Former Prime Minister, Dr Manmohan Singh, delivering his Award Acceptance Speech after receiving TIOL Fiscal Heritage Award 2022 on Nov 8 at Taj Palace, New Delhi

Hon'ble Union Cabinet Minister, Shri Nitin Gadkari, addressing after conferring TIOL Fiscal Heritage Award 2022 on Dr Manmohan Singh, for his Lifetime contribution to economic & fiscal space.

Chairman of 15th Finance Commission, Shri N K Singh, speaking about rich legacy of Dr Manmohan Singh after conferment of TIOL Fiscal Heritage Award 2022 on Nov 8, 2022 at Taj Palace, New Delhi

I-T- Date of possession would be date of purchase made within one year for mandate as u/s 54 : ITAT

I-T- Notice issued u/s 148 has no legal sanctity when AO failed to show nexus between formation of belief and material basis with which such belief is formed : ITAT

I-T- AO erred in ignoring facts while confirming additions u/s 40A(3): ITAT

I-T- No addition allowed if genuineness of transaction proved by assessee : ITAT

GST - Sub-contracting for a service is not an 'intermediary' service - Refund of un-utilised ITC used in making zero rated supplies of services cannot be denied: HC

GST - Definition of 'intermediary' under the service tax regime vis-a-vis the GST regime has remained similar - There being no change of facts the department cannot take a different view for different periods: HC

GST - Written statement by Revenue seeks to justify the impugned order on grounds which are not even part of the impugned order and which is clearly impermissible in law: HC

GST - Inadvertent mistake leading to cancellation of registration - Petitioner permitted to make manual application for restoration: HC

GST - ITC taken on supplies by allegedly non-existent firms - Seriousness of the offences alone is not conclusive of the applicant's entitlement to bail: HC

GST - Rule 96A - Delay in making export within specified time - Extension granted - Petitioner to approach its jurisdictional authority for refund of tax deposited: HC

Cus - Existing Regulation 6 of CBLR, 2018 gives more flexibility to an applicant in clearing the exam vis-a-vis CBLR 2013: HC

ST - When Revenue invokes extended limitation u/s 73(1) of Finance Act 1994, burden is cast on Revenue to prove suppression of fact: CESTAT

ST - An incorrect statement cannot be equated to wilful mis-statement, since former implies making incorrect statement with knowledge of it not being correct: CESTAT

ST - If assessee's bona fide belief cannot be doubted & assessee proves reasonable cause for such belief & for failure to not discharge its liability, no penalty is imposable: CESTAT

2022-TIOL-1413-HC-P&H-GST

Genpact India Pvt Ltd Vs UoI

GST - Petitioner is a Business Process Outsourcing (BPO) Service Provider located in India -  Challenge in the instant petition is to the order dated 15.02.2021 passed by the Additional Commissioner CGST (Appeals) Gurugram wherein it has been held that the services provided by the petitioner are in the nature of "Intermediary Services" as per Section 2(13) of the IGST Act and do not qualify as "export of services" in terms of Section 2(6) of the Act and thereby rejecting the refund claim of unutilized Input Tax Credit (ITC) used in making zero rated supplies of services without payment of Integrated Goods and Service Tax.

Held: 

+ The primary issue that arises for consideration is as to whether the petitioner would be covered under the expression "intermediary" as defined under the provisions of the IGST Act and consequently the BPO services rendered by the petitioner under the Master Services Sub-Contracting Agreement (MSA) be treated as "intermediary services" ?

+ Section 2 (6) of the IGST Act lays down the conditions which need to be fulfilled for qualification of a service as "export of services". A conjoint reading of Section 13 (2) and Section 13 (8) clarifies the manner for determining the place of supply of services where location of supplier or location of recipient is outside India. Generally, "place of supply" of services is the location of the recipient, except in case of certain specified services. 

+ For "intermediary" services, the place of supply is the location of the supplier. Section 16 (1) (a) inter alia provides that the export of services amount to "zero rated supply". Section 16 (2) provides that credit of input tax may be availed for making zero rated supplies. Section 54 of the CGST Act prescribes the manner in relation to claiming refund by tax payers, mainly covering the eligibility and prescribed timelines for filing the refund claim application. A taxpayer engaged in “export of services” without payment of GST is eligible to claim refund of unutilized input tax credit.

+ By way of passing the impugned order dated 15.02.2021 findings have been recorded that petitioner Genpact India Pvt. Ltd. provides services on behalf of  Genpact International Incorporated  [GI] and as such there is a principal-agent relationship. Further, the petitioner is arranging and facilitating the supply of services between GI and its customers and while doing so, petitioner is acting as an "intermediary". It has further been held that petitioner is not providing services on "its own account". That apart, it has been observed that there has been a material change in the definition of "intermediary" under the GST regime and consequently the petitioner cannot benefit from the orders of refund that had earlier been passed under the service tax regime.

+ The recitals of the MSA provide that GI has sub-contracted the petitioner for providing the services to its customers. It is clear therefrom that the petitioner is engaged by GI for actual performance of BPO services and information technology services to the customers of GI. Petitioner would be held responsible for all risk related to performance of services which would be akin to services provided on "its own account".

+ The MSA dated 01.01.2013 entered between the petitioner and GI is clearly for the purpose of sub-contracting services to the petitioner by GI. These are the very services which GI was contractually supposed to provide to its own customers.

+ As per definition of "intermediary" under Section 2(13) of the IGST Act the following three conditions must be satisfied for a person to qualify as an "intermediary" -  First, the relationship between the parties must be that of a principal-agency relationship. Second, the person must be involved in arrangement or facilitation of provisions of the service provided to the principal by a 3rd party. Third, the person must not actually perform the main service intended to be received by the service recipient itself. Scope of an "intermediary" is to mediate between two parties i.e. the principal service provider (the 3rd party) and the beneficiary (the agents principal) who receives the main service and expressly excludes any person who provides such main service "on his own account".

+ A bare perusal of the recitals and relevant clauses of the MSA do not in any manner indicate that petitioner is acting as an "intermediary" so as to fall within the scope and ambit of the definition of "intermediary" under Section 2 (13) of the IGST Act. Such clauses cannot also be interpreted to conclude that the petitioner has facilitated the services. The said clauses are in relation to the modalities of how the actual work would be carried out and do not in any manner establish that the petitioner was required to arrange/facilitate a 3rd party to render the main service which has actually been rendered by the petitioner.

+ It would not be out of place to refer to an order in original dated 25.01.2018 passed by the Assistant Commissioner, Division-East-1, GST, Gurugram, granting refund of Rs.26,34,83,928/- for the period April-June 2016 and July-September 2016 after making a detailed analysis of the MSA and holding that the petitioner cannot be treated as as "intermediary".  It has gone uncontroverted that such order has since become final as no appeal has been filed at the instance of the respondents.

+ In the impugned order, the department has chosen to deviate from the view taken in the order in original dated 25.01.2018 on the ostensible basis that there has been a change in law w.e.f. 01.07.2017 i.e. with the onset of the GST regime.  Bench finds such view to be wholly mis-conceived.

+ In the pre-GST regime, the term "intermediary services" was defined under Rule 2 (f) of the Place of Provision of Service Rules, 2012. Under the 2012 Rules "intermediary services" were defined to mean a broker/an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the 'main' service) or a supply of goods, between two or more persons, but does not include a person who provides the main service on his account.

+ A perusal of the definition of "intermediary" under the service tax regime vis-a-vis the GST regime would show that the definition has remained similar. Even as per Circular 159/2021 dated 20.09.2021 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (GST Policy Wing), the scope of "intermediary" services has been dealt in para 2 thereof. In para 2.2 it stands clarified that the concept of "intermediary" was borrowed in GST from the Service Tax Regime. The circular after making a reference to the definition of "intermediary" both under Rule 2 (f) of the Place of Provision of Service Rules, 2012 and under Section 2 (13) of the IGST Act clearly states that there is broadly no change in the scope of "intermediary" services in the GST regime vis-a-vis the service tax regime except addition of supply of securities in the definition of "intermediary" in the GST law.

+ Bench also finds that in the impugned order dated 15.02.2021 there has been a clear misreading of the ruling in the case of Infinera ( 2020-TIOL-08-AAAR-GST ) while observing that there has been a material change in the definition of "intermediary" under the GST regime.

+ Accordingly, in the light of such position wherein there is no change in the legal position i.e. with regard to the scope and ambit of "intermediary" services under the service tax regime vis-a-vis the GST regime and there being no change of facts as it is the MSA of 2013 which continues to operate, the department cannot take a different view for different periods. [M/s Radhasoami Satsang Soami Bagh, Agra Versus Commissioner of Income Tax =  2002-TIOL-745-SC-IT  refers.]

+ In Bharat Sanchar Nigam Ltd. = 2006-TIOL-15-SC-ST-LB , Supreme Court had reiterated that where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view.

+ During the course of arguments, Senior Standing Counsel for the respondents would concede that there is no separate agreement entered between the petitioner and GI's customers. In no manner as such can the petitioner be equated to be an agent or broker. 

+ The findings as regards the petitioner to be an agent is in contra-distinction to the clear stand taken by the department in the previous round of litigation.

+ It is undisputed that the petitioner has an agreement only with the GI.

+ Pursuant to the sub-contracting arrangement as per MSA, the petitioner provides the main service directly to the overseas clients of GI but does not get any remuneration from such clients. Pursuant to the arrangement, it is GI which gets paid by its customers to whom the services are being provided directly by the petitioner. Nothing has been brought on record to show that the petitioner has a direct contract with the customers of GI. Still further, there is nothing on record to show that petitioner is liaisoning or acting as an "intermediary" between GI and its customers. 

+ All that is evident from the record is that the petitioner is providing the services which have been sub-contracted to it by GI. As a Sub-contractor, it is receiving fee/charges from the main contractor i.e. GI for its services. The main contractor i.e. GI in turn is receiving commission/agents from its clients for the main services that are rendered by the petitioner pursuant to the arrangement of sub-contracting. Even as per the afore-noticed circular dated 20.09.2021 and in reference to para 3.5 it stands clarified that sub-contracting for a service is not an "intermediary" service.

+ In the present case, Bench finds that in the written statement reference is made to a Transfer Pricing Report as also to draw a distinction between two categories of supplies as per MSA i.e. main supply and the ancillary supply. The passing of the impugned order is sought to be justified that the main supply takes place between GI and its customers whereas it is the ancillary supply which is provided by the applicant to facilitate the provision of the main supply.  Bench finds that the written statement seeks to justify the impugned order on grounds which are not even part of the impugned order and which is clearly impermissible in law.

+ For the reasons recorded, Bench is of the considered view that the impugned order dated 15.02.2021 holding the petitioner to be an "intermediary" under Section 2 (13) of the IGST Act, cannot sustain.

+ The same is quashed and consequently the order in original dated 14.03.2019 granting refund of Rs.26,34,61,625/- in favour of the petitioner is restored.

+ It is further directed that the benefit of this order shall enure to the petitioner for grant of subsequent refunds as well.

- Writ petition is allowed: PUNJAB AND HARYANA HIGH COURT

2022-TIOL-1403-HC-MAD-GST

SSG Apparels Vs Deputy Assistant Commissioner GST (Central Taxes)

GST - Petitioner challenges an order cancelling its registration - While filling the form for registration, the factory address of the petitioner had been included twice under the column 'additional places of business in the state' and, therefore, to rectify the error they had attempted to submit an application for amendment of the registration certificate - However, while filling the application Online, the Accountant had selected 'cancellation' from the drop down menu instead of 'modification' and thus the impugned order has come to be passed cancelling the registration with effect from 01.05.2020 - Counsel for Revenue submits that  the cancellation was effected only at the request of the petitioner and, therefore, it is for the petitioner to seek revocation of the same, in terms of the revisional remedies available. 

Held:   In light of the fact that it was an inadvertent mistake and in the interests of substantial justice, Bench accepts the explanation tendered by the petitioner and holds that the request for cancellation was only a simple and inadvertent error - The impugned order is set aside and the petitioner is permitted to make an application seeking restoration of registration, setting out the correct details of the principal and additional places of business -  Since the petitioner states that it will not be granted access online in view of the cancellation of registration, it is permitted to make the application manually before R1/Deputy Commissioner, GST (Central Taxes), who shall restore the registration within a period of two (2) weeks: High Court [para 4, 5]

- Petition disposed of: MADRAS HIGH COURT

2022-TIOL-1402-HC-ALL-GST

Subodh Kumar Garg Vs UoI

GST - The instant bail application has been filed in the matter of offence relating to Section 132(1)(c) of the  Act, 2017  - Allegation is  that applicant has availed input tax credit (ITC) of Rs.8.76 crores - Applicant submits that  investigation is going on in the matter and the liability is only to the extent of Rs.3,30,59,527/- and not as alleged hence applicant is entitled to be released on bail since the amount is below 5 crores; that the Applicant has deposited differential amount of Rs.41,69,267/- - Counsel for Revenue submits that  the applicant has taken credit from 21 non existing firms whose G.S.T. registrations have been obtained by submitting false/ forged documents and, therefore, his  bail application has rightly been rejected by the courts below.

Held:  Applicant has been found to be dealing with 18 non-existent firms and their details have been furnished in the complaint - Their registrations have already been cancelled - The applicant's case is that at the time of business with the aforesaid firms they were duly registered and allegation that firms were fake is yet to be proved - It has not been explained how applicant will tamper with the evidence or influence the witnesses - Merely because of seriousness and magnitude of economic offence, the bail cannot be denied to the accused - Applicant is not stated to have any criminal antecedents and is also not shown to be habitual offender -  In the present case, the applicant has further clarified in his statement dated 15.3.2022/16.3.2022 that he has taken Input Tax Credit on proper invoices issued by the supplier of the goods - Inasmuch as the aforesaid goods were transported to the applicants premises through valid E-way Bills, Bilty and other transport documents and payment has been made through proper banking channel - As such, the applicant is liable to be released on bail as no case under Section 132(1) (c) and read with section 132(5) of the Act is made -  The Supreme Court in case of Sanjay Chandra Vs. CBI, [2012 1 SCC 40] has observed that in deciding the bail applications an important factor which should certainly be taken into consideration by the court is the delay in concluding the trial - Taking into consideration the course of investigation adopted by the Department, the evidence so collected, the trial will take considerable time and it may happen, if denied bail, the judicial custody of applicant can be prolonged beyond the statutory period of punishment which is five years -  Taking into consideration the provisions of law and the fact that the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant -  The seriousness of the offences alone is not conclusive of the applicant's entitlement to bail, as held by the Supreme Court (supra) -  The applicant is in jail since 16.3.2022 and has no criminal history - W ithout expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail - The bail application is allowed subject to conditions as laid down, inter alia ,  furnishing bank guarantee of Rs. 50 lacs : High Court

- Application allowed: ALLAHABAD HIGH COURT

2022-TIOL-1401-HC-JHARKHAND-GST

ESL Steel Ltd Vs Bharat Heavy Electricals Ltd

GST - Rule 96A - Export under bond or LUT - By order dated 10th August, 2022, this Court taking note of the delay caused in taking a decision on the application  by Respondent-BHEL  for extension of timeline of 90 days by the Commissioner, North CGST & Central Excise Commissionerate, Kolkata, directed the counsel representing the respondent no. 2 to take instruction on this issue - It was felt that if extension of timeline is not granted for making the export, tax has to be paid - And if extension is granted, the supplier would get the benefit of exemption from tax in excess of the amount calculated at the rate of 0.1% in respect of the supplies made -  Respondent no. 1 has filed counter affidavit and brought on record the letter dated 6th October, 2022 issued by the office of the Principal Commissioner, CGST & Central Tax, Kolkata North Commissionerate, by which it has been communicated that the competent authority has been pleased to grant extension of time limit for export under LUT in terms of Rule 96A(1)(a) of  CGST Rules, 2017  ; and that now it is upto to the petitioner to approach its jurisdictional GST authorities to seek refund of the voluntary payment of tax made by it on account of differential amount of IGST -  Petitioner informs that he shall approach the jurisdictional GST authorities for refund of the tax already paid and / or its reversal and, therefore, the petition be disposed of.

Held : The original dispute for which the petitioner came before the Bench was the incidence of tax liability that had fallen upon the petitioner on account of delay in making export within the specified time in terms of the notification dated 23rd October, 2017 - Petitioner had to deposit considerable amount of tax in absence of such extension of time as has been taken note of in the order dated 23rd February, 2022 - Since such extension of time has been granted now by the competent authority under CGST in terms of Rule 96A(1)(a) of  CGST Rule, 2017  in respect of LUTs made under seven export invoices, the instant grievances raised before this court do not survive - It is now upto the petitioner to approach its jurisdictional GST authority for refund of the tax deposited and / or its reversal, which he may do so - Writ petition is accordingly disposed of: High Court [para 10]

- Petition disposed of: JHARKHAND HIGH COURT

2022-TIOL-1400-HC-DEL-CUS

Vijay Kumar Vs CBIC

Cus -   Petitioner has filed the present petition seeking quashing of Clause 6 of Regulation 6 of Customs Brokers Licensing Regulations, 2018 (CBLR, 2018), insofar as it permits an eligible applicant a total of six (6) attempts to clear the prescribed written and oral examination for obtaining the Customs Broker License -  Petitioner states that he is desirous of appearing for the exam scheduled in the month of March, 2023, but since it would be his 7th attempt, he is debarred from appearing as per the provisions of the impugned Clause 6 of Regulation No. 6 of CBLR, 2018 - Therefore, in these circumstances the Petitioner is seeking a direction to Respondent that he may be permitted to make a 7th attempt.

Held:  As per Clause 6 of Rule 6 of CBLR, 2013, an applicant was permitted a maximum period of seven (7) years from the date of his/her original application to pass both the written as well as oral examinations - Thus, an applicant was allowed a 'period' for passing his/her written and oral examinations - The said clause makes no reference to 'attempts' -  In contrast, under the existing Clause 6 of Regulation 6 of CBLR, 2018, what is permissible to an applicant is six (06) 'attempts' - In fact, existing Regulation 6 of CBLR, 2018, gives more flexibility to an applicant in clearing the exam as the six (6) attempts are not required to be attempted in six (6) years but may be attempted in a longer period -  Issue raised in the present petition stands squarely covered by a decision of the predecessor bench of this Court in Manish Rishishwar = 2020-TIOL-196-HC-DEL-CUS , wherein the Petitioner's plea of quashing of the Clause 4, 5 & 6 of Regulation 6 of CBLR, 2018 on identical pleas was dismissed - Moreover,  it is evident from the record that the Petitioner himself has appeared for four (4) written examinations starting from 2019 to 2022 as per CBLR, 2018 and was not aggrieved by the said Regulations at the relevant time -  Since the challenge sought to be raised in the present petition has already been negated by Predecessor Bench, the present petition and the pending application are dismissed: High Court [para 10 to 14]

- Petition dismissed: DELHI HIGH COURT

2022-TIOL-1015-CESTAT-AHM

Cosmo Films Ltd Vs CCE & ST

CX - The Adjudicating authority in impugned order held that assessee have not produced supporting documents/ work sheet and amount of cenvat credit availed on services and therefore denied the benefit of Rule 6(5) of Cenvat Credit Rules, 2004 - Whereas assessee claims that they have produced documents and details before Adjudicating authority - Assessee also submits said Annexures before Tribunal - Impugned order is set aside and Adjudicating Authority is directed to pass a speaking order after carefully examining the evidences on record: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2022-TIOL-1014-CESTAT-DEL

Dinesh Chandra Dubey Vs CCGST, Excise & Customs

ST - The appellants herein were receiving commission from M/s. Adarsh Credit Co-operative Society Ltd. for providing various services including that of 'Consultants' - A specific intelligence was gathered by the Officers of DGGI, Jaipur Zonal Unit about appellants to have received commission from M/s. ACCSL in lieu of providing "Business Auxiliary Services" being provided to said M/s. ACCSL - But the service tax was not being paid by the appellants on the amount of the said commission received - Accordingly, the appellants were enquired vide letters dated 01.02.2018 in Appeal No. ST/51585/2019 and dated 21.06.2018 in Appeal Nos. ST/51021/2021, ST/51022/2021, ST/51023/2021 and ST/51024/2021 - The appellants vide their respective separate replies had responded to the query of the Department but after several repeated reminders to them. From their responses and from the scrutiny of the documents including Form 26AS and ITRs as were provided by the appellants/service providers, department observed that appellants have received respective commission from M/s. ACCSL for the respective periods as mentioned in the table above for providing 'Business Auxiliary Services' - Though services are taxable post 01.07.2012 but the appellants have not discharged their service tax liability even since then - Accordingly, the appellants herein were served with the respective show cause notices (as mentioned in the table above), proposing the recovery of respective amount of service tax along with interest and the appropriate penalties as mentioned in the table above - The said proposal have been confirmed by both the adjudicating authorities except for some benefit of exemption for a particular period.

Held - There was the scope and belief with the appellants for entertaining the doubt about no liability of theirs to pay the service tax that the application of Section 73(1) of the Finance Act, 1994 the proviso thereof gets ruled out and resultantly, the extended period of limitation is held to have wrongly invoked by the Department - The adjudicating authorities below are held to have wrongly confirmed the demand for the extended period of limitation - As a result, the orders under challenge are hereby set aside, however, if there is any demand for the normal period in any on theses 5 appeals same stands confirmed, rest of the demands set aside. Consequent of these findings, 5 of these appeal are hereby allowed with respect to demands pertaining to the extended period of respective SCN: CESTAT

+ Section 73(1) of the Finance Act, 1994 deals with the recovery of service tax not levied or not paid or short levied or short paid or erroneously refunded. According to which the recovery may be called for by the Central Excise Officer within the period of 30 months. However, the demand could be raised for a period beyond the said period of 30 months to the maximum of 5 years. But for the reason of fraud or collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this act or of the rules made there under with intent to evade payment of duty. I draw my support from the decision of Hon'ble Supreme Court in the case of Continental Foundation Jt. Venture Vs. Commr. Of C. Ex. Chandigarh-I reported as 2007 (216) E.L.T. 177 (S.C.) = 2007-TIOL-152-SC-CX , wherein it has been held that the expression 'suppression' as has been used in the proviso to Section 73(1) of the Finance Act, 1994 is accompanied by very strong words as 'fraud' or 'collusion' and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 73(1) of the Finance Act, 1994 the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of any incorrect statement with the knowledge that the statement was not correct;

+ Though the proviso to Section 73(1) of the Finance Act, 1994 carves out an exception and permits the authority to exercise their power recovery within 5 years from the relevant date in the circumstances in the proviso, one of it being suppression of facts. I also relied upon the decision of Hon'ble Supreme Court in the case of Pushpam Pharmaceuticals Company Vs. Collector of C.Ex., Bombay reported as 1995 (78) E.L.T. 401 (S.C.) , wherein it has been held that the meaning of the word 'suppression' both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. I also draw my support from the decision of the Supreme Court in the case of Cosmic Dye Chemical Vs. Collector of Central Excise, Bombay;

+ no doubt in view of Pagariya Auto Center (supra), the larger Bench decision, the services in question were held to be taxable. Otherwise also the services of commission agents are not covered under negative list under Section 66D of the Service Tax Act. The same has nowhere been denied by the appellant. Hence, there arises no doubt as far as the liability of the appellant to pay the service tax on the amount of commission received is concerned, however, within the normal period of their respective show cause notices. From the above discussed law it becomes abundantly clear that mensrea/the intent to evade the tax liability is the core for invoking the extended period over the normal period. Appellants apparently have mentioned themselves to be under the bona fide belief of still not being liable under service tax. Based on the said belief only they neither had applied the registration nor had ever filed the service tax return. The reason for such bona fide belief stands corroborated from the fact that the service tax was neither collected by them from M/s. ACCSL nor accordingly, was paid by the appellant. There is no denial to the fact that appellants have not charged service tax from M/s. ACCSL. There is also no denial to the fact that the entire amount of commission was shown by the appellants in their income tax returns and the tax liability under direct taxes was duly discharged by the appellants. These perusals and undisputed facts are sufficient for me to hold that there was no mala fide intent on the part of the appellants to evade the payment of service tax. They rather were under bona fide belief. This Tribunal in the case of Omega Financial Services Vs. Commissioner of C. Ex., Cochin reported as 2011 (24) S.T.R. 590 (Tri.-Bang.) has held that assessee's bona fide belief cannot be doubted and where the assessee proves reasonable cause for such belief and for the failure to not to discharge its liability, the penalty shall not be imposed upon such assessee. This Tribunal had set aside the penalty in that case by invoking Section 80 of Finance Act, 1994.

- Appeal partly allowed: DELHI CESTAT