2011 (2) TMI 632 - AT - Service Tax

Waiver of pre-deposit - Penalties - Business Auxiliary Services - find that as observed in the Board circular No. 87/05/2006-ST dated 06.11.2006 there were doubts in the field as regards such activities being chargeable to service tax - If that be so no malafide can be attributed to the appellants with intent to evade payment of duty - Mere non-approaching the department or non seeking of clarification by itself cannot be made a ground for invocation of longer period of limitation unless the same is associated with a willful intent to evade payment of duty - find that the demand raised beyond the normal period of limitation against the appellant is clearly barred by limitation - We accordingly set-aside the impugned order on the said ground and allow the appeal with consequential relief to the appellants - Stay petition as also appeal get disposed off in above terms.

Summary

Issues:
1. Whether the demand raised and confirmed against the appellants for providing space to financial institutions at their service station is justified.
2. Whether the demand is barred by limitation.
3. Whether the appellant's failure to approach the Revenue for clarification can be a ground for invoking a longer period of limitation.

Analysis:
1. The demand was raised against the appellants for providing space at their authorized service station to financial institutions, considered as providing Business Auxiliary Services chargeable to service tax. The appellants argued that the show cause notice issued was time-barred, citing a Board Circular and a Tribunal decision. The Tribunal held that due to doubts in the field regarding the taxability of such activities, the demand was indeed barred by limitation. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.

2. The Revenue contended that the appellant's failure to seek clarification from the Revenue should not preclude the invocation of a longer period of limitation. However, the Tribunal noted that the doubts in the field, as acknowledged in the Board circular, justified the appellant's position. Mere non-approaching the department or seeking clarification could not be a ground for invoking a longer period of limitation unless there was a willful intent to evade payment of duty. The Tribunal found that the demand raised beyond the normal limitation period was clearly barred by limitation. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellants. The stay petition and appeal were disposed of accordingly.