ENVIRONMENT PLANNING COLLABORATIVE Vs. C.S.T., AHMEDABAD

JUDGEMENT

(1.) THE demand for service tax of Rs. 11,250/ - for the period from April 2002 to September 2002 has been confirmed against the appellant with interest and penalties have been imposed under Section 76 and Section 78 of Finance Act, 1994.

(2.) THE learned Chartered Accountant on behalf of the appellants submitted that the appellant is engaged in providing scientific and technical consultancy service and the demand has been made on the ground that the appellant is not eligible for exemption to the services provided by them to UNDP. He submits that the notification No. 48/98 - S.T. was issued on 24 -4 -98 and during the relevant period there were only five services which were liable to service tax and therefore the intention of the Government was always to exempt all services provided to such organizations and therefore they are eligible for the exemption. Further he also submits that the show cause notice was received by the appellant in November 2006. He submits that while filing the ST -3 returns for the period ending September 2001 and March 2002 and March 2003, the appellant had submitted a covering letter indicating the amounts received by them from UNDP for rendering services and had also claimed exemption under Notification No. 48/98 dated 24 -4 -98. While the duty demand for the period upto September 2001 and March 2002 have been dropped accepting the submission of the appellant that there was a clear intimation along with the ST -3 return regarding receipt of amounts for services rendered, the demand for the period of six months ending September 2002 has been confirmed on the ground that there is no acknowledgement of the department on the covering letter even though ST -3 return which was accompanying the covering letter has rubber stamp of the department. He submits that the facts themselves show clearly that there was no suppression of facts on the part of the appellant and according to the appellant the covering letter was indeed submitted but the stamp was not put on it. The very fact that such a covering letter had been admittedly received for the period ending 9/2001, 3/2002 and 3/2003 would clearly show that there was no intention on the part of the appellant to suppress facts or indulge in misdeclaration with intention to evade service tax. Therefore he submits that the demand is time barred and extended period could not have been invoked in this case and penalties also could not have been imposed. The learned DR on the other hand submits that the fact remains that appellant is not able to show that the return for the period ending September 2002 though was acknowledged, the covering letter intimating about receipt of amounts for services rendered has not been acknowledged. Under these circumstances suppression of fact has been correctly invoked.

(3.) I have considered the submissions made by both the sides. I find considerable force and the arguments advanced by the learned Chartered Accountant. The very fact that appellant regularly intimated the department for the two period of ST -3 return prior to the period in dispute and for the period ending March 2003 supports the claim of the appellant that they had a bona fide belief that they were eligible for exemption. Once the appellant intimated the fact to the department, the suppression of fact or misdeclaration cannot be alleged. Even though on merits appellant may not have a case, I am not required to go into the merits of the case. In view of the fact that appellant had intimated the details for the earlier period of one year and for the subsequent period of six months, the invocation of suppression of facts or misdeclaration cannot be sustained. In view of the above position, appellant has a very strong prima facie case in their favour and therefore unconditional stay against the recovery of the service tax and penalty is allowed after waiving pre -deposit. (Dictated & Pronounced in Court)