2010 (11) TMI 324 - HC - Service Tax

Demand - Evasion of duty - Scientific & Technical Consultancy Services or management consultancy services - assessee was entertaining a bona fide view that the services rendered by it did not fall within the ambit of management consultancy services and that at the relevant time a lot of confusion was prevailing in respect thereto - there was confusion prevailing in respect of the controversy in issue at the relevant time, the assessee was entitled to entertain a view that the services rendered by it did not fall within the ambit of management consultancy services - Decided in the favour of the assessee

Summary

Issues:
1. Whether the Tribunal was right in dropping the demand and remanding the matter based on limitation in a case involving Management Consultant Services?
2. Whether the Tribunal correctly assessed the intention of the respondent in not paying duty and evading payment of duty?

Analysis:
1. The appellant, a Central Excise Commissioner, challenged a Tribunal order regarding a show cause notice issued to an assessee for providing Management Consultancy Services. The issue revolved around the invocation of the extended period of limitation. The adjudicating authority confirmed duty demand, penalties, and registration under Management Consultancy Services. The Commissioner (Appeals) upheld this decision. The Tribunal held in favor of the assessee on the limitation issue, leading to the appeal. The appellant contended suppression by the assessee, justifying the extended limitation period. However, the Tribunal found no suppression, considering the confusion prevailing at the time. The Tribunal remanded the matter for quantification, ruling in favor of the assessee. The High Court dismissed the appeal, upholding the Tribunal's decision.

2. The Tribunal's findings indicated that the assessee did not suppress facts or evade duty intentionally. The Tribunal noted the bona fide belief of the assessee regarding the nature of services rendered, supported by the balance sheet entries. The Tribunal concluded that the confusion prevailing at the time justified the assessee's interpretation, and there was no intent to evade duty. The High Court concurred with the Tribunal's factual findings, emphasizing that no legal error was committed. The Court dismissed the appeal, stating that no substantial question of law arose from the Tribunal's order.