C.C., C.E. & S.T. – BANGALORE (ADJUDICATION) ETC. v. M/S NORTHERN OPERATING SYSTEMS PVT LTD.

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A Computer Sciences Corporation, are unreasoned and of no precedential value.

61Copy pinpoint61. In view of the above discussion, it is held that the assessee was, for the relevant period, service recipient of the overseas group company concerned, which can be said to have provided manpower B supply service, or a taxable service, for the two different periods in question (in relation to which show cause notices were issued). Invocation of the extended period of limitation

62Copy pinpoint62. The revenue’s argument that the assessee had indulged in wilful suppression, in this court’s considered view, is insubstantial. The C view of a previous three judge ruling, in Cosmic Dye Chemical v. Collector of Central Excise40 - in the context of Section 11A of the Central Excise Act, 1944, which is in identical terms with Section 73 of the Finance Act, 1994 was that: “Now so far as fraud and collusion are concerned, it is evident D that the requisite intent, i.e., intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are clearly qualified by the word “wilful” preceding the words “misstatement or suppression of facts” which means with intent to evade duty. The next set of words “contravention of any of the provisions of this Act E or rules” are again qualified by the immediately following words “with intent to evade payment of duty”. It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section F 11-A. Misstatement or suppression of fact must be wilful.”

63Copy pinpoint63. This decision was followed in Uniworth Textiles v. Commissioner of Central Excise41 where it was observed that “(t)he conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts” is “untenable”. This view was also followed in Escorts v. Commissioner of Central Excise42, G Commissioner of Customs v. Magus Metals43 and other judgments. 40 (1995) 6 SCC 117 41 (2013) 9 SCC 753 42 (2015) 9 SCC 109 43 (2017) 16 SCC 491 H

C.C., C.E. & S.T. – BANGALORE (ADJUDICATION) ETC. v. M/S 947 NORTHERN OPERATING SYSTEMS PVT LTD. [S. RAVINDRA BHAT, J.]

64Copy pinpoint64. The fact that the CESTAT in the present case, relied upon A two of its previous orders, which were pressed into service, and also that in the present case itself, the revenue discharged the later two show cause notices, evidences that the view held by the assessee about its liability was neither untenable, nor mala fide. This is sufficient to turn down the revenue’s contention about the existence of “wilful suppression” B of facts, or deliberate misstatement. For these reasons, the revenue was not justified in invoking the extended period of limitation to fasten liability on the assessee. Conclusions

65Copy pinpoint65. It is held, for the foregoing reasons, that the assessee was the C service recipient for service (of manpower recruitment and supply services) by the overseas entity, in regard to the employees it seconded to the assessee, for the duration of their deputation or secondment. Furthermore, in view of the above discussion, the invocation of the extended period of limitation in both cases, by the revenue is not tenable. D

66Copy pinpoint66. In light of the above, the revenue’s appeals succeed in part; the assessee is liable to pay service tax for the periods spelt out in the SCNs. However, the invocation of the extended period of limitation, in this court’s opinion, was unjustified and unreasonable. Resultantly, the assessee is held liable to discharge its service tax liability for the normal period or periods, covered by the four SCNs issued to it. The consequential demands therefore, shall be recovered from the assessee.

67Copy pinpoint67. The impugned common order of the CESTAT is accordingly set aside. The commissioner’s orders in original are accordingly restored, except to the extent they seek to recover amounts for the extended period of limitation. The demand against the assessee, for the two separate periods, shall now be modified, excluding any liability for the extended period of limitation.

68Copy pinpoint68. The appeals are partly allowed, to the above extent, with no order on costs. G Divya Pandey and Amarendra Kumar Appeals partly allowed. (Assisted by : Ajay, LCRA)