2007 (12) TMI 486 - AT - Service Tax

Validity of SCN - time limitation - Held that - the demand confirmed is based on the two amendments made one in 2003 and another in October 2004. In such a situation, the question of fraud, collusion cannot arise - the show-cause notice has been issued after one year from the relevant dale and therefore, the demand is time-barred - appeal dismissed - decided against Revenue.

Summary

Issues:
Recovery of Service Tax for a specific period, Retrospective amendments affecting service receivers, Time limit for issuing show-cause notice, Interpretation of relevant date for time limit calculation, Applicability of Tribunal's decision in similar cases.

Analysis:
1. Recovery of Service Tax: The case involves a dispute over the recovery of Service Tax for the period from 16-7-1997 to 15-10-1998. The respondent, initially a service receiver, was deemed a service provider due to retrospective amendments in 2000 and 2003. The respondent was required to file a return within six months from 13-11-2003 for services received earlier. Section 73, related to recovery of short-levied tax, was amended from 10-9-2004 onwards.

2. Time Limit for Show-Cause Notice: The main contention revolved around the time limit for issuing a show-cause notice for recovery of unpaid service tax. The Department argued that the notice could be issued within one year from 10-9-2004, citing provisions related to the 'relevant date' under section 73(6). The Department relied on a previous decision where it was held that notices issued within one year from the relevant date were valid.

3. Interpretation of Relevant Date: The respondent contended that the relevant date for calculating the time limit should be 14-11-2003, as per a specific case precedent. In this case, the show-cause notice was issued on 20-9-2005, well beyond the one-year limit from the date considered relevant by the respondent.

4. Tribunal's Decision: The Tribunal analyzed the amendments made in 2003 and 2004 and concluded that the demand for service tax was based on these amendments, eliminating the possibility of fraud or collusion. Referring to the precedent set by the case of Mangalam Cement Ltd., the Tribunal determined the relevant date for the time limit calculation as 14-11-2003. Since the show-cause notice was issued after one year from this date, the Tribunal deemed the demand to be time-barred.

5. Conclusion: After careful consideration, the Tribunal rejected the appeal, upholding the decision of the Commissioner (Appeals) that the demand for service tax was time-barred. The Tribunal found no valid reasons to interfere with the Commissioner's decision, emphasizing the importance of adhering to the prescribed time limits for issuing show-cause notices in such cases.