2013 (12) TMI 562 - 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 - Following decision of M/s. Schlumberger Asia Services Ltd. Versus CST, Delhi 2013 (9) TMI 554 - CESTAT NEW DELHI - stay granted.

Summary

Issues:
1. Confirmation of demand of service tax and imposition of penalties under various Sections of the Finance Act, 1994.
2. Barred by limitation due to services provided until 31st May, 2007.
3. Change in payment of service tax category from technical testing and analysis service to mining services.
4. Comparison with a similar stay order granted in another case.

Analysis:

1. The judgment confirms the demand of service tax amounting to Rs. 10,89,40,842 against the applicant for providing wireline logging services, categorized under technical testing and analysis service. Penalties under various Sections of the Finance Act, 1994 were also imposed. The demand was confirmed for the period September 2004 to March 2008 through a show cause notice issued on 23rd October 2008.

2. The appellant argued that the entire demand was time-barred as the services were provided only until 31st May 2007. They mentioned that they had previously paid service tax on the activity but stopped based on an opinion from a retired Chief Justice of the High Court. Despite not paying the tax, they included the value of services in their quarterly returns and filed a claim for a refund of the tax paid earlier. However, they resumed paying service tax from 1st June 2007 under the category of mining services without any objection from the Revenue.

3. The appellant's case was supported by a similar situation in another stay petition by M/s Schlumberger Asia Services Ltd., where unconditional stay was granted on 5th March 2013. The tribunal found the facts in both cases to be identical and decided to allow the stay petition in the present appeal as well, following the precedent set by the previous stay order.

4. The judgment concludes by stating that the decision was dictated and pronounced in open court, indicating the formal closure of the proceedings regarding the confirmation of the demand of service tax and the imposition of penalties, as well as the acceptance of the stay petition based on the comparison with the previous case.