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Issues: Determination of service tax liability on grants received for implementing government programs under the category of "Scientific or Technical Consultancy" and the applicability of time limitation for the demand raised by the revenue department.
Analysis: 1. Service Tax Liability on Grants Received: The appellant, engaged in Engineering Consultancy and implementing government programs, received grants and reimbursements for expenses incurred. The revenue department contended that these grants are subject to service tax under "Scientific or Technical Consultancy." The appellant argued that their activities do not fall under this category and highlighted their registration and payment of service tax for engineering consultancy services. The appellant also pointed out that the department was aware of their activities since 2004, indicating no intention to evade tax. The Tribunal noted the need to examine each activity and corresponding receipts to determine the service tax liability accurately. Considering the lack of details, the Tribunal found in favor of the appellant, granting a complete waiver of the demanded service tax, penalties, and interest until the appeal's disposal. 2. Time Limitation and Suppression of Facts: The appellant claimed a strong case on the limitation period, asserting that there was no suppression of facts to evade service tax. The revenue department argued that the appellant did not disclose their other activities while paying service tax for engineering consultancy services. The Tribunal observed that without detailed information on each activity, it was challenging to conclude that the services fell under "Scientific or Technical Consultancy." Acknowledging the potential time bar issue, the Tribunal ordered a waiver of the demanded amounts until the appeal's resolution, listing the matter for further hearing to address the significant amount involved and provide a fair opportunity for both parties to present their case thoroughly.
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