2013 (9) TMI 554 - AT - Service Tax

Technical Testing and Analysis Agency u/s 65(107) Bar of Limitation Waiver of Predeposit - Assessee was performing the services of well logging, perforation and other wireline services for M/s. ONGC, the appellant have provided services falling under category of Technical Testing and Analysis Agency defined in Section 65(107) of the Finance Act, which are liable to duty to service tax Held that - When the assessee stopped payment of service tax under information to the Revenue, the Revenue never objected the same and allowed the appellant to do so - We really fail to understand that if the appellant started paying a tax under the category of mining services w.e.f. 1.6.2007, how the said action of the assessee would reflect upon their malafide or any suppression or mis-statement of facts with an intent to evade payment of tax, during the relevant period under the category of Technical Testing and Analysis The appellant stopped paying service tax on the said services, though the value of the said services and the service tax payable on the same was being reflected by them in the returns required to be filed - all such returns were duly filed under the cover of a covering letter clarifying that they were not paying any service tax on the said services in terms of the advice obtained by M/s. ONGC and forwarded to them - the appellant also filed refund claim for the previous period when they had paid the service tax on the said services. As such, we are of the view that the appellant has a prima facie case on limitation - We accordingly dispense with the condition of pre-deposit of duty, interest and penalties and allow the stay petition unconditionally. - stay granted.

Summary

Issues:
1. Demand of service tax and penalty imposition for the period 14.5.2003 to 31.3.2008.
2. Whether the appellant provided services falling under the category of 'Technical Testing and Analysis Agency' liable to service tax.
3. Allegations of suppression or misstatement by the Revenue and invocation of extended period of limitation.
4. Analysis of the actions of the appellant regarding payment of service tax and the Revenue's response.

Issue 1:
The judgment confirms the demand of service tax amounting to Rs.70,02,83,057 against the applicant for the period from 14.5.2003 to 31.3.2008, along with the imposition of penalties under various sections of the Finance Act, 1994.

Issue 2:
The confirmation of service tax demand was based on the finding that the appellant provided services such as well logging, perforation, and wireline services to M/s. ONGC, falling under the category of 'Technical Testing and Analysis Agency' as defined in Section 65(107) of the Finance Act, thereby making them liable to pay service tax.

Issue 3:
The appellant argued that they had stopped paying service tax on the services provided to M/s. ONGC after receiving advice from a retired High Court Chief Justice that those services did not fall under the defined category. The appellant maintained that they had informed the Revenue about this decision through filed returns and refund claims, indicating no intention to suppress or misstate facts to evade tax, thus questioning the invocation of the extended period of limitation by the Revenue.

Issue 4:
The adjudicating authority held that the appellant's abrupt cessation of service tax payments without seeking clarification from the department and their subsequent actions amounted to non-declaration of facts with the intention to evade tax. However, the appellate tribunal disagreed, noting that the Revenue did not object to the cessation of payments and allowed the appellant to do so. The tribunal found no evidence of malafide intent or suppression of facts by the appellant, especially considering their subsequent payment of tax under a different category from June 2007. Consequently, the tribunal dispensed with the pre-deposit condition and allowed the stay petition unconditionally, indicating a prima facie case on the issue of limitation.

This detailed analysis of the judgment provides insights into the issues surrounding the demand for service tax, the appellant's actions, and the adjudication of the case, highlighting the arguments presented by both parties and the tribunal's decision.