2018 (11) TMI 1221 – CESTAT CHENNAI – TMI – Extended period of limitation – penalty – appellants collected service tax on Man-power Supply Service but failed to remit the same to Government account – Held that:- When the appellants have furnished details on 15.09.2006, then the show-cause notice ought to have been issued within one year from the date of such knowledge received by the department. On the peculiar set of facts presented by appellants on the case, when the department has come to know about the contract agreement between the appellants and their clients, showing details of services rendered by them under Man-power Supply service, the invocation of extended period after 15.09.2006 cannot sustain – the demand for the period 15.09.2006 to 31.03.2008 cannot sustain and requires to be set aside – appeal partly succeeds on the ground of limitation.
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In identical set of facts, the Hon'ble Jurisdictional High Court in the case of M/s. V.N.K. Menon & Co., Vs CESTAT, Chennai [2
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And Shri Madhu Mohan Damodhar, Member (Technical) For the Appellant Shri J. Shankar Raman, Adv. For the Respondent Ms. T. Usha Devi, DC (AR) ORDER Per Bench: The appellants are a partnership concern engaged in the business of Man-power Supply Service to various corporate customers. On gathering intelligence, that they are evading payment of service tax, the officers of DGCEI, took up investigation. On verification of records, it was noticed that the appellants collected service tax on Man-power Supply Service but failed to remit the same to Government account. Accordingly, show-cause notice dated 25.08.2009 was issued demanding service tax for the period from June, 2005 to March, 2008. It was also proposed to impose penalties under various sections of the Finance Act, 1994. After due process of law, the original authority confirmed the demand, interest and, inter alia, imposed equal penalty under section 78 of the Finance Act, 1994. Aggrieved, the appellants are now before the Tribunal
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tested the demand. They had also contested the demand on limitation before the authorities below. However, the Commissioner confirmed the demand and imposed equal penalty under section 78 of the Finance Act, 1994. Since there was a letter received by appellants to the DGCEI officials on 15.09.2006 submitting the necessary documents, the appellant's activity was well within the knowledge of the officials at least from 15.09.2006 onwards. Hence, during the period from 15.09.2006 to 31.03.2008 the extended period cannot be invoked. To support this contention, he placed reliance on the decision in the case of M/s. V.N.K. Menon & Co., Vs Commissioner of Central Excise, Coimbatore reported in 2010 (257) E.L.T.427 (T), which has been affirmed by the Hon'ble Madras High Court as reported in M/s. V.N.K. Menon & Co., Vs CESTAT, Chennai reported in 2015 (323) E.L.T.524 (Mad.). Moreover, that appellants had paid substantial amount much before issuance of the show-cause notice. Alte
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on proceedings, it cannot be said that the department was put to knowledge and, therefore, there is no suppression on the part of appellants. The extended period invoked as well as penalty imposed are correct and proper. 4. Heard both sides. 5. The learned counsel has contested only on the ground of limitation and the penalties imposed. To support the ground of limitation, he has relied upon the letter dated 15.09.2006 issued by the appellants to DGCEI. The said letter is seen at page 143 of appeal paper book. On perusal of the said letter, it is very much clear that the appellants have informed the department the nature of activity carried out by them. A copy of the service tax registration obtained by them was also enclosed. Especially, the contract agreement entered by appellants with the clients is seen produced along with this letter. They have also put forward their doubt with regard to whether service tax is payable on salary. Thus, it is very much clear from this letter that th
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tails. The relevant portion is reproduced as under: 8. On a careful consideration of the entire gamut of facts, the answer to the question of law raised by the assessee is found in Para-2 of the order of the Tribunal itself. It has been held by the Tribunal that there is a clear case of suppression for invocation of extended period of limitation for the period prior to August, 1996, as the activities of the appellant/assessee came to light subsequent to an investigation by the Department. However, insofar as the period post August, 1996, on the plea of suppression, the Tribunal was correct in setting aside the demand on the ground that the department was aware of the activities of the appellant/assessee and, therefore, post August, 1996, the case of suppression, as held by the adjudicating authority, cannot be sustained. The plea of the appellant is that if there is no suppression post August, 1996, no extended period could be invoked post August, 1996 and, therefore, the same analogy
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.2006. Only pursuant to the investigation conducted not only with appellants but also with many of their clients like M/s. SPIC, M/s. Raddison GRT, M/s. Aircel, etc., did the fact of collection of service tax and the evasion come to light. Discernible, these facts were suppressed from the Department till the investigation. This being so, not only is the extended period invocable up to 15.09.2006 and demand in Annexure-A of the notice sustainable with interest up to that date but the penalty equal to the amount of such revised tax liability is also imposable. No interference is also called for in respect of penalty imposed under Section 77 ibid. So ordered. The impugned order is thus modified to the extent of setting aside the demand from 15.09.2006 to 31.03.2008 only. The appeal is partly allowed in above terms. 7. The application for change of cause title has been filed by the department seeking to change cause title from Commissioner of Service Tax, Chennai to The Commissioner of GST
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