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Issues involved: Determination of liability to pay service tax, imposition of penalty, invocation of longer period for demand, interpretation of Notification No. 13/2003-S.T.
Liability to pay service tax: The impugned order demanded service tax and Education Cess from July 2003 to March 2005 under proviso to Section 73(1) of the Finance Act 1994. The appellants contested this, stating they were engaged in providing commission agent services, not advertising services. They argued that they were exempt from service tax under Notification No. 13/2003-S.T. as commission agents. The Adjudicating authority's finding contradicted the Show Cause Notice, which indicated the appellants were providing business auxiliary services as commission agents. The Tribunal found the invocation of the longer period unjustified due to lack of evidence of suppression of facts, thus allowing the appeal solely on the basis of time bar. Imposition of penalty: The Adjudicating authority imposed penalties under Sections 76 and 78 of the Finance Act, 1994, along with interest under Section 75. The appellants strongly challenged these penalties. However, the Tribunal did not address the issue of penalties in its decision, focusing instead on the time bar aspect of the case. Invocation of longer period for demand: The Show Cause Notice was issued on 30-9-2003, covering the period from July 2003 to March 2005. The appellants argued that unless the extended period under proviso to Section 73(1) was justified, the demand would be time-barred. The Tribunal noted the extensive correspondence between the Revenue and the appellants regarding the leviability of service tax, dating back to 27-12-2001. Despite the Revenue's direction to register under advertisement services, the appellants contested this classification. The Tribunal found the invocation of the longer period unjustified, as there was no evidence of suppression of facts, ultimately allowing the appeal on the grounds of time bar. Interpretation of Notification No. 13/2003-S.T.: The appellants relied on Notification No. 13/2003-S.T. to argue for their exemption from service tax as commission agents. The Tribunal observed that the Adjudicating authority's finding contradicted the Show Cause Notice, which indicated the appellants fell under the purview of the notification. The Tribunal did not delve into the specific interpretation of the notification, as the appeal was allowed based on the time bar issue.
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