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2020 (3) TMI 457 - CESTAT HYDERABADClassification of services - Business Support Services or not - service of providing transponders on hire basis by IGSML to UEPL - transfer of right to use even without transfer of ownership of property - suppression of facts - extended period of limitation - Revenue neutrality - Penalty - HELD THAT:- As for amendment of Article 366 of Constitution of India in the year 1983 Transfer of right to use goods has been included in the definition of sale. Thus transfer of right to use even without transfer of ownership of property is deemed as a sale. Accordingly hire/lease of goods is a deemed sale and is liable to sales tax. Thus hiring of transponder of satellite can never be a case of providing taxable service. Once the transaction is within the scope of sale and admittedly the transponder is hired by the appellant from M/s IGSML for supporting his business of broadcasting we are of the opinion that department has rightly categorised the said transaction as an activity being provided by M/s IGSML to M/s UEPL in view of supporting the business of the later classifying it as a business support service. Extended period of limitation - Penalty - HELD THAT:- The period of dispute is with effect from 2006-07 to 2009-10. The show-cause notice was received by the appellant only on 7th of April 2011 though it appears to have been issued on 24.03.2010 but we observe that department could not have produced any document of it to have been dispatched within the reasonable time or about the service thereof on the date other than as mentioned by the appellant. From the letter given by the appellant to the department in April 2011 itself which has duly been acknowledged by the department without objecting the date of receipt as mentioned therein, there are no reason to hold that the show-cause is beyond the prescribed period of limitation - The subsequent show-cause notice cannot propose the demand for a period beyond one year of the period in dispute nor can raise the allegation as that of suppression of facts or misstatement on the part of appellant that too with an intention to evade the tax. In these circumstances, the Proviso to Section 73 of the Finance Act extending the said period of limitation from one year to five years could not have been invoked by the department. In view of these findings, the impugned show cause notice is barred by limitation. Revenue Neutrality - Penalty - HELD THAT:- Once the value of hire charges paid by the appellant to the service provider is available to the credit thereof in case such a value is categorised as service tax, there remains no question of any loss to the exchequer and the situation can very well be categorized as revenue neutral situation. As the facts are indicating absence of intention to evade tax in the circumstances, question of imposition of penalty does not at all. It is not convincing that the argument of the appellant that the impugned transaction is the transaction as that of deemed sale, rather we are confirming the observation of the department for it to amount an activity as that of business support services being received by the appellant but would have been liable to discharge the liability of service tax under reverse charge mechanism but for the show-cause notice being barred by time, we are of the opinion that the demand has still been confirmed. Appeal allowed - decided in favor of appellant.
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