IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T 1. CENTR.EXCISE APPEAL No. 74 of 2006 UNION OF INDIA V/S M/S AMIT KUMAR MAHESHWARI & ANR. 2. CENTR.EXCISE APPEAL No. 70 of 2006 UNION OF INDIA V/S M/S LAKE CITY SERVICE CENTRE & ANR. 3. CENTR.EXCISE APPEAL No. 3 of 2007 U.O.I. V/S M/S NARENDRA & CO.& ANR. 4. CENTR.EXCISE APPEAL No. 26 of 2007 UNION OF INDIA V/S M/S SHRI DEWAL TOUR & TRAVELS & ANR. 5. CENTR.EXCISE APPEAL No. 54 of 2007 U.O.I. V/S M/S BOHRA PRATISTHAN PVT.LTD.& ANR. Date of Judgment : 8th Dec. 2008 PRESENT HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. REPORTABLE Mr. VK MATHUR & Mr. RISHABH SANCHETI, for the appellant. Mr. VIKAS BALIA & Mr. TRIBHUVAN GUPTA, for the respondents. BY THE COURT : (PER HON'BLE GUPTA,J.) All these five appeals involve common question of law, being as to whether the circular issued by the Central Board of Excise & Customs dated 20.9.2004, as referred to in the order under appeal, governs the case of the respondent? Appeals no. 26/2007, 70/2006, 3/2007, and 74/2006 were admitted on different dates, by framing substantial question of law, may be differently worded but purportedly to cover this controversy. However, appeal No. 54/2007 was admitted on 23.10.2007, without framing any substantial question of law. However, in view of the above, the said question is hereby framed in this Appeal No. 54/2007 also. The facts in all the five appeals are different, as they are different assessees, carrying on different types of business, did not get registration as required by the relevant chapter, introduced by the Finance Act, 1994, relating to imposition of Service Tax, hereafter referred to as the “Service Tax Act”, and notices were issued. Thereupon adjudication of liability of amount of tax and penalty was made. The matter was carried in appeal, and then the matter was finally carried to the Tribunal. The learned Tribunal passed different orders, holding, that the Government of India Ministry of Finance, vide D.O. Letter dt. 20.9.2004, framed an Amnesty Scheme, and according to that scheme, found the assessee to be entitled to the benefit of Scheme, and thus the penalty imposed was set aside. However, in some cases where the 2 penalty to the extent of 25%, which was deposited by the assessee, was maintained, and rest was set aside. The same learned Member passed this type of orders in the matters arising out of Appeal No. 26/2007, 70/2006, and 3/2007, while another Member Shri C.N.B. Nair found the case to be covered by earlier judgment of the Tribunal, being C.C.E. Bhopal Vs. Bharat Security Services & Worker reported in 2005(188)ELT-454. Likewise, in the judgment forming subject matter of subsequent Appeal No. 54, the same learned Member, who passed the orders in appeal forming subject matter of Appeal Nos. 3, 70 and 26, passed the impugned order to the same effect, following the judgment in Bharat Security Services & Worker's case, and another judgment in Amit Kumar Maheshwari Vs. CCE reported in 2006 STR-506. Thus, in substance, the controversy is, as to whether the assessee is entitled to the benefit of Amnesty Scheme, or not? 3 The necessary facts in this regard are, that admittedly none of these assessees got themselves registered after promulgation of Amnesty Scheme, and during its subsistence, rather they were already registered, and the liability of tax, in some cases related to the period anterior to the registration, while in some cases it relates to the period subsequent to the registration, and its non payment of tax timely has attracted penalties as above. It is also not in dispute, that in all matters, the requisite tax, interest etc. had already been paid, before expiry of the period provided in the aforesaid Amnesty Scheme, being 30th October, 2004. We may gainfully reproduce the so called scheme. It may be observed, that the papers made available to us show, that as such there is no scheme, rather it is only a communication in the form of D.O. letter, from the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, addressed to the Chief Commissioners, and encloses therewith certain proformas of application for registration, acknowledgment, and declaration. However, the benefits flow from the contents of the communication itself, and therefore, we may gainfully quote the communication dt. 20.9.2004, which reads as under:- “D.O.F.No.137/39/2004-CX.4 20th September 2004 My Dear Chief Commissioner, Subject: Extra-ordinary taxpayer friendly scheme for instant registration of service providers. Hon'ble Finance Minister has launched an extra-ordinary taxpayer friendly Scheme for 4 registration of those service providers who have not got themselves registered so far. The details of the scheme are enclosed as annexure. This scheme aims to register all service providers on the basis of their declaration and who had earlier failed to register themselves with the department due to ignorance or any other reason with full waiver of penalty. This scheme is effective with immediate effect. As per the scheme any service provider can make a declaration to the department with regards to his past liabilities towards the service tax and interest payable. Without any inquiry or questions, the departmental authorities will accept the declaration and on the spot give a registration to the service provider, Penal proceedings against the person approaching under this scheme will be completely waived off. This scheme commences with immediate effect and will be operational only up-to 30th October 2004 and no extension will be allowed. You should publicise the scheme and organize sufficient numbers of camps to facilitate the service providers who wish to avail of the relaxations given under the scheme through out your jurisdiction. You should instruct your officers to be courteous and polite, they should not put any uncomfortable questions to the persons opting for the scheme. You should mobilize all the resources available with you in a judicious manner, so that enough number of officers is available for implementing the scheme. Since the scheme has been launched at the instance of Finance Minister you should give a very wide publicity in print media to the scheme in your areas through Banners, hoardings, press releases etc. Hon'ble Finance Minister has also sanctioned a sum of Rs.20 lakhs for each zone to undertake the publicity work in relation to Service Tax. Since ministry has taken considerable pains in framing the scheme and also provided funds at your disposal to make the scheme a success, it expects excellent results from you and your officers. Gear up your machinery and make the scheme a success. Any failure in implementing the scheme at any level will be viewed very seriously. With best wishes, Yours sincerely sd/- (S.Chandra) Encl: as above 5 All Chief Commissioners of Central Excis e . OFFICE OF THE CHIEF COMMISSIONER(JZ) CENTRAL EXCISE (JAIPUR ZONE), JAIPUR C.NO. CCO(JZ) ST/38/2004 DATE : 20.9.2004 Copy Forwarded to the Commissioner, Central Excise, Jaipur-I and Jaipur-II for information and necessary action. Sd/- Deputy Commissioner(CCO) Speed Post Central Excise Commissioner, Jaipur-II C.No.V(ST)30/37/JP-II/04/2119-23 Dt.21.9.04 Copy forwarded to the DeputyComm/Asstt.Comm. C. Ex. Div. Ajmer, Bhilwara, Chittorgarh, Jodhpur & Udaipur for information with regards to send weekly report for every Monday positively. Sd/- 21/9/04 Asstt. Comm. (ST) ************* 137/39/2004-CX.4 Annexure Form of Declaration To, The Designated Authority: _____________________ Sir, I hereby make the declaration for being registered in terms of Section 69 of the Finance Act, 1994 (32 of 1994). 1.Name :_________________________________ 2.Address of the business premises :_____________ 3.Date of Commencement of Business:______________ 4.Taxable Services :____________________________ 5.Date from which service tax is payable:________ Turnover of the services since the date when service tax became payable: 6 Financial Year Turn over of taxable services rendered Service Tax payable Interest payable, if any 6.The declaration with regards to the Service tax and interest payable given above is correct and true to the best of my knowledge. 7.Along-with this declaration I am enclosing the details in Form ST 1 for being registered with Service Tax department. 8.Signature :_________________________________ 9.Place :_________________________________ 10.Date :_________________________________ Notes: a. The service tax is payable @ 5% upto 14th May 2003, 8% for period between 14th May 2003 and 10th September 2004 and 10% for period after 10th September 2004. b. For period after 10th September 2004, education cess @ 2% of Service Tax payable is also to be paid. c. Interest is payable @ 24% upto 11th May 2002, 15% for period between 11th May 2002 and 10th September 2004 and 18% for period after 10th September 2004. d. In case were services have become taxable from date in middle of Financial Year indicate turnover from that date. _________________________________________________ Acknowledgement To, ___________________ ___________________ ___________________ Sir, Your declaration dated __________ has been received. Your registration number in form ST2 is enclosed. You should deposit the amount of Service Tax and interest as indicated by above within seven days and report compliance. Encl: Form ST-2 Signature of the Officer receiving the declaration Place: Date: 7 ***************** FORM ST-1 Application for registration under section 60 of the Finance Act 1994 (32 of 1994) 1.Name of the assessee : 2.Address of the assessee : 2A.PAN Number : 3.Address of the premises to be registered : 4.Category of the service : 5.Tax/telex and phone number : 6.Form of organization (individual/company/ partnership, etc.) : 7.Additional Information required in the case of stock-broker (a) Name of the member, with code No. : (b) Name of stock exchange registered with : (c) Date of admission of membership : (d) Whether member of more than one stock exchange. If so, please give name of the stock exchange with code numbers : (e) Registration number allotted by securities and Exchange Board of India (copy of certificate) registration may be enclosed or a copy of application for registration with SEBI may be enclosed : 8.I/We _________________ agree to abide by all the provisions of Service Tax Rules, 1994 and any order issued there under. 9.I/We _________________ declare to the best of my/our knowledge and belief that the information furnished herewith is true and complete. 8 Place: Date: Signature of assessee or his authorised representative. ***************** F.No.137/39/2004-CX.4 Government of India Ministry of Finance Department of Revenue Central Board of Excise and Custom New Delhi, the 22nd September, 2004 To All Chief Commissioners of Central Excise. Subject:Extra-ordinary taxpayer friendly scheme for registration of service providers. I am directed to refer to the D.O. of even number dated 20th September, 2004 on the above mentioned subject. D.G.(ST) has pointed out some error in the annexed “declaration form”. The revised declaration forms are enclosed herewith for necessary action at your end. Yours faithfully, Sd/- Encls:As above (Sanjiv Srivastava) Deputy Secretary (CX.4) Office of the Chief Commissioners Central Excise (JZ) Jaipur CN CCO(JZ) ST/38/2004 3701 Date: 23.9.2004 Copy forwarded to the Commissioner Central Excise, Jaipur-I and Jaipur-II in continuation to this office endorsement of even No. NIL dated 20.9.2004 for information and necessary action please. Sd/- Deputy Commissioner (CCO) Central Excise Commissionerate, Jaipur-II C.No. V(ST) 30/37/JP-II/04 Dated:24.9.04 Copy forwarded to the Deputy/Asstt. Commissioner, Central Excise Division, Ajmer/Bhilwara/Chittorgarh/Jodhpur/Udaipur for 9 information & necessary action. Sd/ 24/9/04 Asstt. Commmr.(ST) ***************** Annexure Form of Declaration To, The Designated Authority: ____________________ Sir, I hereby make the declaration for being registered in terms of Section 69 of the Finance Act, 1994 (32 of 1994). 1. Name : 2. Address of the business premises : 3. Date of Commencement of Business : 4. Taxable Services : 5. Date from which service tax is payable: Turnover of the services since the date when service tax became payable: Financial Year Turn over of taxable services rendered Service Tax payable Interest payable, if any 6.The declaration with regards to the Service tax and interest payable given above is correct and true to the best of my knowledge. 7.Along-with this declaration I am enclosing the details in form ST 1 for being registered with Service Tax department. 8.Signature :____________________________ 9.Place :____________________________ 10.Date :____________________________ 10 Notes a. The service tax is payable @ 5% up to 14th May 2003, 8% for period from 14th May 2003 and up- to 9th September 2004 and 10% from 10th September 2004. b. For period from 10th September 2004, education cess @ 2% of Service Tax payable is also to be paid. c. Interest is payable @ 24% up to 11th May 2002, 15% for period from 11th May 2002 and up-to 9th September 2004 and 13% from 10th September 2004. d. In case were services have become taxable from date in middle of Financial Year indicate turnover from that date. _________________________________________________ Acknowledgement To, ___________________ ___________________ ___________________ Sir, Your declaration dated __________ has been received. Your registration number in form ST2 is enclosed. You should deposit the amount of Service Tax and interest as indicated by above within seven days and report compliance. Encl: Form ST-2 Signature of the Officer receiving the declaration Place: Date: ***************** Firstly the question is, as to whether this scheme has a statutory force, so as to term it as a taxing statute. Learned counsel for the Revenue drew our attention to the provisions of Section 83 of the Service Tax Act, whereby provisions of Section 37B of the Central Excise Act, 1994 have been made applicable, and contended, that this circular has been issued in accordance with Section 37B of the Central Excise Act. Section 37B of the Central Excise Act reads as under:- 11 “37B INSTRUCTIONS TO CENTRAL EXCISE OFFICERS- The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963(54 of 1963), may, if it considers it necessary or expedient so to do for the purposes of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods, issue such orders, instructions and directions to the Central Excise Officers as it may deem fit, and such officers and all other persons employed in the execution of this act shall observe and follow such orders, instructions and directions of the said Board: Provided that no such orders, instructions or directions shall be issued- (a) so as to require any Central Excise Officer to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Commissioner of Central Excise (Appeals), in the exercise of his appellate functions.” If the aforesaid scheme, or the communication dt. 20.9.2004 is read in conjunction with Section 37B, it is clear that it is not covered by Section 37B. The communication emanates from the Hon'ble Finance Minister, who has launched extra-ordinary taxpayer friendly scheme, while Section 37B does not envisage in launching of any such scheme, rather it comprehends powers of the Board (Central Board of Excise and Customs) where-ever it considers it necessary or expedient so to do, for the purposes of uniformity in the classification of excisable goods, or with respect to levy of duties of excise on such goods, issue such orders, instructions and directions. In addressing communication dt. 20.9.2004 the Central Excise Board has not even purported to consider any expediency or necessity, for the purpose of uniformity with respect to levy of duties of excise on such goods, to issue such orders, instructions and directions. Simply 12 because the desire of the Hon'ble Finance Minister is published through conduit pipe of the Central Excise Board, it does not have the effect of clothing it with statutory powers, or to attach to it statutory efficacy available consequent upon Section 37 and Section 37B. Thus, in our view, it cannot be said to be statutory notification, issued in exercise of powers under Section 37B. Then, the question is, as to what is the nature of this communication, and the obvious answer is, that it is only an administrative instruction, issued by the Hon'ble Finance Minister, purportedly, to provide benefit to the persons, who earlier failed to register themselves with the department, and in substance is intended to cast the net of service tax wider and wider, and in order to augment the revenue the concessions provided in the communication were sought to be thrown open. Obviously, therefore, the communication has to be read, interpreted, understood, and appreciated, with this spirit, viz. to provide benefit to the defaulters on the one hand, and to cast the net of service tax wider and wider, so also to augment the revenue, on the other hand. With this preface, it may also be noticed, that the term “Scheme” as such has very many parameters to be complied with, while in the present case the communication simply conveys launching of some extra ordinary tax payer friendly scheme, and no such scheme has seen the light of the day, except this communication, which only encloses therewith certain proformas. As such it cannot be said to 13 be any “Scheme”, in true sense of the term. With this background it may be noticed here, that this communication dt.20.9.2004 had been subject matter of adjudication by various Tribunals, in umpteen number of cases. Before going through those cases, we think it appropriate to first deal with the cases cited by the learned counsel for the Revenue, basically about principles of interpretation. The first judgment cited is the case of The Commissioner of Sales Tax, U.P., Lucknow Vs. Parson Tools and Plants, Kanpur, reported in AIR 1975 SC 1039, and learned counsel referred to para 22 onwards. In this case, the question was, that an appeal was filed before the Dy. Commissioner which was dismissed in default. Then application for restoration thereof was filed, which remained pending for quite some time. In the meantime, the provision authorising dismissal of appeal in default was struck down. Obviously therefore, the original dismissal was treated to be dismissal on merits, and then against that order, revision was filed. Limitation for revision was one year, which, on showing sufficient cause, could be extended for another six months, while the revision was filed after more than 18 months, and the period of time spent in prosecuting the restoration application was sought to be excluded under Section 14 of the Limitation Act, or on its analogy. In that fact situation, the Hon'ble Supreme Court, by referring to various previous judgments of Privy Council etc., based on Section 37(5) of the Arbitration Act, held, that where upper time limit has 14 been prescribed, and sufficient cause is shown, delay can be condoned, in the maximum, only upto a specified time limit, and the analogy of Section 14(2) cannot be imported, apart from the fact, that Section 14, as such, is not applicable, as the authorities under the taxation statutes are not courts, but are administrative authorities. In our view, on principle there is no dispute about this legal proposition. The next case relied upon is, in Bharti Telecom Ltd. Vs. The Commissioner of Customs, reported in AIR 2002 SC 74. In this case, there was an amnesty scheme, wherein where the assessee had wrongly availed the credit of MODVAT on inputs, and availed the duty free clearance of the goods, claiming exemption under Notification No. 203/92, under the Value Based Advance Licence, in cases, where the assessee was not entitled to avail MODVAT credit, he was required to reverse it, and to pay interest, and other consequences were to flow, for that, an amnesty scheme was floated, requiring interest to be deposited for the period between the date of export and date of reversal, which interest was required to be deposited by 31.1.1997. In that case, the amount was deposited on 7.2.1997 only. In that background, interpreting the scheme, it was held, that such scheme or exemption notification have to be strictly construed, and that the provision in the notification, for deposit of interest by the specified date, has to be interpreted strictly, in the manner stated in the notification, and on no other basis. It was held, that it is well settled, that in taxing statute there is no room for any intendment, and 15 regard must be had to the clear meaning of the words, and that, the matter should be governed only by the language of the notification. In our view, so far as the provision of deposit, under the communication dt.20.9.2004 is concerned, being 30.10.2004, there is no dispute, that it is required to be strictly construed, and in all the cases in hand, admittedly, the amount has been deposited before the said date, as obviously if the amount had not been deposited, the assessee would not have been entitled to any benefit of this communication. There is also no dispute about the proposition, that in taxing statute there is no room for any intendment, and regard must be had to the clear meaning of the words, and that the matter should be governed only by the language of the notification. The difficulty is, that this communication dt.20.9.2004 is neither notification, nor a taxing statute, rather as held above, it is only an administrative instruction, granting benefits and reliefs, in an attempt to cast service tax net wider and wider, and to augment the revenue. The next judgment relied upon is, in Union of India & Ors. Vs. Wood Papers Ltd., reported in (1990) 4 SCC 256. In this case also, it has been held, that exemption notification has to be read as a whole, and is required to be considered as a whole. There is no dispute about the legal proposition propounded therein. The next case relied upon is in CIT Delhi Vs. Modi Spinning and Weaving Mills Co. Ltd., reported in 1992 16 Suppl(1) SCC 32. This judgment in our view, is a judgment on its own facts, and is of no assistance to either side. 17 Now we take up the cases cited on either side, which have considered this communication dt.20.9.2004. Of course, we have not been made available the copy of judgment in Amit Kumar Maheshwari's case. However, the learned counsel for the assessee first relied upon the judgment in Bharat Securities C.C.E. Bhopal Vs. Bharat Security Services & Worker reported in 2005(188)ELT-454. This is a judgment rendered by Shri S.S. Kang, the learned Single Member (Vice President of the Principal Bench, New Delhi) and in that case, the orders in appeal had set aside the penalties imposed on assessee, as the assessee had paid service tax along with interest prior to 20.9.2004, by holding that Extra Ordinary Tax Payer Friendly Scheme was circulated vide letter dt.23.9.2004, whereunder any service provider, who got registered upto 30.10.2004, are not liable for any penal action and thus, in view of the immunity from penal action, no penalty could be imposed on the assessee, as they had paid service tax prior to 30.10.2004. A contention was raised therein, that the assessee was already registered prior to the floating of the scheme and, therefore, are not entitled to benefit of scheme, and it was held, that the service provider who got registered, and paid service tax, during Extra Ordinary Tax Payer Friendly Scheme upto 30.10.2004, are not liable to pay any penalty, therefore, no infirmity was found in the order of the Commissioner, as the assessee had paid service tax prior to 30.10.2004, they are not liable to any penalty. This judgment is dated 13.6.2005 (28.4.2005). Then the learned counsel placed reliance on a 18 judgment rendered by a learned Single Member M.V. Ravindran dt.5.12.2006, rendered in Appeal No. 312/2006, which has been passed, following the judgment in Amit Kumar Vs. CCE, Jaipur-II, reported in 2006(2) STR 506, and C.C.E. Bhopal Vs. Bharat Security Services & Worker's case. It would suffice to say, that Appeal NO.54/2007 in this bunch is filed against this very judgment dt.5.12.2006. The next judgment relied upon is Tele Tech Communication Vs. Commissioner of C. Ex. dt.4.6.2007, rendered by learned Single Member, Shri C.N.B. Nair, reported in MANU/CE/8215/2007. In that case, the Tribunal had found, that the scheme makes it clear, that service providers were welcome to avail of the scheme,