MS AMBIKA CATERERS AND DECORATORS vs PATNA

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA

REGIONAL BENCH – COURT NO. 1

Service Tax Appeal No. 75699 of 2025

(Arising out of Order-in-Appeal No. 272/Pat/S.Tax/Appeal/2024-25 dated 05.02.2025
passed by the Commissioner (Appeals) of Customs, Central G.S.T. and Central Excise,
nd
Patna, 2 Floor, C.R. Building (Annexe), Bir Chand Patel Path, Patna – 800 001)

M/s. Ambika Caterers and Decorators
Prop.: Manish Kumar Singh,
17, Emerson Road, Danapur Cantonment,
Patna – 801 503 (Bihar)
: Appellant

VERSUS

Commissioner of C.G.S.T. and Central Excise
Patna-I Commissionerate,
Central Revenue Building (Annexe), Bir Chand Patel Path,
Patna – 800 001 (Bihar)
: Respondent

APPEARANCE:
Shri Amit Kumar, Advocate,
Smt. Mandira Routh, Advocate,
For the Appellant

Shri Argho Mukherjee, Authorized Representative,
For the Respondent

CORAM:
HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO. 76535 / 2026

DATE OF HEARING: 13.10.2026
DATE OF DECISION: 28.10.2026
ORDER: [PER SHRI ASHOK JINDAL]
The appellant is in appeal against the impugned
Order-in-Appeal No. 272/Pat/S.Tax/Appeal/2024-25
dated 05.02.2025, passed by the Ld. Commissioner
(Appeals) of Customs, Central Goods and Services Tax
and Central Excise, Patna, whereby the demand of
Service Tax to the extent of Rs.17,15,341/- (inclusive
of cesses) has been upheld against the appellant,
together with applicable interest and penalties
thereon.

Page 2 of 15

Appeal No.: ST/75699/2025-DB


2. The facts of the case are that M/s. Ambika
Caterers and Decorators (hereinafter referred to as
“the appellant”), holders of Service Tax Registration
No. ANPS4269GSD003, is a proprietorship concern
engaged in the sale of goods and other activities from
its registered premises situated at 17, Emerson Road,
Danapur Cantonment, Patna – 801 503, Bihar. The
appellant had also been filing their ST-3 returns
during the material period. During the relevant period,
the appellant had rendered services to various service
recipients, namely, (i) Central Railway Division,
Nagpur, (ii) Bihar Institute of Public Administration &
Rural Development (iii) Central Institute of Plastic
Engineering and Technology, Hazipur (iv) Central
University of South Bihar (v) Chakankya National Law
University, Patna and (vi) Water & Land management
Institute.
3. The proceedings originated from information
received by the Revenue from the Directorate General
of Systems & Data Management, CBIC, New Delhi,
indicating a discrepancy between the data obtained
from the Maharashtra Commercial Taxes Department
and the gross value of services declared by the
appellant in its ST-3 returns for the Financial Year
2015–16. Acting upon the said information, the Anti-
Evasion Wing of the Central Excise and Service Tax
Commissionerate, Patna-I, called upon the appellant
to furnish relevant documents and particulars for
ascertaining its Service Tax liability for the financial
years 2015–16 to 2017–18, up to June 2017.
Although the appellant did not initially respond to the
departmental communication, it duly furnished a reply
on 09.06.2020, enclosing, inter alia, the Letter of
Acceptance issued by Central Railway, Nagpur, the
Maharashtra Sales Tax Return, audited balance sheets

Page 3 of 15

Appeal No.: ST/75699/2025-DB


and Form 26AS for the financial years 2015–16 to
2017–18.
3.1. Thereafter, in response to a further
communication issued by the Revenue on 02.11.2020,
the appellant, by its communication dated
05.11.2020, furnished copies of the agreements
entered into with Central Railway, Nagpur, the
Measurement Book pertaining to the contracts
executed for the said establishment, and the VAT
Returns filed in Bihar. The appellant also submitted
further documents vide letter dated 18.01.2020,
enclosing therewith a Letter of Intent dated
08.08.2014 issued by the Central Institute of Plastic
Engineering and Technology (CIPET), Hajipur, a Work
Order dated 07.10.2014 issued by the Central
University of Bihar, and the VAT Return for the period
from 01.04.2017 to 30.06.2017. Subsequently, in
response to the departmental requisition, the
appellant, by an e-mail dated 02.12.2020, also
furnished its audited balance sheet and Form 26AS for
the Financial Year 2014–15.
4. Upon scrutiny of the documents and particulars
so furnished, the Revenue formed the view that the
appellant had failed to discharge Service Tax on
services allegedly rendered during the period from
Financial Year 2014-15 (from October 2014) to
Financial Year 2016-17 (up to June 2017), which were
characterised by the department as comprising
outdoor catering services and cleaning/housekeeping
services. On the basis of the computation undertaken
during the course of the enquiry, the amount of
Service Tax alleged to be payable was initially
quantified at Rs. 77,98,063/-.

Page 4 of 15

Appeal No.: ST/75699/2025-DB


5. Consequently, a Show Cause Notice dated
24.12.2020 came to be issued to the appellant,
proposing recovery of Service Tax amounting to Rs.
77,98,063/-, along with interest under the applicable
provisions of the Finance Act, 1994, and penalties
under Section 78 and Section 77(1)(c)(ii) of the said
Act. The notice invoked the extended period of
limitation under the proviso to Section 73 of the
Finance Act, 1994, alleging suppression of the taxable
value with mala fide intent. In particular, the
department alleged that the appellant had
deliberately filed NIL returns and failed to disclose the
value of taxable services, notwithstanding the receipts
reflected in its income-tax returns, Form 26AS and
profit and loss accounts.
5.1. The matter was thereafter adjudicated by the
Joint Commissioner, CGST and Central Excise, Patna-
I. In the course of adjudication, the ld. adjudicating
authority (a) examined the appellant’s services
rendered to three educational institutions, namely,
the Central Institute of Plastic Engineering and
Technology, the Central University of South Bihar and
Chanakya National Law University, Patna, in respect
of which the adjudicating authority accepted the
availability of exemption under Serial No. 9 of
Notification No. 25/2012-ST dated 20.06.2012, as
amended, but held that, with effect from 01.04.2017,
the services rendered to educational institutions
became taxable consequent upon the withdrawal of
the exemption by Notification No. 10/2017-ST dated
08.03.2017; (b) further, in determining the taxable
value of outdoor catering services rendered to Central
Railway, Nagpur, and other institutions, the
adjudicating authority applied Rule 2C of the Service
Tax (Determination of Value) Rules, 2006, and

Page 5 of 15

Appeal No.: ST/75699/2025-DB


computed the taxable value at 60 per cent of the gross
value. Upon consideration thereof, the ld. adjudicating
authority dropped the proposed demand to the extent
of Rs. 18,06,042/- out of the total proposed demand
of Rs. 77,98,063/-, while confirming the balance
demand of Rs. 59,92,021/-, inclusive of cesses, for
the period from October 2014 to June 2017. The
appellant was also held liable to pay interest under
Section 75 of the Finance Act, 1994, and was visited
with an equal penalty of Rs. 59,92,021/- under
Section 78, in addition to a penalty of Rs. 10,000/-
under Section 77(1)(c)(ii) of the said Act.
5.2. Aggrieved by the adjudication order, the
appellant preferred an appeal before the
Commissioner (Appeals) of Customs, Central Goods
and Services Tax and Central Excise, Patna, who, vide
the impugned Order-in-Appeal No.
272/Pat/S.Tax/Appeal/2024-25 dated 05.02.2025,
granted partial relief to the appellant and reworked
the demand of Service Tax payable for the period in
dispute. In relation to the services rendered to Central
Railway, Nagpur, the Ld. Commissioner (Appeals),
upon consideration of the Maharashtra VAT Returns,
held that, to the extent the appellant had paid VAT on
the sale of materials, Service Tax could not be
separately levied once again on the value attributable
to such materials. The appellate authority also
reconsidered the exemption claimed in respect of the
services rendered to the aforesaid three educational
institutions and recomputed the benefit available
under Notification No. 25/2012-ST dated 20.06.2012,
as amended, for the period up to the withdrawal of
the exemption by Notification No. 10/2017-ST dated
08.03.2017. On the basis of the aforesaid
reconsideration, the Ld. Commissioner (Appeals)

Page 6 of 15

Appeal No.: ST/75699/2025-DB


upheld the Service Tax demand to the extent of
Rs.17,15,341/- (inclusive of cesses), together with
applicable interest and imposition of penalties under
Section 78 and Section 77(1)(c)(ii) ibid.
5.3. Against the said order, qua confirmation of the
impugned demand of Service Tax, along with interest
and penalties, the appellant is before us.
6. The Ld. Counsel appearing on behalf of the
appellant advanced various arguments, on facts and
in law. Without prejudice to their contentions on
merits, it was principally argued, inter alia, that the
impugned demand at the threshold is hit by time-bar
and cannot be sustained for the following reasons: -
(i) The Appellant, is engaged in sale of goods and
rendering of various services, including catering
services, and was duly registered under the
Service Tax law.
(ii) The Appellant regularly filed its statutory ST-3
returns during the relevant period.
(iii) The proceedings originated from an alleged
mismatch between certain departmental/third-
party data and the value of services declared by
the Appellant in its ST-3 returns.
(iv) The Show Cause Notice dated 24.12.2020 had

been issued alleging by the department for
invoked the extended period under Section
73(1) of the Finance Act, 1994 alleging
suppression of facts with intent to evade
payment of Service Tax. The period of allegation
is 2014-15 to 2017 June. The SCN had been
issued for more than 5 years and the appellant
had submitted the documents properly and filed
return properly , replied to the SCN , So the
extended period of limitation is not invoked.

Page 7 of 15

Appeal No.: ST/75699/2025-DB


(v) There is no cogent evidence of fraud, wilful
misstatement, deliberate suppression of facts or
any positive act undertaken by the Appellant
with intent to evade payment of Service Tax.
(vi) Consequently, the demand pertaining to the
extended period is barred by limitation and is
liable to be set aside.
(vii) In the absence of fraud, wilful misstatement or
suppression with intent to evade payment of
Service Tax, the penalty imposed under Section
78 of the Finance Act, 1994 is unsustainable.
(viii) Interest under Section 75 is consequential to a
legally sustainable Service Tax liability. Once
the principal demand is set aside, the
consequential interest and penalties cannot
survive.
6.1. In view of these submissions, it is the
appellant’s contention that the impugned order, to the
extent the same confirms the demand of Service Tax,
interest and penalties against them, is liable to be set
aside. Accordingly, it is prayed that the appeal be
allowed, granting consequential relief therewith.
7. On the other hand, the Ld. Authorized
Representative of the Revenue reiterated the findings
in the impugned order. Accordingly, he prayed for
rejection of the instant appeal.
8. Heard the parties and considered their
submissions.
9. Having carefully considered the submissions
advanced by both the sides, the grounds urged in
support of the present appeal and the material
available on record, we find that the dispute in the
present case emanates from the demand of Service

Page 8 of 15

Appeal No.: ST/75699/2025-DB


Tax raised against the appellant, M/s. Ambika
Caterers and Decorators, in respect of taxable
services alleged to have been rendered during the
period from October 2014 to June 2017, principally
characterised by the Revenue as outdoor catering and
cleaning/housekeeping services. The proceedings
were initiated by way of a Show Cause Notice dated
24.12.2020, which proposed recovery of Service Tax,
together with applicable interest and penalties, by
invoking the extended period of limitation under the
proviso to Section 73 of the Finance Act, 1994. The
notice proceeded on the allegation that the appellant
had suppressed the taxable value with an intent to
evade payment of Service Tax, inter alia, by filing NIL
returns and failing to disclose the value of taxable
services, notwithstanding the receipts reflected in its
income-tax returns, Form 26AS and financial
statements. Although upon adjudication and
subsequent appellate scrutiny, the demand was
substantially reduced, a portion of the demand
amounting to Rs.17,15,341/-, accompanied by
consequential interest and penalties, came to be
sustained under the impugned Order-in-Appeal.
10. At this juncture, without entering into the merits
of the issue, we deem it appropriate to examine the
contentions advanced by the appellant on the ground
of limitation. The question, therefore, that arises for
our consideration is whether, in the facts and
circumstances of the present case, the Revenue was
justified in resorting to the extended period of
limitation under the proviso to Section 73 of the
Finance Act, 1994, for raising the demand by the
Show Cause Notice dated 24.12.2020 in respect of the
period from October 2014 to June 2017, or not.

Page 9 of 15

Appeal No.: ST/75699/2025-DB


10.1. It is well settled that the mere existence of a
short-payment or non-payment of Service Tax, even
where subsequently discerned by the Department
upon scrutiny of the assessee’s records, does not, by
itself, furnish an adequate foundation for resorting to
the extended period of limitation. The proviso to
Section 73 of the Finance Act, 1994, contemplates
circumstances of a qualitatively different character, in
which the non-payment or short-payment is
attributable to the requisite culpable conduct on the
part of the assessee, including suppression of facts
with an intent to evade payment of tax. The existence
of such ingredients cannot be presumed merely from
the ultimate determination of tax liability, but are
required to be demonstrably established with
reference to the attendant facts and circumstances of
the case.
10.2. In the present case, it is not in dispute that the
appellant was registered with the Service Tax
Department and had been filing its statutory ST-3
returns during the material period. It is true that the
returns so filed were NIL returns and that the Revenue
has relied upon this circumstance to allege deliberate
non-disclosure of taxable receipts. However, the fact
that the appellant had filed NIL returns was itself
within the knowledge of the departmental authorities,
the returns having been furnished through the
prescribed statutory mechanism. The Department
was, therefore, not confronted with a complete
absence of returns or with a state of affairs in which
the appellant had remained wholly outside the
statutory framework. The filing of NIL returns, viewed
in isolation, cannot automatically be equated with
suppression of facts warranting invocation of the
extended period. The material question is whether the

Page 10 of 15

Appeal No.: ST/75699/2025-DB


appellant had deliberately withheld material
particulars with the requisite intent to evade payment
of tax, and not merely whether the returns, when
subsequently examined alongside other financial
records, were found by the department to disclose an
incorrect or incomplete position concerning tax
liability.
10.3. The appellant has maintained that it entertained
a bona fide belief that its activities were covered by
the applicable statutory exemptions and that,
consequently, no Service Tax was payable. According
to the appellant, the failure to indicate the exemption
in the returns was attributable to a procedural
omission, rather than any conscious design to conceal
its activities or deprive the exchequer of tax lawfully
due. The distinction between an erroneous
understanding of the applicable tax provisions, or an
omission in the manner of reporting a claim, and a
deliberate act of suppression intended to evade tax is
of material significance. It is supported, inter alia, by
the fact that the appellant was registered with the
department, had filed its statutory returns, and
subsequently furnished the relevant agreements,
returns, financial statements and other records called
for during the course of the investigation. It is evident
that the Department’s examination proceeded
materially upon such records obtained from the
appellant during the course of the enquiry. The
appellant also participated in the proceedings by
submitting its response to the Show Cause Notice and
contesting the proposed liability.
10.4. We further find that the appellant’s claim of
exemption has also been subsequently accepted by
the authorities below resulting in dropping of a

Page 11 of 15

Appeal No.: ST/75699/2025-DB


substantial portion of the demand. Consequently, the
demand originally proposed at Rs. 77,98,063/- was
substantially reduced in the course of adjudication and
appellate proceedings. Thus, in the facts and
circumstances of the case, it cannot be alleged,
without corroborative proof, that the appellant had
engaged in deliberate or wilful mis-statement of facts
so as to intent payment of appropriate Service Tax.
We also take note of the fact that, even in respect of
the demand which ultimately survived before the
Commissioner (Appeals), the appellant has
consistently maintained that it was not liable to
discharge Service Tax on the services in question. Its
position has been that the services rendered to the
relevant public bodies and educational or training
institutions were covered by the applicable exemption
provisions and that its non-payment of tax flowed
from this understanding. In determining whether the
extended period is invocable, the relevant
consideration is whether the non-payment was
attended by the requisite intent to evade, as opposed
to having arisen from a bona fide / mistaken,
understanding of the appellant’s tax obligations. On
the facts placed before us, we find no sufficient basis
to conclude thus.
10.5. The nature of the recipients of the services and
the appellant’s understanding of their status also
assume significance in this context. The appellant has
submitted that its services to Central Railway, Nagpur,
and to educational institutions were regarded by it as
falling within the ambit of the exemptions available
under Mega Exemption Notification No. 25/2012-ST
dated 20.06.2012, as amended. During the course of
hearing, the appellant has further explained that the
catering and housekeeping services rendered to the

Page 12 of 15

Appeal No.: ST/75699/2025-DB


Bihar Institute of Public Administration & Rural
Development and the Water & Land Management
Institute were understood by it to be exempt, having
regard to the fact that these were autonomous bodies
wholly owned and controlled by the State Government
and functioning as apex institutional training centres.
According to the appellant, the public character of
these bodies, their governmental control and the
educational or institutional training functions
discharged by them informed its belief that the
services rendered to them were not exigible to Service
Tax.
10.6. The above explanation, when considered
cumulatively with the filing of ST-3 returns, the
production of documentary records during the
investigation, and the substantial reduction of the
original demand by the authorities below, the material
on record does not, in our considered view, justify the
inference that the appellant had deliberately
concealed its activities with the specific intent of
evading Service Tax. The existence of a dispute as to
the availability of an exemption cannot, without
substantive evidence, be treated as synonymous with
suppression warranting the extended period.
10.7. The principle that the extended period cannot
be invoked merely on account of non-payment or an
omission, in the absence of the requisite intent to
evade, stands recognised in various decisions of the
Hon’ble Supreme Court. In Chemphar Drugs &
Liniments v. Collector of Central Excise [1989 (40)
E.L.T. 276 (S.C.)], the Hon’ble Supreme Court
emphasised the necessity of establishing something
more than mere inaction or failure, namely, a
deliberate withholding of information with the

Page 13 of 15

Appeal No.: ST/75699/2025-DB


requisite intent. Likewise, in Pushpam
Pharmaceuticals Company v. Collector of Central
Excise [1995 (78) E.L.T. 401 (S.C.)], the Hon’ble
Supreme Court explained that suppression, in the
context of an extended limitation provision, must be
understood in its proper legal setting and cannot be
equated with every omission or failure to disclose.
These judicial precedents underscore that the
invocation of an extended period is not an automatic
consequence of a demand being found payable; the
statutory ingredients which justify departure from the
ordinary period of limitation must independently be
established. Applying the aforesaid principles to the
facts before us, we find that the facts and
circumstances of the present case, taken
cumulatively, do not support the conclusion that the
appellant had deliberately withheld material facts with
the specific intent of evading payment of Service Tax.
The Revenue’s allegation, in our view, rests
substantially upon the difference between the tax
position adopted by the appellant and the position
subsequently taken by the Department, without
sufficient material establishing mala fide intent on the
part of the appellant.
10.8. Even otherwise, it has been held in a catena of
decisions that in cases where the demand is founded
upon Form 26AS, audited balance sheets and other
records produced by the assessee during
investigation, the extended period of limitation cannot
be invoked. In the case of Mohammed Fajlur Haque v.
Commissioner of C.G.S.T. and C.Ex., Malda [Final
Order No. 75412 of 2026 dated 19.03.2026 in Service
Tax Appeal No. 76356 of 2024 – CESTAT, Kolkata],
this Bench has held that: -

Page 14 of 15

Appeal No.: ST/75699/2025-DB


“10. Further, I also find force in the contentions
raised by the appellant that the demand confirmed
in the impugned order is not sustainable on the
ground of limitation. The demand in the present case
has been raised for the period 2014-15 whereas the
Show Cause Notice came to be issued on
17.10.2019, by invoking the extended period of
limitation. Admittedly, the demand has been raised
on the basis of the data received from the Income
Tax Authorities / Form 26AS, without conducting any
independent enquiry so as to ascertain the nature of
service being rendered by the appellant. It has been
held in a catena of decisions that the data available
in Income Tax Returns / Form 26AS loses its
evidentiary value in the absence of any
corroborative independent evidence. In this case, I
do not find that any evidence has been brought on
record by the Revenue to show that the appellant
has indulged in any activity amounting to
suppression or wilful mis-statement with the intent
to evade Service Tax. Therefore, the allegation of
suppression of facts and wilful mis-statement of
facts for invocation of the extended period of
limitation only on assumptions and presumptions
cannot be sustained. Accordingly, in view of the facts
and evidence available on record, I am of the view
that the demand confirmed vide the impugned
order, by invoking the extended period of limitation,
is liable to be set aside. Thus, the impugned demand
stands set aside on account of being barred by
limitation also.”

11. We accordingly hold that the essential
ingredients for invoking the extended period of
limitation under the proviso to Section 73 of the
Finance Act, 1994, have not been established in the
present case. In the absence of sufficient material
demonstrating deliberate suppression of facts with an
intent to evade payment of Service Tax, the extended
period could not lawfully have been invoked merely on
the basis of the alleged discrepancy between the
appellant’s ST-3 returns and the receipts reflected in
its financial and income-tax records.

Page 15 of 15

Appeal No.: ST/75699/2025-DB


12. In fact, insofar as the demand pertains to the
period from October 2014 to September 2015, it is
observed that the same falls beyond the maximum
period of five years preceding the issuance of the
Show Cause Notice dated 24.12.2020, reckoned with
reference to the relevant statutory date applicable to
the demand in question. Consequently, the said
portion of the demand lies beyond even the outermost
limit permissible under the proviso to Section 73 of
the Finance Act, 1994, and cannot be sustained by
resort to the extended under any circumstances.
Accordingly, the demand pertaining to the said period
stands vitiated on this ground alone.
13. In view of the foregoing discussion, we hold that
the demand raised by the Show Cause Notice dated
24.12.2020, by invocation of the extended period of
limitation, is therefore time-barred and cannot be
sustained.
14. The impugned order qua confirmation of the
impugned demand of Service Tax, together with the
interest and penalties thereon, is accordingly set
aside.
15. The appeal is accordingly allowed on the ground
of limitation, with consequential relief, if any.
(Order pronounced in the open court on 28.10.2026 )



(ASHOK JINDAL)
MEMBER (JUDICIAL)



(K. ANPAZHAKAN)
MEMBER (TECHNICAL)
Sd/-
Sd/-
Sdd