2012 (5) TMI 492 - AT - Service Tax

Extended Period of Limitation - Service Tax demand on the ground that the value of material used in providing photographic service was required to be added in the value of services - Held That - As the demand is admittedly beyond the normal period of limitation and the Tribunal in the case SHOBHA DIGITAL LAB. Versus COMMISSIONER OF CENTRAL EXCISE, BHOPAL 2011 (8) TMI 721 (Tri) held in favour of the applicant at similarly situation - set aside the impugned demand alongwith setting aside of penalty imposed upon the applicant - in favour of assessee.

Summary

Issues: Delay in filing appeal, Service tax confirmation, Value of material in photographic service, Limitation period for demand, Tribunal's decision

In the judgment delivered by the Appellate Tribunal CESTAT, NEW DELHI, the delay in filing the appeal was noted to be around 6 days. The Bench, led by Ms. Archana Wadhwa, decided to condone the delay due to its brevity and proceeded to address the stay application and the appeal itself. The case involved a confirmation of Service Tax amounting to Rs.26,886 against the applicant for the period from 1.4.2003 to 31.3.2005. The issue revolved around whether the value of material used in providing photographic services should be included in the service value. The appellants acknowledged that a previous decision by the Tribunal's Larger Bench in the case of Agarwal Colour Photo Industries had ruled against them on this matter.

The advocate representing the appellants contested the demand on grounds of limitation. The show cause notice was issued on 1.10.07, invoking the longer period of limitation. The advocate relied on a precedent involving Shobha Digital Lab, where the Tribunal had extended the benefit of limitation to a similarly situated appellant. It was argued that since there were conflicting views among different courts and the law was clarified subsequently, no malafide intent could be attributed to warrant the extended period. Given that the demand exceeded the normal limitation period and considering the Tribunal's favorable decisions for similar cases, the impugned demand on the limitation point was set aside, along with the penalty imposed on the applicant.

The judgment concluded by disposing of the COD application, stay petition, and appeal in the manner described. The decision highlighted the importance of considering the limitation period in tax matters, especially when there are conflicting legal interpretations that later get clarified by higher authorities. The ruling showcased the Tribunal's role in ensuring fair treatment based on legal precedents and principles.