CONSORTIUM CLINICAL RESEARCH PVT LIMITED vs -COIMBATORE

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. I

Service Tax Appeal No.41928 of 2016

(Arising out of Order-in-Original Nos. CBE/ST/23 & 24/2016-Commr. dated
30.06.2016 passed by Commissioner of Central Excise, Customs and Service
Tax, Coimbatore)

M/s. Consortium Clinical
Research Pvt. Ltd. …. Appellant
9/41, Sri Kalki Gardens,
Sugunapuram,
Kuniyamuthur Post,
Coimbatore-641 008.

VERSUS

Commissioner of GST & Central Excise … Respondent
Coimbatore Commissionerate
No.6/7, ATD Street
Race Course Road
Coimbatore 641 018.
AND

Service Tax Appeal No. 41929 of 2016

(Arising out of Order-in-Original Nos.CBE/ST/23 & 24/2016-Commr. dated
30.06.2016 passed by Commissioner of Central Excise, Customs and Service
Tax, Coimbatore)

M/s. Consortium Clinical
Research Pvt. Ltd. …. Appellant
9/41, Sri Kalki Gardens,
Sugunapuram,
Kuniyamuthur Post,
Coimbatore-641 008.
VERSUS

Commissioner of GST & Central Excise … Respondent
Coimbatore Commissionerate
No.6/7, ATD Street
Race Course Road
Coimbatore 641 018.

APPEARANCE :
Shri M. Karthikeyan, Advocate for the Appellant
Ms. Anandalakshmi Ganeshram, Authorized Representative for the
Respondent


CORAM :
HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
HON’BLE MR. AJAYAN T.V., MEMBER (JUDICIAL)

FINAL ORDER Nos.40988-40989/2026

DATE OF HEARING : 25.03.2026
DATE OF DECISION : 04.09.2026

2

Per: Shri Ajayan T.V.

These two connected appeals are directed against the
common impugned order comprised in Orders-in-Original Nos.
CBE/ST/23 & 24/2016-Commr. dated 30.06.2016, passed by the
Commissioner of Central Excise, Customs and Service Tax, Coimbatore
(“the Adjudicating Authority”). By that order a cumulative demand of
Service Tax of Rs. 65,25,515/- has been confirmed against the Appellant,
M/s. Consortium Clinical Research Pvt. Ltd. (“CCRP”), together with
interest under Section 75 and penalties. Since both appeals arise from a
common set of facts and a common order, they were heard together at
and are disposed of by this common Final Order.
2. The relevant facts are that CCRP is a Clinical Research Organisation
(“CRO”) based at Coimbatore. It provides contract research services to
the pharmaceutical, biotechnology and medical device industries,
including bio-pharmaceutical development, bio-assay development, pre-
clinical and clinical research, clinical trial management and
pharmacovigilance in relation to the testing and analysis of newly
developed drugs on human participants.
3. As early as the year 2010, the Superintendent (Preventive), Coimbatore
Commissionerate addressed letters to CCRP calling for particulars of its
clinical research activities. It is not in dispute that CCRP responded to
each of those letters and placed before the Department the entire nature
and character of its business. No proceedings followed at that stage.
4. In the year 2014 investigation was conducted stating that intelligence
gathered by the Service Tax Survey, Research and Intelligence Wing
indicated that CCRP had rendered “Technical Testing and Analysis
Service” without discharging the applicable Service Tax. CCRP was called
upon to furnish audited balance sheets for 2009-10 to 2013-14, Form
26AS statements and details of the nature of its activities, and it furnished
all of these. By further correspondence dated 21.04.2014 and
26.05.2014, CCRP additionally furnished a write-up on the “Clinical
Research Work Flow”, copies of its agreements with the Sponsors, namely
M/s. Ind-Swift Ltd. of Chandigarh, M/s. Issar Pharma (P) Ltd. of
Hyderabad and M/s. Accutest Research Laboratories (I) Pvt. Ltd., and
sample agreements executed with individual investigators.
5. By letter dated 02.12.2014, the Department specifically asked CCRP
whether it held any permission from the Drugs Controller General of India

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(“DCGI”) to conduct clinical trials. Following CCRP's reply dated
20.12.2014, and a statement recorded from its MD, Show Cause Notices
(SCNs) as detailed below came to be issued, alleging short payment of
service tax on two distinct counts as shown.
SCN
Reference
Nature of
Service
Period of
Demand
Tax Demanded
(Rs.)
3/2015-
Commr.
dated
08.04.2015
Technical Testing
& Analysis Service
01.10.2009 to
31.03.2014
60,78,676.00
3/2015-
Commr.
dated
08.04.2015
Commercial
Coaching &
Training
01.10.2009 to
31.03.2014
2,19,395.00
19/2015-DC
dated
11.09.2015
Technical Testing
& Analysis Service
01.04.2014 to
31.07.2014
2,27,444.00
Total 65,25,515.00
6. CCRP in its replies dated 06.05.2015 and 09.10.2015, which incidentally
remained uncontroverted by the Department at any stage of these
proceedings, explained that under the regulatory scheme administered
by the DCGI, permission to conduct a clinical trial is granted only to the
Sponsor of the drug, that is, the pharmaceutical company that owns the
molecule. It explained further that no mechanism exists, and none has
ever existed, by which a Clinical Research Organisation as such may itself
apply for or be granted DCGI approval in its own name. A CRO such as
CCRP is engaged by the Sponsor under a contract of agency to execute
and co-ordinate the very trial that the DCGI has approved, and it registers
the trial with the Clinical Trials Registry of India (CTRI).
7. Notification No. 11/2007-ST dated 01.03.2007, and from 01.07.2012
Entry 7 of the Mega Exemption Notification No. 25/2012-ST dated
20.06.2012, exempted the testing and analysis of newly developed drugs
on human participants where undertaken by “a Clinical Research
Organisation approved to conduct clinical trials by the Drugs Controller
General of India.” On this footing, CCRP took the position that its testing
services stood exempt, and that it could not, in consequence, have
collected Service Tax from its Sponsors, who were themselves not liable
to bear such a levy.

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8. Apart from reiterating its stand on exemption in its replies dated
06.05.2015 and 09.10.2015, CCRP also pointed to the correspondence
of the year 2010 as showing that the Department was throughout aware
of, and had inquired into, the very activity now sought to be taxed, so
that no suppression could be attributed to it. While disputing liability
generally, CCRP did not specifically contest the proposal to demand Rs.
2,19,395/- on the “Commercial Training or Coaching” head.
9. After due process of law, the Adjudicating Authority, vide the impugned
order dated 30.06.2016, held that the extended period of limitation
under the proviso to Section 73(1) of the Act was rightly invoked. The
demand of Rs. 63,06,120/- towards Service Tax on “Technical Testing
and Analytical Service” for the period 01.10.2009 to 31.07.2014, was
confirmed on the finding that DCGI approval had been granted to the
Sponsors and not to CCRP, so that the exemption was unavailable to
CCRP. The Adjudicating Authority also confirmed a further demand of
Rs. 2,19,395/- towards Service Tax on “Commercial Training or
Coaching Service” for the period 01.10.2009 to 31.03.2014. The
demands were confirmed along with appropriate interest and penalties
were also imposed, a penalty of Rs. 62,98,071/- under Section 78, a
penalty of Rs.22,744/- under Section 76, a penalty of Rs.10,000/- under
Section 77(2) and a penalty of Rs.50,000/- under Section 77(1)(a).
Aggrieved, CCRP is in appeal before this Tribunal.
10. Shri M. Karthikeyan, learned Advocate for the Appellant, made in
substance a three-fold submission. First, and on the merits of the larger
of the two demands in issue, he contended that the requirement of
“approval by the DCGI” in the exemption entry could not be read to
require an independent approval of the CRO itself, since only Sponsors
are in fact granted such approval. Such a reading would import into the
exemption a condition no CRO could ever fulfil, and would reduce the
exemption, insofar as it purports to benefit CROs, to a dead letter.
Secondly, and independently, Ld. Counsel urged that the demand of Rs.
2,19,395/- confirmed on the head of Commercial Training or Coaching
proceeds on a mischaracterisation of the underlying transaction. It was
pointed out that the amount was not a fee charged by CCRP as a
commercial training or coaching centre, but a deposit collected from
certain employees who were trained and appointed on the condition that
they would serve CCRP for a minimum guaranteed period of one year,
and recovered only where such an employee resigned before completing

5

that period. Such a recovery is in the nature of compensation for breach
of the employee's undertaking, and does not answer the description of
consideration for any taxable service, whether under the pre-negative
list definition of commercial training or coaching service or under Section
66E(e) of the Act. Thirdly, and as a further and independent ground
applicable to both demands, Ld. Counsel argued that the extended
period of limitation could not have been invoked. The facts material to
the demands, namely the nature of CCRP's business, its status as a CRO,
the identity of its Sponsors and the basis of its claim to exemption, stood
disclosed to the Department and were actively inquired into by it as far
back as 2010, several years before either show cause notice came to be
issued. There was, in these circumstances, no suppression, and much
less, any suppression accompanied by an intent to evade tax, of the
kind indispensable to a valid invocation of the proviso to Section 73(1).
11. Ms. Anandalakshmi Ganeshram, learned Authorised Representative for
the Respondent Department, supported the impugned order in its
entirety. On the larger demand, she submitted that the plain language
of the exemption notification requires the Clinical Research Organisation
itself to be the approved entity, and that CCRP has at no stage produced
any approval issued in its own name. The benefit of an exemption
notification, she argued, must, particularly after the law declared by the
Constitution Bench in Commissioner of Customs v. Dilip Kumar and
Company, be construed strictly against the assessee. On the demand
relating to Commercial Training or Coaching, she supported the
reasoning of the Adjudicating Authority and submitted that the true
nature and correct characterisation of the amount collected is a matter
for appreciation of the evidence on record. On limitation, she maintained
that the correspondence of 2010 was confined to preliminary inquiries
that did not proceed further, and could not substitute for the disclosures
statutorily required at the time of registration and return filing, which
CCRP admittedly did not make until July 2014. She relied on decisions
in Synchron Research Services P. Ltd. Vs. Commr. of S.T., Ahmedabad,
2011 (24) S.T.R. 654 (Tri. – Ahmd.) and Commr. of CGST, Ex. Cus. &
S.T. Indore Vs. Diabetes Thyroid Hormone Research Institute Pvt. Ltd.,
2019 (24) G.S.T.L. 560 (Tri. – Del.)
12. We have heard the rival submissions and perused the materials
available on record.
13. We find that the issues that arise for our determination are:

6

(I) Whether the Technical Testing and Analysis Service rendered by
CCRP, is exempt from Service Tax under Notification No. 11/2007-ST
and, with effect from 01.07.2012, under Entry 7 of Notification No.
25/2012-ST;
(II) Whether the demand of Rs. 2,19,395/- confirmed on the head of
Commercial Training or Coaching is sustainable;
(III) Whether the extended period of limitation under the proviso to
Section 73(1) of the Act was rightly invoked; and
(IV) whether the penalties imposed are sustainable.
14. On the issue of entitlement to the exemption notifications, we find that
the Notification No. 11/2007-ST dated 01.03.2007, operative until its
rescission with effect from 01.07.2012, exempted the taxable service
specified in Section 65(105)(zzh) of the Act, being technical testing and
analysis service, where “provided or to be provided by a Clinical
Research Organisation approved to conduct clinical trials by the Drugs
Controller General of India,” in relation to testing and analysis of newly
developed drugs, including vaccines and herbal remedies, on human
participants, to ascertain the safety and efficacy of such drugs. With
effect from 01.07.2012, materially identical language was carried into
Entry 7 of the Mega Exemption Notification No. 25/2012-ST dated
20.06.2012, which exempts “services by way of technical testing or
analysis of newly developed drugs, including vaccines and herbal
remedies, on human participants by a clinical research organisation
approved to conduct clinical trials by the Drugs Controller General of
India.”
15. The Adjudicating Authority read this language to mean that the CRO
itself must be the holder of an approval issued by the DCGI. Finding that
no such approval had been issued to CCRP, and that the approvals on
record had instead been granted to the Sponsors, M/s. Ind-Swift Ltd.,
M/s. Issar Pharma (P) Ltd. and M/s. Accutest Research Laboratories (I)
Pvt. Ltd., the Adjudicating Authority held the exemption to be
inapplicable. The Ld. Authorised Representative has defended this
reading by reference to the rule of strict construction of exemption
notifications restated by the Constitution Bench in Commissioner of
Cus (Import) Mumbai v. Dilip Kumar & Company , 2018 (361) ELT
577 (SC) , where it was held that any ambiguity in the eligibility clause

7

of an exemption notification must enure to the benefit of the Revenue
and not the assessee.
16. We have given this submission our careful and anxious consideration,
for it raises a question of some difficulty, and we would not wish to be
understood as diluting the discipline that Dilip Kumar and Company
enjoins upon this Tribunal. That discipline, however, applies where a
notification is genuinely ambiguous, that is, where the text is reasonably
capable of being read in more than one way and a Court is asked to
resolve that ambiguity. Whether that stage is even reached here is a
question we need not answer in the abstract, for the precise interpretive
question before us is no longer res integra.
17. In Deenanath Mangeshkar Hospital & Research Centre v.
Commissioner of Central Excise & Customs, Pune-III, 2019 (11)
TMI 1511 - CESTAT Mumbai, a coordinate Bench of this Tribunal was
confronted with an identical objection under this very notification. The
assessee there conducted trials under tripartite agreements bearing
DCGI-approved protocol numbers and stood duly registered with the
Clinical Trial Registry of India, yet had not been separately approved as
an institution by the DCGI. The Tribunal examined Rule 122-DAB of the
Drugs and Cosmetics Rules, 1945, which describes a “clinical research
organisation” only as “an individual or an organisation (commercial,
academic or other) to which the sponsor may transfer or delegate some
or all of the tasks, duties and/or obligations regarding a clinical trial
provided that all such contractual transfers or obligations are defined in
writing.” It held that the expression ‘clinical research organization’ does
not find definition within these Rules and it would therefore appear that
the ‘clinical research organization’ is a generic description for agencies
that undertake clinical trial of new drugs. It also found that clinical trials
are conducted under permission granted to the Sponsor by the Licensing
Authority under Rule 122-DA read with Rule 122-DAC, and that there
was “nothing on record” to show that “a general permission of the Drugs
Controller General of India” was mandated as a precondition to the
exemption. It accordingly held the trials exempt and set aside both the
demand and the penalty consequent upon it.
18. The facts of the present case admit of no meaningful distinction. CCRP
conducted its clinical trials under written agreements with its Sponsors,
M/s. Ind-Swift Ltd., M/s. Issar Pharma (P) Ltd. and M/s. Accutest
Research Laboratories (I) Pvt. Ltd., each of whom held DCGI-approved

8

permission for the very trials in question. CCRP's case, at no stage
controverted by the Department, is that its trial activity stood registered
with the Clinical Trial Registry of India. On the ratio of Deenanath
Mangeshkar Hospital, which we respectfully agree with and adopt, this
suffices to bring CCRP within the description of “a Clinical Research
Organisation approved to conduct clinical trials by the Drugs Controller
General of India” in Notification No. 11/2007-ST and, correspondingly,
in Entry 7 of Notification No. 25/2012-ST.
19. Ld. A.R. relied on Commissioner of CGST, Central Excise & Service
Tax, Indore v. Diabetes Thyroid Hormone Research Institute Pvt.
Ltd., 2019 (24) GSTL 560 (Tri-Del) , a decision that cuts the other
way on its own facts. In the said decision the assessee claiming the
exemption was, on the facts found, merely a trial site, being the
institution at which the clinical trial was physically conducted, and not
itself a Clinical Research Organisation. Since the CRO function, the
Sponsor, the trial site and the investigator are separate and distinct
roles in the scheme of a clinical trial, this Tribunal held that the
exemption, being available only to the entity actually functioning as the
CRO, could not be claimed by a participant occupying merely the trial-
site role, and it set aside an order of the Commissioner (Appeals) that
had held otherwise. That decision does not assist the Department here,
for CCRP's role in the present case is not that of a trial site. CCRP is, on
the impugned order's own description and never disputed by the
Department at any stage, a Clinical Research Organisation engaged in
bio-pharmaceutical development, bio-assay development, pre-clinical
and clinical research, and clinical trial management for its Sponsors.
CCRP thus occupies the CRO role that the appellant in Diabetes Thyroid
Hormone Research Institute was found not to occupy. That decision is
accordingly distinguishable on facts and does not detract from the
conclusion reached above. Its ratio, that the exemption runs to the
entity actually performing the CRO function and not to every participant
in the trial, is if anything consistent with and supportive of the conclusion
we have reached here.
20. This conclusion is reinforced, rather than displaced, by the regulatory
scheme itself. The impugned order too doesn’t contradict that, the
regulatory scheme nowhere empowers the DCGI to grant an approval
to a Clinical Research Organisation independently of its approval of a
Sponsor's trial. To read the exemption as additionally requiring a free-

9

standing institutional approval that the regulator does not, and did not
at the relevant time, issue to any CRO would impose a condition no CRO
could ever satisfy. Such a reading offends the settled canon that the law
does not require the performance of an impossibility, lex non cogit ad
impossibilia .
21. We emphasise that we have not overlooked the Ld. Authorised
Representative’s reliance on Commissioner of Cus (Import) Mumbai
v. Dilip Kumar & Company , 2018 (361) ELT 577 (SC) . It flows from
the said decision that an ambiguity in the eligibility clause of an
exemption notification is to be resolved in favour of the Revenue. It does
not instruct that a clause be treated as ambiguous where a coordinate
Bench, construing this very notification against this very regulatory
scheme, has already found it to bear one sensible meaning. There being,
on the state of the coordinate bench decision, no genuine ambiguity left
to resolve, Dilip Kumar and Company is not attracted. We accordingly
hold that the Technical Testing and Analysis Service rendered by CCRP
is exempt from Service Tax under Notification No. 11/2007-ST for the
period up to 30.06.2012, and under Entry 7 of Notification No. 25/2012-
ST for the period thereafter. It follows, on this finding of merits alone,
that the demand of Rs. 63,06,120/- confirmed under this head cannot
be sustained. The other decision relied on by the Ld. A.R. i.e. Synchron
Research Services P. Ltd. is distinguishable in the facts of the case.
22. Coming to the second issue, we find that the show cause notice and the
impugned order proceeded on the footing that the sum of Rs. 2,19,395/-
represented a fee collected by CCRP for commercial training or coaching
rendered by it as a business. The record, does not reveal any evidence
relied upon by the Department in the SCN. However, the Adjudicating
Authority has chosen to rely on a portion of the statement of the MD of
the appellant, which to our mind discloses a materially different
transaction. CCRP recruited certain employees for training and
appointment on the condition that each such employee would serve
CCRP for a minimum guaranteed period of one year. A deposit was taken
from the employee at the time of such training and appointment,
refundable on completion of that period. Where an employee resigned
before completing the guaranteed period, the deposit already collected
was retained, or an equivalent amount was recovered from the
employee's dues. It is this recovery, and not any fee charged to outside

10

trainees for a commercial training or coaching service, that has been
brought to tax.
23. For the period up to 30.06.2012, the taxable service in question was
“commercial training or coaching service” under Section 65(105)(zzc)
read with Section 65(26) of the Act, which presupposes a commercial
training or coaching centre rendering training or coaching to a trainee
for a fee or other consideration paid for the imparting of skill or
knowledge. The relationship between CCRP and the employees from
whom this deposit was recovered was, throughout, one of employer and
employee under a contract of service. Any training CCRP gave them was
given in that capacity and for its own business purposes, and not as a
service rendered by a commercial training or coaching centre to a
trainee in the sense contemplated by Section 65(105)(zzc). No part of
the amount recovered was a fee charged for imparting knowledge or
skill. It was security taken to guard against the cost and disruption that
the premature exit of a trained employee causes to an employer,
refundable where the condition of minimum service stood fulfilled. Such
a recovery falls outside the scope of commercial training or coaching
service altogether.
24. Assuming any part of this demand were referable to the period after
01.07.2012, when the negative list regime came into force, the amount
would still not answer the description of consideration for a declared
service under Section 66E(e) of the Act, which brings to tax an
agreement to refrain from an act, to tolerate an act or a situation, or to
do an act, entered into for consideration. The Hon'ble Madras High Court
in GE T & D India Limited v. Deputy Commissioner of Central
Excise, Chennai, 2019 (12) TMI 1566 , held that notice pay
recovered by an employer from an employee who leaves without
completing the notice period does not give rise to the rendition of any
service, by either the employer or the employee, and does not attract
Section 66E(e). This view has since been consistently followed. In T he
Lalit Mumbai v. Commissioner of CGST & Central Excise-Delhi
East, 2025 (3) TMI 680 - CESTAT New Delhi , and in Cosmo First
Limited v. Commissioner of C.E. & S.T., Vadodara-I, 2025 (10)
TMI 9 - CESTAT Ahmedabad, this Tribunal, extended the same
reasoning to amounts recovered by an employer from an employee on
premature resignation before completion of a minimum agreed period
of service, holding such amounts to be compensation for breach of the

11

employment contract and not consideration for any agreement to
tolerate an act or situation. This reasoning applies with equal force to a
deposit taken from an employee and forfeited on premature resignation,
which is compensation of precisely this character. For these reasons, the
demand of Rs. 2,19,395/- confirmed on the head of Commercial Training
or Coaching cannot be sustained on merits. Whether tested against the
pre-negative list definition of commercial training or coaching service or
against Section 66E(e) of the post-negative list regime, the amount in
question is not consideration for any taxable service. It is compensation
recovered from certain employees for breach of their undertaking to
serve CCRP for a minimum guaranteed period, and stands on the same
footing as the notice pay and bond forfeiture recoveries considered in
GE T & D India Limited, The Lalit Mumbai and Cosmo First Limited.
Whether this demand is also barred by limitation, along with the balance
of the demand on Technical Testing and Analysis Service, is examined
next.
25. As to the third issue, i.e., whether the extended period of limitation has
been rightly invoked, it is worthwhile to recall the statutory text at the
outset. Section 73(1) of the Act, as it stood at the relevant time,
empowered the proper officer to serve notice within the normal period
of one year, extended to eighteen months with effect from 28.05.2012,
of the relevant date. The proviso extends that period to five years where
the tax has escaped assessment “by reason of fraud, collusion, wilful
mis-statement, suppression of facts, or contravention of any of the
provisions of this Chapter or of the rules made thereunder with intent
to evade payment of service tax.” On a long and unbroken line of
authority, each of the five ingredients of the proviso must be attended
by an intent to evade payment of tax. The provision does not
contemplate a suppression that is merely inadvertent, or an omission
that is innocent of that intent.
26. In Pushpam Pharmaceuticals Co. v. Collector of Central Excise,
1995 (78) ELT 401 (SC), the Supreme Court held that the expression
“suppression of facts” in this very context “can have only one meaning
that the correct information was not disclosed deliberately to escape
from payment of duty”, and further that “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.” This
principle was reaffirmed in Continental Foundation Joint Venture v.

12

Commissioner of Central Excise, Chandigarh , 2007 (216) ELT
177 (SC) . It was applied with particular emphasis in Uniworth
Textiles Ltd. v. Commissioner of Central Excise, Raipur , 2013
(288) ELT 161 (SC), where the Supreme Court held, in terms that
bind this Tribunal, that “mere non-payment of duties is not equivalent
to collusion or wilful mis-statement or suppression of facts”, and that
something positive, over and above mere inaction or failure, is
indispensable before the extended period can be invoked.
27. Tested against this settled position, the invocation of the extended
period in the present case cannot be sustained. It is not disputed, and
could not be disputed since it appears from the impugned order itself,
that the Department, through the Superintendent (Preventive),
addressed itself to the precise question of CCRP's clinical research
activities as early as the year 2010, and that CCRP responded fully to
that inquiry. A suppression contemplated by the proviso to Section 73(1)
is a suppression from the Department. It is difficult to conceive how
CCRP can be said to have suppressed from the Department a fact the
Department had itself elicited and was already investigating several
years in advance of the show cause notices. The most that can be said
against CCRP is that it did not, of its own motion, register itself or file
returns during the disputed period. That omission proceeded, as the
record bears out, from a stated and consistently maintained belief that
its testing services stood exempt under Notification No. 11/2007-ST, a
belief resting on a tenable, if ultimately debatable, reading of that
notification. An interpretation of a fiscal exemption that is open to
genuine debate, honestly entertained and disclosed the moment the
Department made inquiry, is the very antithesis of the deliberate,
positive act of concealment that the law requires before the
extraordinary period of five years can be pressed into service. We are
accordingly unable to sustain the finding in the impugned order that the
extended period was rightly invoked.
28. This finding disposes of the demand of Rs. 2,19,395/- confirmed on the
head of Commercial Training or Coaching, for the entire period
01.10.2009 to 31.03.2014, reinforcing on the ground of limitation, the
conclusion already reached on merits in the discussion of the issue
above. As regards the demand on Technical Testing and Analysis
Service, a part is relatable to the period from on or about October 2013
onward, covered by the second show cause notice dated 11.09.2015 in

13

its entirety and by a portion of the first, and would, on a mechanical
application of the normal period, survive this finding on limitation; that
part nonetheless stands set aside independently, on the finding already
recorded on merits on the issue as discussed above. We accordingly hold
that the extended period of limitation invoked in the impugned order
was not tenable in law.
29. Since no part of the Service Tax demanded in the impugned order
survives, the demand for interest under Section 75 and the penalty
imposed under Section 78 cannot be sustained and must fall with the
principal demand. Section 78, in its own terms, presupposes the very
ingredients of fraud, collusion, wilful mis-statement, suppression of
facts or contravention with intent to evade that we have found, on the
question of limitation, to be absent. In the given facts and circumstances
and for the reasons above, the other penalties imposed are also found
to be untenable and liable to be set aside.
30. For the reasons recorded above, the impugned order is liable to be set
aside in its entirety. Ordered accordingly.
The appeals are allowed, with consequential relief, in law, if any.
( Order pronounced in open court 04.09.2026 )




(AJAYAN T.V.) (VASA SESHAGIRI RAO)
Member (Judicial) Member (Technical)


vl