

Judgment delivered on 09-08-2018

TAXC No. 138 of 2016

1. Commissioner, Central Excise, Customs & Service Tax, Raipur,

Chhattisgarh.

---- Appellant

Versus

1. Chhattisgarh State Industrial Development Corporation Limited

(In short CSIDCL) Commercial Complex, Jeevan Beema Marg,

Pandari, Raipur, Chhattisgarh

---- Respondent

For Appellant

Shri Vinay Pandey, Advocate

For Respondent

Shri Ashok Patil, Advocate

Hon'ble Shri Justice Prashant Kumar Mishra

Hon'ble Shri Justice Ram Prasanna Sharma

C A V Judgment

The following judgment of the Court was delivered by

Prashant Kumar Mishra, J.

1.

The present appeal by the Revenue was admitted on 19-12-2016

on the following substantial question of law :

“Whether the CESTAT was correct in

holding that the extended period cannot be

invoked as stipulated in proviso to Section 73

of the Finance Act, 1994 especially when the

fact of rendering of taxable service by the

Respondent came to the notice of the

Appellant while conducting Audit of the books

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and accounts of a third party and

Respondent's liability for payment of Service

Tax could be determined only after further

enquiry, whereas the Respondent had failed

to obtain Registration or pay Service Tax ?”

2.

Thereafter, on the respondents filing cross objection, the

maintainability of which was objected by the appellant, this Court

framed the following additional substantial question of law on

22-3-2018 :

“Whether the cross-objection filed by the

respondent is maintainable by virtue of

Section 35G(9) of the Central Excise Act,

1944?”

3.

The obtaining facts, briefly stated, are that the respondent

Chhattisgarh State Industrial Development Corporation Limited

(for brevity 'CSIDC') is engaged in rendering taxable service to

the lessees within the industrial area near Raipur, however, it did

not obtain registration under Section 65 of Chapter V of the

Finance Act, 1944 (for brevity 'the Act, 1944'). During the audit of

books and records of M/s G.R. Sponge & Power Limited, Raipur,

the Central Excise Audit Team observed that the respondent had

charged and collected Rs.3,25,936/- from the said factory

towards the maintenance charges and street light charges vide

bill No.87 dated 28-6-2006 without getting itself registered with

the Service Tax Department nor paying any service tax. The

respondent was charging and collecting maintenance charges

and other taxable service charges from many other factories

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also, therefore, the matter was investigated. During such further

investigation the respondent was found to have collected

different amounts in the following manner :

S.No.

Period

Amount

Received

Rate of

Service

Tax

Service

Tax

Payable

E Cess/ SHE

Cess Payable

1

1-7-03 to 31-3-04

5390000

8%

431200

-

2

1-4-04 to 31-3-05

10581000

10.20%

1058100

21162

3

1-4-05 to 31-3-06

7326000

10.20%

732600

14652

4

1-4-06 to 31-3-07

22606000

12.25%

2712720

54254

5

1-4-07 to 31-3-08

12493000

12.36%

1499160

29983/14992

Total

56396000

6433780

120051/14992

4.

A show notice was issued to the respondent on 8-7-2008

demanding service tax amounting to Rs.65,68,823/- (including

cess) under Section 73 of the Act, 1944 along with interest under

Section 75 of the Act, 1944 and for imposition of penalty under

Sections 76, 77 and 78 of the Act, 1944.

5.

Upon adjudication, the Commissioner, Central Excise, Raipur,

passed an order-in-original on 15-1-2009 confirming the demand

of service tax to the tune of Rs.50,58,361/- (including cess) along

with interest, but dropped the demand of service tax prior to the

period 16-6-2005. Penalty under Section 76 was also waived but

penalty of Rs.2,000/- was imposed under Section 77 of the Act,

1944 for non filing of returns and failure to register itself within

time. Further penalty of Rs.50,58,361/- was also impose