Case Details: Commissioner, Service Tax Commissionerate, New Delhi Versus CBM Industries Ltd. [(2025) 30 Centax 215 (Tri.-Del)]
Judiciary and Counsel Details
- Justice Dilip Gupta, President & Shri P.V. Subba Rao, Member (State Tax)
- S/Shri Rajeev Kapoor, Authorised Representative, for the Assessee.
- Alok Yadav, Nilotpal Shyam & Ms Tejas Mishra, Advs., for the Department.
Facts of the Case
The assessee was engaged in the business of preparing and putting up signage at roads and airports. During the relevant period, the assessee was registered with the Service Tax Department. Based on the information that the assessee had not paid service tax correctly, a show-cause notice (SCN) was issued invoking the extended period of limitation. Aggrieved by the order, the assessee filed an appeal to the CESTAT.
CESTAT Held
The Tribunal held that it was a well-settled legal position that although every service tax assessee operates under self-assessment, extended period of limitation cannot be invoked unless one of the five elements essential for invoking extended period of limitation is established. It was also a well-settled legal position that suppression of facts does not mean mere omission but the suppression with an intent to evade.
Admittedly, the Commissioner invoked the extended period of limitation and imposed penalties under section 78 under the wrong understanding of the law that the intent to evade is not necessary to invoke the extended period of limitation and to impose penalty under section 78. Therefore, the entire demand beyond the normal period of limitation of 18 months during the relevant period cannot be sustained and needs to be set aside regardless of the merits of the case.
