CPS Security Private Limited vs NOIDA- Appeal
- Court
- Customs, Excise and Service Tax Appellate Tribunal
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70331 of 2026
(Arising out of Order-In-Appeal No. NOI-EXCUSE-001-APP-246-25-26, dated -
30.01.2026 passed by Commissioner (Appeals) CGST, Noida)
M/s CPS Security Private Limited …..Appellant
(1006 B Tower A-I Corporate Park
Plot No.-7A/1, Sector 142, Behind Advant Navis Business Park,
Noida, Uttar Pradesh-201305)
VERSUS
Commissioner, Central Goods & Service Tax, Noida
….Respondent
(GST Bhawan, IRCON Building,
Plot No.-C-232,A/2-A/3, Sector-48,
Gautam Budh Nagar, Uttar Pradesh 201307)
A PPEARANCE :
Shri Amit Tiwari, Chartered Accountant for the Appellant
Ms. Chitra Srivastava, Authorized Representative for the Respondent
CORAM:
HON’BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)
FINAL ORDER NO.-70325/2026
DATE OF HEARING : 27.08.2026
DATE OF DECISION : 02.09.2026
P. K. CHOUDHARY:
The present appeal has been filed by the Appellant assailing
the Order-In-Appeal No. NOI-EXCUSE-001-APP-246-25-26, dated
-30.01.2026 passed by Commissioner (Appeals) CGST, Noida.
2. Briefly stated, the facts of the case are that the Appellant
M/s CPS Security Private Limited, is engaged in the business of
providing ‘Security Agency Service/Manpower Supply Service’ to
various clients.
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3. The Appellant was registered with the Service Tax
Department and has been maintaining regular books of accounts
in the ordinary course of business and have been filing statutory
records under the Income Tax Act, 1961 and financial statements
under the Companies Act, 2013.
4. On the basis of third party data exchange mechanism, the
present proceedings were initiated on receiving From 26AS from
the Income Tax Department. On the basis of which the Service
Tax Department entertained a view that during the period from
October 2014 to June 2017, the Appellant-Assessee had allegedly
not deposited the Service Tax liability on the entire amount
received during that period.
1
5. Based on the above allegation, a Show Cause Notice dated
29.09.2020 was issued. Vide the Order-In-Original dated
19.09.2023 the following order was passed:-
ORDER
20. In view of the findings as discussed herein above, I pass
the following order:
(i) I confirm that an amount (Gross) of Rs. 3,25,92,597/-
received by the party from their client for the pe 2014-15
(Oct 14 to March'15), 2015-16, 2016-17 & 2017-18 (upto
June'17) in lieu providing the services of "Security Agency
Services/ Man Power supply Services" is to be treated as the
total value of taxable services.
(ii) I confirm the demand of unpaid Service Tax totaling Rs.
49,38,552/-(inclusive all cess) for the period 2014- (Oct 14
to March'15), 2015-16, 2016-17 & 2017-18 (upto June' 17)
and order to recover the same from them under the proviso
to Section 73 (1) of the Finance Act, 1994 read with Section
174 of the CGST Act, 2017.
1
SCN
Service Tax Appeal No.70331 of 2026
3
(iii) I also order to recover interest on the amount as
mentioned at (ii) above from them under Section 75 of the
Finance Act, 1994, read with Section 174 of the CGST Act,
2017.
(iv) I impose a penalty of an amount Rs. 49,38,552/- under
Section 78 of the Finance Act, 1994 read with Section 174 of
the CGST Act, 2017 for failure to pay Service Tax during the
relevant period suppressing the facts from the department.
(v) I impose a penalty of an amount Rs. 10,000/- on the party
under Section 77 (1) (c) (ii) of the Finance Act, 1994 read
with Section 174 of the CGST Act, 2017 as the party has failed
to provide the documents as called for.
(vi) I impose a penalty of an amount Rs. 10,000/- on the
party under Section 77(1) (b) of the Finance Ac 1994 read
with Section 174 of the CGST Act, 2017 for contravention of
Rule 5 of the Service Tax Rules, 1994 in as much as the party
has failed to maintain the prescribed records.
(vii) I also confirm the demand of late fee of Rs. 1,20,000/-
order the same to be recovered from them as per provisions
of Rule 7C of the Service Tax Rules read with Section 70 of
the Act ibid under Section 77(2) of the Act ibid read with
Section 174 of the CGST Act, 2017
6. Being aggrieved, the Appellant-Assessee was in appeal
before the First Appellate Authority and the learned Commissioner
(Appeals) vide the Order-In-Appeal dated 20.06.2025, dismissed
the appeal before her on the ground of limitation.
7. On appeal before the Tribunal, the Tribunal vide the Final
Order No.70012 of 2026 dated 05.01.2026, allowed the appeal by
way of remand to the learned Commissioner (Appeals). Vide the
impugned Order-In-Appeal dated 30.01.2026, the learned
Commissioner (Appeals) rejected the appeal filed by the Appellant
Service Tax Appeal No.70331 of 2026
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and upheld the Order-In-Original. Hence, the present appeal
before the Tribunal.
8. The learned Counsel appearing on behalf of the Appellant
submits that the monthly remuneration paid to the director is
nothing but salary for performing his/her job as a Director in the
day to day affairs of the company. The remuneration paid to the
Director is accounted for as ‘Salary’ and the TDS under the Income
Tax Act, is also deducted under the head ‘Salary’ in Form-16.
Therefore, the remuneration paid to the Director being a salary is
not liable for Service Tax as per negative list under Section 65 B
(44) (b) of the Finance Act, 1994.
9. I further find that this amount has been shown by the
Directors in their individual returns under the head salary and
copies of their computation of income, Acknowledgement of
Income Tax Return filed by both the directors for the Financial
years 2014-15 to 2017-18 have been produced. It is also the case
of the Appellant that the entire proceedings is barred by limitation
since the period covered in the SCN is from October 2014 to June
2017 and the SCN was issued only on 29.09.2020. A table has
been submitted which is reproduced as under:-
SI.
No.
Period
Involved
ST-3 Return
Due Date
(Relevant
Date)
Applicable
Normal
Limitation*
Last Date for
Issuance of
SCN under
Normal
Limitation
Date of
SCN
1 Oct 2014 - Mar
2015
25 .04.2015 18 Months 24.10.2016 29.09.2020
2 Apr 2015 - Sep
2015
25 10.2015 18 Months 24.04.2017 29.09.2020
3 Oct 2015 - Mar
2016
25 04.2016 18 Months 24.10.2017 29.09.2020
4 Apr 2016 - Sep
2016
25. 10.2016 30 Months 24.04.2019 29.09.2020
5 Oct 2016 - Mar
2017
30.04.2017 30 Months 29.10.2019 29.09.2020
6 Apr 2017 - Jun
2017
15.08.2017 30 Months 14.02.2020 29.09.2020
10. Learned Departmental Representative pointed out that the
Appellant had not filed the ST-3 Returns hence the extended
Service Tax Appeal No.70331 of 2026
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period of limitation has been rightly invoked. Accordingly, she
justified the impugned order and prayed that the appeal filed by
the Appellant, being devoid of any merits, may be dismissed.
11. Heard both the sides and perused the appeal records.
12. I find that in this case the Appellant have contested the
demand on the ground of limitation. It is observed that the
demand raised in the SCN dated 29.09.2020 is by invoking the
extended period of imitation on the basis of difference observed
in the figures in balance sheet, profit and loss account, 26AS
statement which is legally not sustainable. I observe that the data
available in the statutory records of the Appellants were always
open to the Department for scrutiny.
13. Further, the Department has failed to bring any
corroborative evidence on record to establish suppression of facts
with an intent to evade payment of Service Tax on the part of the
Appellant herein. On facts as stated above and under the
circumstances of the case, it is my considered view that the
extended period of limitation cannot be invoked for confirming the
demand of Service Tax against them.
14. I find that on similar facts, the Tribunal in the case of M/s
International Air Charter V/s Commissioner of Central Tax
(Appeals-II), Delhi in Service Tax Appeal No.52064 of 2018 being
Final Order No.51662 of 2023 dated 13.12.2023 has observed as
under:-
“7. The sole contention that has been advanced by the
learned consultant for the appellant is that the extended
period of limitation could not have been invoked. The show
cause notice alleges that as the appellant had intentionally
and willfully suppressed facts regarding providing taxable
services and did not file the ST-3 returns, it appeared that
the appellant had intentionally evaded payment of service tax
and the facts would not have come to the notice of the
department if the investigation not been conducted.
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8. The appellant filed a detailed reply to the show cause
notice and submitted that the appellant was under a bonafide
belief that it was not liable to pay service tax since the
services provided by the appellant were “air transport of
passenger service”. The appellant also contended that mere
suppression of facts is not enough for invocation of the
extended period as suppression has to be willful with an
intent to evade payment of service tax.
9. This submission of the appellant did not find favour of the
Additional Commissioner. The Additional Commissioner held
that there is no requirement in law that suppression has to
with intention to evade payment of service tax and mere
suppression is enough for invoking the extended period of
limitation.
10. The Commissioner (Appeals) has merely confirmed the
order passed by the Additional Commissioner without even
examining the contention advanced by the appellant that the
extended period of limitation could have been invoked only if
there was suppression of facts with intent to evade payment
of service tax.
11. The finding recorded that suppression of facts is enough
to invoke the extended period of limitation under the proviso
to section 73 (1) of the Finance Act and there is no necessity
of any intent to evade payment of service tax, is against the
well settled principles.
12. Even assuming that there was suppression, it has to be
examined whether suppression was willful and with an intent
to evade payment of service tax. The Supreme Court and the
Delhi High Court have held that suppression of facts has to
be “willful‟ and there should also be an intent to evade
payment of service tax.
13. Before adverting to the decisions of the Supreme Court
and the Delhi High Court, it would be useful to reproduce the
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proviso to section 11A of Central Excise Act, 1944, as it stood
when the Supreme Court explained “suppression of facts” in
Pushpam Pharmaceutical Co. vs. Commissioner of
Central Excise, Bombay [1995 (78) E.L.T. 401 (SC)] . It
is as follows:
“11A: Where any duty of excise has not been levied or
paid or has been short-levied or shortpain or erroneously
refunded, by the reason ofa. fraud; or b. collusion; or c.
any wilful misstatement; or d. suppression of facts; or e.
contravention of any of the provisions of this Act of the
rules made thereunder with intent to evade payment of
duty by any person chargeable with the duty, the Central
Excise Officer shall, within five years from the relevant
dated, serve notice on such person requiring him to show
cause why he should not pay the amount specified in the
notice along with interest payable thereon under Section
11AA and a penalty equivalent to the duty specified in
the notice.”
14. In Pushpam Pharmaceuticals Company , the Supreme
Court examined whether the Department was justified in
initiating proceedings for short levy after the expiry of the
normal period of six months by invoking the proviso to
section 11A of the Excise Act. The proviso to section 11A of
the Excise Act carved out an exception to the provisions that
permitted the Department to reopen proceedingsif the levy
was short within six months of the relevant date and
permitted the Authority to exercise this power within five
years from the relevant date under the circumstances
mentioned in the proviso, one of which was suppression of
facts. It is in this context that the Supreme Court observed
that since “suppression of facts‟ has been used in the
company of strong words such as fraud, collusion, orwilful
default, suppression of facts must be deliberate and with an
intent to escape payment of duty. The observations are as
follows:
Service Tax Appeal No.70331 of 2026
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“4. Section 11A empowers the Department to re- open
proceedings if the levy has been short levied or not
levied within six months from the relevant date. But the
proviso carves out an exception and permits the
authority to exercise this power within five years
from the relevant date in the circumstances
mentioned in the proviso, one of it being
suppression of facts. The meaning of the word 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 court 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.”
(emphasis supplied)
15. This decision was referred to by the Supreme Court in
Anand Nishikawa Company Ltd. vs. Commissioner of
Central Excise [2005 (188) E.L.T. 149 (SC)] and the
observations are as follows:
“26……….. This Court in the case of Pushpam
Pharmaceutical Company v. Collector of Central Excise,
Bombay, while dealing with the meaning of the
expression “suppression of facts” in proviso to Section
11A of the Act held that the term must be construed
Service Tax Appeal No.70331 of 2026
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strictly. It does not mean any omission and the act
must be deliberate and willful to evade payment of
duty . The Court, further, held :-
“In taxation, it (“suppression of facts”) can have only
one meaning that the correct information was not
disclosed deliberately to escape 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.”
27. Relying on the aforesaid observations of this Court
in the case of Pushpam Pharmaceutical Co. v. Collector
of Central Excise, Bombay [1995 Suppl. (3) SCC 462],
we find that “suppression of facts” can have only
one meaning that the correct information was not
disclosed deliberately to evade payment of duty.
When facts were known to both the parties, the omission
by one to do what he might have done not that he must
have done would not render it suppression. It is settled
law that mere failure to declare does not amount to
willful suppression. There must be some positive act
from the side of the assessee to find willful suppression.
Therefore, in view of our findings made herein above
that there was no deliberate intention on the part of the
appellant not to disclose the correct information or to
evade payment of duty, it was not open to the Central
Excise Officer to proceed to recover duties in the manner
indicated in proviso to Section 11A of the Act.”
(emphasis supplied)
16. These two decisions in Pushpam Pharmaceuticals and
Anand Nishikawa Company Ltd . were followed by the
Supreme Court in the subsequent decision in Uniworth
Textile Limited vs. Commissioner of Central Excise,
Raipur [2013 (288) E.L.T. 161 (SC)] and the observation
are:
Service Tax Appeal No.70331 of 2026
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“18. We are in complete agreement with the principal
enunciated in the above decisions, in light of the proviso
to section 11A of the Central Excise Act, 1944.”
17. ……………………………
18. ……………………………
19. ………………………………
20. It would transpire from the aforesaid decisions that
mere suppression of facts is not enough and there must be a
deliberate and willful attempt on the part of the assessee to
evade payment of duty. In the absence of any intention to
evade payment of service tax, which intention should be
evident from the materials on record or from the conduct of
the assessee, the extended period of limitation cannot be
invoked. Thus, mere non disclosure of the receipts in the
service tax return would not mean that there was an intent
to evade payment of service tax.”
15. I find that the taxable value considered for computing the
Service Tax liability should be taken from the same source for the
entire period under consideration. The Adjudicating Authority has
considered the turnover as reported in the Balance Sheet for the
Financial Year 2016-17 whereas for the period from October 2014
to March 2015, Financial Year 2015-16 and for Financial Year
2017-18, the turnover reported as per Form 26AS statement has
been considered for the purpose of computing the demand of
Service Tax. Since no reconciliation has been provided between
the turnover as per the balance sheet and From 26AS Statement,
the demand so raised is bad in law and cannot be sustained.
16. Further, the remuneration (Salary) paid to the Director
cannot be treated as taxable service. The remuneration so paid by
the company to the Director has been paid in the form of salary
and the director in their individual returns have shown the amount
under the head ‘Salary’ and paid the appropriate tax if not covered
Service Tax Appeal No.70331 of 2026
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by TDS under Self-Assessment before filing their Income Tax
Return.
17. I find that the demand raised by invoking the longer period
of limitation is solely based upon the Profit and Loss account and
26AS form submitted with the Income Tax Authorities which has
been held to be as not proper by the Tribunal in various decisions.
Reference stands made to the decision of Hon’ble High Court in
the case of M/s Firm Foundation and Housing Pvt. Ltd. Vs Principal
Commissioner of Service Tax, Chennai (Madras) pronounced on
06.04.2018 in Writ Petition No.21799 of 2017, as also to the
Tribunal’s decision in the case of M/s Sigma Trade Wings Vs
Commissioner of Central Excise, Lucknow Final Order No.70049 of
2019 dated 07.01.2019. It stands held in both the above decisions
that the revenue’s reliance upon the Profit and Loss account are
irrelevant for the purpose of confirmation of tax.
18. Inasmuch as, the Revenue’s entire case is based upon the
profit and loss accounts read with the 26AS Form and the service
tax stands confirmed by invoking the longer period of limitation, I
am of the view that the impugned order of Commissioner
(Appeals) is not sustainable on limitation itself. Accordingly, I set
aside the same and allow the appeal with consequential relief to
the Appellant.
(Pronounced in open court on 02.09.2026)
Sd/-
(P. K. CHOUDHARY)
MEMBER (JUDICIAL)
Nihal