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Judgment
S. S. Garg, Member (J)
The present appeal is directed against the impugned order dated 18.12.2012 whereby the Ld. Commissioner (Appeals) has rejected the appeal of the appellant and upheld the order-in-original.
Briefly the facts of the present case are that the appellant has provided 'Advertisement Services through hoardings and 'sale of space or time service for advertisement'. During the course of Audit by A.G.(Audit) HP, Shimla, it was noticed that they had received gross amount of Rs. 1,76,99,281/- during the period 2004-05 to 2008-09 but neither had taken registration with the department nor any Service Tax payable on the services provided, was paid by them.
Accordingly a show cause notice was issued on 21.10.2009 to the appellant for the recovery of service tax amounting to Rs.20,52,694/-by invoking the extended period of limitation along with interest. They were also show caused for penal action under Section 75A, 76, 77 and 78 of the Finance Act, 1994.
2.1 After following due process, the Adjudicating Authority held that the activity of Space selling does not fall within the definition of advertising agency and was not liable for service tax prior to 01.05.2006. Further, the Adjudicating Authority confirmed the demand of Rs.14,60,187/- along with interest and imposed equal penalty under Section 78 of the Act. Penalty of Rs.1,000/- and Rs. 5,000/- was imposed on the appellant under Section 77 of the Act.
2.2 Aggrieved by the said order, the appellant filed appeal before the Ld. Commissioner (Appeals) who rejected their appeal.
2.3 Hence, the present appeal.
Heard both the parties and perused the material on records.
Ld. Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the documents furnished by the appellant. He further submitted that the appellant is a state-owned road transport corporation of the state of Himachal Pradesh providing inter and intra state bus services to the public without a profit motive. He further submits that the entire demand raised by the department by invoking the extended period of limitation is barred by limitation as held by this Tribunal in the case of M/s Chandigarh Transport Corporation vs. Commissioner of Central Excise, Chandigarh-I 2023 (7) TMI 363. He further submits that it is settled judicial precedent that the audit cannot allege suppression simply because it entertains a different view and the view taken by the assessee cannot be treated as a deliberate view to evade tax. In support of this submission, he relied upon the following decisions:-
(1) Commissioner of Central Excise, Chandigarh vs. M/s Pepsi Foods Ltd. -Civil Appeal Nos. 1921-1923 of 2003-SC
(ii) The Lalit Ashok vs. Commissioner of Central Tax, Bangalore 2018 (12) [TMI 1295 - CESTAT BANGALORE] - with this judgment being upheld by the Hon'ble High Court of Karnataka in COMMISSIONER OF CENTRAL TAX, BANGALORE vs. LALIT ASHOK - 2022 (66) G.S.T.L. 314 (Kar.)
(iii) Bharat Hotels Ltd. vs. Commissioner of C. Ex. (Adjudication) [2018 (12) G.S.T.L. 368 (Delhi)]
(iv) Compark E Services Pvt. Ltd. vs. Commr. of C. Ex. & S.T., Ghaziabad [2019 (24) G.S.T.L. 634 (Tri. - All.)]
(v) Re: Accra Pac (India) Pvt. Ltd. [2008 (6) TMI 43]
(vi) Ram Steel Rolling & Forging Mills vs. Commissioner of C. Ex., Mumbai - II [2006 (9) TMI 332- CESTAT Mumbai
He further submitted that the service tax liability amounting to Rs. 16,19,883/- has been paid by their contractor i.e. M/s Pisces Communications Private Limited and taxing the same again is not permissible under law. He further submitted that the appellant did not fall under the category of space selling for advertising agency and no service tax can be imposed upon them.
On the other hand, the Ld. Authorized Representative reiterated the findings in the impugned order.
After considering the submissions of both the parties and perusal of material on record, we find that two issues arise in this case, firstly, whether the appellant is liable to pay service tax on the sale and renting of space for advertising purposes from 01.05.2006 onwards and secondly whether the demand of service tax from the appellant is barred by limitation.
6.1 First we deal with the issue of liability of the appellant to pay service tax:-
In this regard, we find that the appellant is a statutory corporation formed under Road Transport Corporation Act, 1950 and is an instrumentality of the State Government and is operating its buses for the convenience of travelling public within and outside the state of Himachal Pradesh. Further, the corporation is not directly engaged in advertising business and does not possess expertise as an advertisement consultant. The appellant through the tender process appointed M/s Pisces Communications Pvt. Ltd. New Delhi and allowed to use space in the buses w.e.f. 01.09.2006 for a period of 3 years in all total contract value of Rs. 1,29,60,000/- payable on quarterly basis and on that they deposited the service tax amounting to Rs. 16,19,883/- on the total value addition of Rs. 1,38,36,448/- . In order to prove the payment of service tax, the appellant has also placed on record the affidavit of one Mr. Parveen Bansal, Director of M/s Pisces Communications Pvt. Ltd. alongwith the copies of Challan in order to establish the payment of service tax of Rs. 16,19,883/- in the Government Treasury. They have also placed on record the copies of various challans evidencing the payment of service tax by M/s Pisces Communications Pvt. Ltd. Since, the service tax of Rs. 16,19,883/- stands deposited by the agent of the appellant, the same cannot be demanded again from the appellant.
In view of these facts, we are of the considered opinion that the demand of service tax alongwith interest and penalty is not sustainable in law and therefore, we set-aside the same.
6.2 As far as the limitation is concerned, we find that since the appellant is a State Government Undertaking it cannot be inferred that they had an intention to evade payment of tax. This Tribunal in the case of M/s Chandigarh Transport Corporation cited (supra) has held in paras 8 and 9 as under:-
”8. We find that learned Counsel for the appellants has taken a preliminary objection that the issue is entirely time barred as the appellants are a statutory undertaking and therefore, it cannot be alleged that they have an intent to evade payment of service tax. We find that the submission is acceptable. We find that whereas the demands are relatable to the period 01.05.2006 to 30.06.2008. Show cause notice has been issued on 21.01.2010, clearly beyond the limitation. On this count too, major portion of the demand raised in the show cause notice cannot be upheld. More so, penalties imposed cannot be sustained.
In view of the above, the appeal is allowed.”
6.3 Further, we also find that during the course of audit, it was alleged by the department that the appellant has suppressed the material fact with intent to evade payment of tax but the decisions relied upon by the appellant cited (supra), wherein it has been held that the audit cannot be alleged suppression simply because the department entertains a different view then the assessee unless the ingredients of proviso to Section 73 of the Finance Act, 1994 is present. In this case, the period covered was from Financial year 2004-2005 to 2008-2009 and the show cause notice was issued on 21.10.2009, therefore, it is held that the substantial demand is barred by limitation.
6.4 Further, we find that the coordinate bench of the Tribunal in the case of M/s GD Goenka Private Limited vs. Commissioner of Central Goods and Service Tax, Delhi South vide Final Order No. 51088 of 2023 dated 21.08.2023 in Service Tax Appeal No. 51787 of 2022 has considered in detail the issue of limitation and what is required to be proved by the Revenue in order to invoke the extended period of limitation to confirm the demand. It is pertinent to reproduce the conclusions arrived at by the Tribunal which is contained in Para 25 (d), (e) and Para 26 and is reproduced herein below:-
d) Extended period of limitation cannot be invoked unless there is evidence of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of Act or Rules with an intent.
e) Intentional and wilful suppression of facts cannot be presumed because (a) the appellant was operating under self-assessment or (b) because the appellant did not agree with the audit and claimed that CENVAT credit was admissible; or (c) because the appellant did not seek any clarification from the Revenue; or (d) because the officer did not conduct a detailed scrutiny of the Returns and the availment of CENVAT credit which is alleged to be inadmissible and was discovered only during audit.
We, therefore, find in favour of the appellant on the question of limitation. As the entire demand except what has been conceded by the appellant falls beyond the value period of limitation it is not necessary to examine the merits of the case.”
In view of discussion above, we are of the considered opinion that the impugned order is not sustainable in law on merit as well as on limitation and therefore, the same is set-aside by allowing the appeal of the appellant with consequential relief, if any, as per law.