- (1.) The challenge is made to a show-cause notice dated 21st March, 2013 issued by the Additional Commissioner, Service Tax Commissionerate, Kolkata primarily on the ground that invocation of Rule 5 (1) of the Service Tax (Determination of Value) Rules 2006 is wrongly made when the said provision has been declared ultra vires by the Division Bench of the Delhi High Court in case of Intercontinental Consultants & Technocrats Pvt. Ltd. vs-- Union of India, 2013 29 STR 9. Since the facts adumbrated in the writ petitions are not disputed, the respective counsels addressed the Court on the pure question of law.
(2.) Shorn of unnecessary details, the petitioner was awarded a contract on 1st March, 2006 by M/s Prism Cement Ltd. for carrying out loading, shifting and feeding of coal and gypsum by roads. The said agreement provides that M/s Prism Cement Ltd; shall provide High Speed Diesel (HSD) free of cost for transportation of the aforesaid goods by road. It is undisputed that the petitioner have been paying service tax on the amount charged from the said Company over the services taxable with the service tax which admittedly does not include the cost of the HSD. The Service Tax Authority and Comptroller and Auditor General of India (CERA) initiated audit of the petitioner's account and issued spot memo as well as show-cause notices for the period 2002-2003 to 2008- 2009. In course of such audit, a show-cause notice dated 30th March, 2010 was issued raising a demand of Rs. 1,10,08,867/- for the period from 2004-2005 to 2008-2009 for rendering the services to M/s Tisco for conversion of the coal to the coke, intra-port transportation of ores and processing of pyroxenite. The said show-cause notice was challenged before this Court in W.P. No. 124 of 2011 on other grounds including the ground of limitation. The Court quashed the said show-cause notice as the service tax authority could not satisfy the requirement of proviso to Section 73 (1) of the Finance Act, 1994. The said order is assailed in an intra-court appeal which is still pending. Subsequently the impugned show-cause notice dated 21.03.2013 is issued solely on the ground that consumption of HSD provided by the service provider free of cost having used for providing taxable services, such cost have to be included in the taxable value. The demand sought to be raised pertain to the period 2007-2008 to 2010- 2011 and part of the period of 2011-2012 (April 2011 to September 2011).
(3.) The learned Advocate appearing for the petitioner submits that Section 73 Sub-Section 1 of the Finance Act, 1994 provides a limitation of eighteen months from the relevant date for issuance of the notice where any service tax has not been levied or paid or has been sought levied or sought paid or erroneously refunded to be served with the notice on a person chargeable with service tax requiring him to showcause why such amount should not be paid by him. It is submitted that proviso to Section 73(1) of the said Act extends the period of eighteen months to five years in case of fraud, collusion, willful mis-statement, suppression of fact or contravention of any provision of that Chapter or the Rules made therein. He thus submits that the show-cause notice, which covers 2007-2008, is ex-facie bad being beyond the period of five years. It is further submitted that none of the ingredients incorporated in the proviso to Section 73 (1) of the said Act is spelt out in the said showcause notice for invocation of the extended period.;