2012 (6) TMI 488 - AT - Service Tax

Waiver of pre-deposit - demand of service tax is for the period from 10.9.2004 to 31.3.2006 and the same was confirmed against the appellant by the original authority in adjudication of a show-cause notice which was issued on 26.11.2008 invoking the extended period of limitation SCN merely mentions non-declaration of P & T charges collected from customers for providing Banking and Other Financial Services in ST-3 returns Held that - show-cause notice which was issued in November 2008 did not specifically allege any suppression of such fact with intent to evade payment of service tax. Hence there will be waiver of pre-deposit.

Summary

Issues:
- Waiver of pre-deposit and stay of recovery in a service tax case
- Allegation of suppression with intent to evade payment of service tax
- Invocation of extended period of limitation based on non-declaration of facts
- Prima facie case for the appellant on the ground of time-bar

Waiver of Pre-deposit and Stay of Recovery:
The appellant sought waiver of pre-deposit and stay of recovery in a service tax case amounting to Rs.38,15,577/- along with an equal penalty. The impugned demand was confirmed against the appellant for the period from 10.9.2004 to 31.3.2006. The appellant's consultant argued on merits and limitation, emphasizing the latter. It was contended that the show-cause notice did not allege suppression with intent to evade payment of service tax but only non-declaration of P&T charges collected from customers. The department issued the notice in November 2008 despite gathering relevant facts in September 2006 and subsequent clarifications. The appellant relied on a recent Supreme Court judgment and other decisions to support their position. The JCDR opposed the plea, citing findings of the original authority.

Allegation of Suppression with Intent to Evade Payment:
The appellant's argument centered on the absence of an allegation of suppression with intent to evade payment of service tax in the show-cause notice. They contended that mere non-declaration of facts, specifically P&T charges, was insufficient to invoke the extended period of limitation. The appellant highlighted that the department had knowledge of the relevant facts as early as September 2006, and the delayed issuance of the notice in November 2008 lacked specificity regarding any suppression. This lack of specific allegation formed the basis for the appellant's plea for waiver of pre-deposit and stay of recovery.

Invocation of Extended Period of Limitation:
The appellant's case hinged on the invocation of the extended period of limitation based on the department's claim of non-declaration of P&T charges in the relevant ST-3 returns. The appellant argued that the mere non-declaration of these charges was not sufficient to warrant the extended period of limitation. They pointed out that the department had gathered relevant facts in September 2006 and subsequent clarifications but chose to issue the show-cause notice in November 2008. The appellant cited a recent Supreme Court judgment and other decisions to support their contention that the notice was time-barred due to the delay in issuance.

Prima Facie Case for Appellant on Time-Bar Ground:
After considering the submissions from both sides, the Tribunal found a prima facie case for the appellant on the ground of time-bar. The department had knowledge of the relevant facts as early as September 2006, and the show-cause notice issued in November 2008 lacked specific allegations of suppression with intent to evade payment of service tax. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery regarding the amounts adjudged against the appellant, highlighting the lack of timely and specific allegations in the notice.