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Issues involved: Challenge to service tax demand, liability for service tax on services received abroad, applicability of extended period of limitation.
Service Tax Demand: The applicant challenged the order confirming a service tax demand of Rs. 3,07,129, out of which Rs. 43,953 was already paid. The argument was made that for an invoice dated April 2, 2002, the applicant was not liable to pay service tax due to non-retrospective nature of an amendment. Additionally, services received abroad under invoices dated December 18, 2002 and June 9, 2003 were also contested as not liable for service tax. Liability for Service Tax on Services Received Abroad: The applicant contended that services received abroad were not subject to service tax. However, the department argued that as per the agreement, the applicant was liable for service tax even for services received prior to a certain date, and for services rendered in India as per the agreement stipulation. Applicability of Extended Period of Limitation: The applicant argued against the invocation of an extended period of limitation, stating that there was no suppression on their part. The department justified the extended period based on non-disclosure of details regarding taxable services until demanded for compliance. The Tribunal found that the liability to pay service tax for services received prior to August 16, 2002, was on the applicant as per the agreement terms. The responsibility of paying service tax was placed on the service receiver as per the agreement, similar to a precedent cited from the Kerala High Court. Regarding services allegedly rendered abroad, it was determined that the services were required to be rendered in India based on the agreement clauses. On the issue of the extended period of limitation, it was clarified that the absence of a penalty did not negate the existence of suppression. The applicant's provision of details only upon demand from the department did not absolve them from the extended period invocation. The Tribunal directed an interim stay of the impugned order subject to the applicant depositing 50% of the remaining service tax amount within a specified timeframe, failing which the appeal would be dismissed.
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