The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the show cause notice (SCN) cannot be issued when the entire service tax is deposited along with interest.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the appellant/assessee had deposited the entire amount of service tax with interest on 25.07.2014 much before the issuance of the show cause notice on 31.01.2017 and had intimated the department. In such a situation, the show cause notice under section 73 (1) of the Finance Act could not have been issued to the appellant in view of the provisions of section 73(3) of the Finance Act.
The issue raised was whether the show could have been issued to the appellant in view of the provisions of section 73(3) of the Finance Act, as the appellant had made payment of service tax with interest prior to the issuance of the show cause notice.
The appellant/assessee is engaged in the generation of solar electricity in plants situated at Jodhpur in the State of Rajasthan and Lalitpur in the State of Uttar Pradesh. The appellant supplies solar power to the Governments of Rajasthan and Uttar Pradesh.
The adjudicating authority and the Commissioner (Appeals) have not denied that payment of the service tax with interest was made by the appellant before the issuance of the show cause notice, but the benefit of the provisions of section 73(3) of the Finance Act have been denied to the appellant because of the applicability of sub-section (4) of section 73 of the Finance Act, which provides that nothing contained in sub-section (3) shall apply to a case where any service tax has not been paid by reason of fraud; or collusion; or wilful mis-statement; or suppression of facts; or contravention of any of the provisions of the Chapter or of the rules made thereunder with intent to evade payment of service tax.
The appellant also claims that it furnished all the documents and information sought for by the department pursuant to the letter dated 07.07.2014 sent by the Directorate General through a representation dated 11.08.2014, and also placed on record the fact that it had paid the service tax with the interest. As the said payment was made by the appellant on its own volition, the appellant also requested the department to construe the letter dated 11.08.2014 as an intimation under section 73(3) of the Finance Act.
A show cause notice dated 31.01.2017 was issued to the appellant alleging that the services provided by foreign service providers would be leviable to service tax under “banking or other financial services”, as defined under section 65(12) and made taxable under section 65(105)(zm) of the Finance Act under the reverse charge mechanism in terms of rule 3 of the Place of Provision of Service Rules, 2012 w.e.f 01.07.2012 and rule 2(1) (d) (G) of the Service Tax Rules, 1994 read with section 66C of the Finance Act w.e.f. 01.07.2012.
The tribunal held that the Department cannot be permitted to invoke the period of limitation by merely stating that it is a case of self-assessment as even in a case of self-assessment, the Department can always call upon an assessee and seek information.
Case Details
Case Title: M/s. Jakson Power Pvt. Ltd. Versus Commissioner, CGST & Central Excise
Case No.: Service Tax Appeal No. 50624 of 2019
Date: 21.04.2025
Counsel For Appellant: Daliya Singh, Advocate
Counsel For Respondent: Manoj Kumar, Authorized Representative
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