Order Date – 30 October 2023

Parties: M/s Right Resource Management Service Vs Commissioner of Central Goods and Services Tax, Central Excise and Customs, Dehradun

Facts –

• The Appellant, M/s Right Resource Management Service, is providing ‘Manpower supply Service’ and it has been paying service tax and filing ST-3 returns. On a search conducted by the departmnet, issued a show cause notice proposing recovery of service tax for the period 2010-11 to 2014-15 under section 78 of the Finance Act, 1994 invoking extended period of limitation along with interest and penalty.
• The demand was partly dropped by the Commissioner as the demand was beyond even the extended period of limitation of five years and the rest are confiremd by invoking best judgment assessment under section 72 of the Act.

Issue –

• Whether best judgment assessment can be done suo moto? What is the relevant date for reckoning the limitation under section 73?

Order –

• The Tribunal observed that there is nothing in Section 72 suggests that best judgment assessment has to be done at the request of the assessee or at the behest of anyone. The Central Excise officer, evidently, can do this on his own, in other words, suo moto. Therefore, the submission of the learned counsel for the assessee that this cannot be done suo moto holds no water.
• The relevant date for reckoning the limitation under section 73 in cases where no return is filed by the due date is the due date for filing the return and there is no provision for changing this relevant date even if the assessee files a return after the due date and the Commissioner was correct in reckoning the last date for filing of returns as the relevant date.
• The normal period of limitation was 18 months up to 13.5.2016 and 30 months thereafter and the 30 months limitation will apply to all the past periods also except those which have already expired by 13.5.2016 under the previous limitation of 18 months; the demand for the normal period of limitation must be sustained along with interest thereon but the demand for the extended period of limitation cannot be sustained.
• Further it is true that the DGCEI discovered that some tax had escaped assessment and that the assessee does not dispute it on merits, it is equally true that the entire demand is based on the records of the assessee. therefore, the demand only in respect of the normal period of limitation can be sustained.
• It was noticed that the assessee does not dispute that the assessee failed to appear in response to the summons and also that it had not provided the documents called for by the officers and hence penalty @ Rs. 200/- per day for the period of failure was correctly imposed.