Order date – 08 August 2022

Facts – 

• This appellant, Reciprocal Infrastructure Pvt. Ltd., filed this appeal against order dated 24/02/2015 passed by the Cestat, Lucknow wherein demand of Service tax has been confirmed by invoking the proviso to section 73 (1) of the Finance Act 19941 with interest and penalty.
• The show cause notice against the appellant seeks to invoke the extended period of limitation under the respective provision. It alleges that the appellant have short paid service tax on ‘Works Contract Service’ ‘Site Preparation Services’ has availed inadmissible CENVAT credit with intent to evade payment of service tax.

Issue – 

• Whether invoking extended period of limitation under the proviso to section 73 (1) of the Finance Act without proper conclusion regarding ‘suppression of facts’ sustainable?

Order – 

• The Tribunal observed that it was absolutely necessary for the adjudicating authority to reach a conclusion as to whether the appellant had deliberately suppressed material information with an intention to evade payment of service tax or not before confirming the demand in show cause notice.
• The Tribunal held that the confirmation of demand for the period beyond the normal period cannot be sustained. However, the demand of service tax for the period which is within the normal period of 18 months from the relevant date is sustained. 
• Consecutively, the impugned order to the extent it has confirmed the demand for the extended period of limitation is set aside, whereas the confirmation of demand for the normal period is sustained.