Extended Limitation Cannot Be Invoked Without Proof Of Intent To Evade: CESTAT Delhi Sets Aside Service Tax Demand On Car Parking Charges
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi has held that the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 cannot be invoked in the absence of clear evidence of suppression of facts with intent to evade service tax. A Division Bench comprising Justice Dilip Gupta (President) and P.V. Subba...
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi has held that the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 cannot be invoked in the absence of clear evidence of suppression of facts with intent to evade service tax.
A Division Bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) allowed the appeal against the order of Commissioner(appeals) filed by the assessee M/s Omaxe Buildhome Ltd., by stating that the extended period of limitation cannot be invoked merely because the appellant had supressed the material facts and had contravened to provsions of the Finance Act. Thereby, setting aside the demand of service tax raised on car parking charges.
The assessee, Omaxe Buildhome Ltd., engaged in the development of residential complexes, charged buyers three categories of amounts Basic Sale Price, Preferential Location Charges (PLC), and Car Parking Charges. The developer discharged service tax on BSP and PLC, but did not pay service tax on car parking charges, stating that such amounts were not taxable under "construction of complex services" at the time.
The Revenue issued a show cause notice proposing demand of service tax, invoking the extended period of five years under the proviso to Section 73(1) for alleged suppression of facts.
The adjudicating authority confirmed the demand along with an equivalent penalty under Section 78. The Commissioner (Appeals) upheld this view, leading to the present appeal before CESTAT.
The asseessee argued that the issue involved was purely interpretational and legal in nature relating to taxability of construction complex services, which service was introduced only in 2010.
The Bench remarked that the Department cannot shift the entire responsibility of tax scrutiny onto the assessee and reminds that officers have a statutory duty to scrutinise returns, stating that it is the duty of the officers scrutinizing the returns to examine the information disclosed by an assessee and the department cannot be permitted to take a plea that it is the duty of the assessee to disclose correct information and it is not the duty of the officers to scrutinize the returns.
The Bench observed that Extended limitation applies only when deliberate intent to evade is proved.
In view of the above, the Bench allowed the appeal in favour of the assessee.
Case Title: M/s Omaxe Buildhome Limited vs. Commissioner of GST Delhi-East
Case No: Service Tax Appeal No. 50776 of 2018
Appearance for the Appellant/Assessee: Shri Monish Panda and Shri Anmol Jasal
Appearance for the Department: Shri Manoj Kumar