When intimation of exemption availed given, there is no suppression of facts.

PJ/Case Laws/2012-13/1286

Case:- ENVIRONMENT PLANNING COLLABORATIVE versus COMMR. OF SERVICE TAX, AHMEDABAD

Citation:-2012 (27) S.T.R. 28 (Tri.-Ahmd.)

Brief Facts:-Assessee is a service provider of scientific and technical consultancy services to UNDP and the demand of service tax is made on the ground that the appellant is not eligible for exemption to the services provided by them to UNDP and also liable to penalty on the same for suppressing the facts to the revenue.

Appellant Contention’s:-The Appellant submits that the department issued show cause notice for demand of service tax and penalty on services provided to UNDP. As per the Notification No. 48/98-S.T., there were five services liable to service tax and Service provided to UNDP is eligible for the exemption. Show cause notice was received in November 2006 for demand of service tax and penalty on the same. Appellant submit that while filling the ST-3 returns with covering letter indicating the amounts received from UNDP for rendering of services, they had claimed exemption under Notification No. 48/98-S.T. There is no acknowledgement of the department on the covering letter even though ST-3 returns have rubber stamp of the department. The facts clearly show that there was no suppression of facts on the part of the appellant and the covering letter was indeed submitted but the stamp was not put on it. The covering letter had been admittedly received for the period ending 9/2001, 3/2002 and 3/2003 would clearly show that there was no intention on the part of the appellant to suppress facts or indulge in misdeclaration with intention to evade service tax. Therefore, the demand is time- barred and extended period could not have been invoked in this case.

Respondent Contention’s:-The Respondent submits that the fact remains that appellant is not able to show that the return though was acknowledged, the covering letter intimating about receipt of amounts for services rendered has not been acknowledged. Under these circumstances suppression of fact has been correctly invoked.

Reasoning of Judgement:-We have considered the submissions made by both the sides and it is found that the Appellant had intimated the department about the availment of exemption in respect of services provided to UNDP for two periods from 25-10-2002 and for the period ending in March 2003, which would show that appellant had bona fide belief that they were eligible for exemption. When an assessee intimates the department by way of two letters and subsequently also he intimates, and in the middle there is no rubber stamp on the covering letter and only on the ground that covering letter does not have a rubber stamp, even though ST-3 returns attached to the covering letter had the rubber stamp, is not a convincing way of invoking the extended period and demand of service tax and imposing penalty. In view of the fact that appellants have intimated the department on three occasions in the covering letter with the returns and only in the middle for one period of ST-3 return, such intimation was given but covering letter was not having rubber stamp, on that ground only the bona fide belief cannot be questioned. Department has not been able to make out a case of suppression of facts and justification for invocation of extended period. In view of the above, appeal is allowed with consequential relief to the appellants.

Decision: -Appeal Allowed.

Comment:In this case also the analogy is that the revenue is required to prove with evidences that there has been suppression of facts with intention to evade payment of duty for invoking the extended period of limitation. When the intimations have been given by the assessee to the department on several occasions, it cannot be said that there has been suppression of facts by the assessee.

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PJ/Case Laws/2012-13/1286

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