2011 (7) TMI 554 - AT - Service Tax

Providing blank hoardings fixed at various sites to the advertising agencies - Invoking extented period - Held that - Show cause notice issued in 2008 stands issued after a period of seven years from the starting of the covered period i.e. 01.10.2001, there is no provision under the act allowing the Revenue authorities to raise the demand after a period of seven years - Even if, the appellants failed to raise the issue of limitation before the adjudicating authorities or before Commissioner (Appeal) it was the legal duty of both the authorities to take the above point into consideration and not to confirm the demand for the period, for which the show cause notice stands issued after a period of seven years - set-aside the impugned order and remand the matter to original adjudicating authority.

Summary

Issues: Service tax liability on providing blank hoardings to advertising agencies, Limitation period for raising demand

In the judgment delivered by the Appellate Tribunal CESTAT, Ahmedabad, the issue at hand was the confirmation of service tax liability amounting to Rs. 35,423 against the appellants for providing blank hoardings to advertising agencies. The appellants argued that the activities did not fall under the category of advertising agencies as per circulars issued by the Board. However, it was noted that the demand was raised through a show cause notice issued on 08.02.2008 for the period from 01.10.2001 to 31.03.2005. The Chartered Accountant for the appellants acknowledged that the issue of limitation was not raised earlier but requested to raise it now as a mixed question of law and fact.

The Tribunal observed that the show cause notice issued in 2008 was beyond the permissible period of seven years from the starting of the covered period, i.e., 01.10.2001. It was highlighted that there is no provision under the act allowing Revenue authorities to raise a demand after such a prolonged period. The Tribunal criticized the lower authorities for not considering the issue of limitation, emphasizing that it was their legal duty to do so. The failure to address this point was deemed a serious lapse, leading to the decision to set aside the impugned order and remand the matter to the original adjudicating authority for proper consideration.

As the appellants had not raised the issue of limitation earlier, the Tribunal allowed them the opportunity to contest the case before the authorities below upon remand. The stay petition and appeal were disposed of accordingly, with the Tribunal refraining from delving into the merits of the case due to the focus on the limitation issue. The judgment was dictated and pronounced in court by the Tribunal members, Mrs. Archana Wadhwa and Dr. P. Babu.