2006 (9) TMI 76 - AT - Service Tax

Taxability No demand can be raised beyond the period of one year except it mention in the proviso of section 73(1) of FA,1994

Summary

Issues:
1. Confirmation of Service Tax for services rendered from 1998-99 to 2003-04.
2. Burden of proof on the appellants regarding Show Cause Notice.
3. Allegations for invoking a larger period.
4. Legal position regarding demands for a larger period.
5. Commissioner's admission of services coming under Service Tax.
6. Burden of proof on Revenue to show Service Tax applicability.
7. Conclusion drawn by Commissioner regarding evidence produced.
8. Legality of the impugned order.

Analysis:

1. The appeal dealt with the confirmation of Service Tax for services provided by the appellants from 1998-99 to 2003-04 under the provisions of Section 73(1) of the Finance Act, 1994. The Commissioner confirmed the demands based on a Show Cause Notice dated 8-7-2005, bringing the activity under the service tax net from 16-6-2005.

2. The appellants argued that the Show Cause Notice did not specify the ingredients of a larger period, and therefore, the demands beyond one year were time-barred. The appellants relied on legal precedents to support their argument, emphasizing the necessity of bringing out the proviso to a larger period, such as suppression of facts or wilful misstatement.

3. The Tribunal noted that the Show Cause Notice lacked reasons to invoke a larger period, as required by legal standards. The Revenue failed to establish grounds like suppression of facts or wilful misstatement in the notice. Consequently, the demands for a larger period could not be confirmed, in line with Supreme Court judgments cited by the appellants.

4. Despite the Commissioner's acknowledgment that the services fell under the Service Tax ambit from 16-6-2005, he upheld the demands citing the appellants' alleged failure to provide "cogent and corroborative evidence." The Tribunal criticized this approach, stating that the burden to prove Service Tax liability rested with the Revenue, not the assessee.

5. The Tribunal found it unjust for the Revenue to shift the burden of proof onto the appellants, especially when evidence had been presented. The conclusion drawn by the Commissioner regarding the lack of evidence was deemed incorrect, leading to the impugned order being set aside as not in accordance with the law.

6. In conclusion, the Tribunal allowed the appeal, providing consequential relief if necessary, and highlighted the importance of adhering to legal standards in confirming Service Tax demands and allocating the burden of proof between the Revenue and the assessee.