2010 (6) TMI 334 - AT - Service Tax

Demand of service tax demand and imposition of penalty - assessees have filed an application for raising an additional ground that there was no suppression on their part as they did not have knowledge that they were liable to pay service tax - Revenue to hold that the assessees were aware of their liability to tax is not relevant for deciding the issue for the reason that in agreement during the relevant period there is no clause relating to the liability to pay service tax and for the first time, in the agreement with BSNL for the period 2004-06, there was a clause pertaining to payment of service tax - Held that - burden of establishing that the assessees were guilty of suppression lies upon the department and the burden has not been discharged in this case - Appeal is dismissed

Summary

The appeal challenges service tax demand and penalty imposition for 2001-02 and 2002-03. Additional ground allowed stating no suppression as unaware of tax liability. Agreement with BSNL not relevant as no clause on tax liability during the period in question. Department failed to prove suppression, so demand barred by limitation. Impugned order set aside on limitation grounds.