2014 (2) TMI 860 - AT - Service Tax

Nature of activities of logistic arrangements for the yatra from Delhi through Kumaon region upto Indo China border in relation to Kailash Manasarovar Yatra - The department was of the view that the appellant are providing tour operator s service which would attract service tax under Section 65 (105) (n) readwith Section 65 (115) of the Finance Act, 1994 - extended period of limitation - Held that - the letter dated 30/5/08 of the Joint Secretary, Ministry of External Affairs to the CBEC giving details about the role of Kumaon Mandal Vikas Nigam in organizing Kailash Manasarovar Yatra and the rates being charged in respect of the same and also requesting the CBEC to exempt this activity from service tax, it is clear that the department was aware about the activity of Kumaon Mandal Vikas Nigam in respect of Kailash Manasarovar Yatra. - stay granted.

Summary

Issues:
1. Time bar on filing appeal before Commissioner (Appeals)
2. Applicability of extended limitation period for service tax demand

Analysis:
1. The appellant, a Government company, provided logistic arrangements for the Kailash Manasarovar Yatra organized by the Ministry of External Affairs. The department alleged that the appellant was providing tour operator services attracting service tax. A show cause notice was issued for service tax demand, interest, and penalties for the period from 01/4/05 to 31/3/09, invoking an extended limitation period. The Additional Commissioner confirmed a part of the demand, imposing penalties. The Commissioner (Appeals) dismissed the appeal as time-barred, leading to the current appeal and stay application.

2. The appellant argued that the demand was time-barred, citing a letter from the Ministry of External Affairs in 2008 requesting exemption from service tax for the yatra activities. They contended that the department was aware of their role, thus no suppression of facts occurred. The Tribunal noted that the department's knowledge of the yatra activities through official correspondence indicated no intent to evade tax. Being a state government undertaking, the appellant's alleged suppression was deemed incorrect. The Tribunal found a strong prima facie case on limitation, waiving the pre-deposit requirement and staying recovery until appeal disposal.

This judgment highlights the importance of factual awareness by tax authorities in determining time-barred appeals and the relevance of official communications in establishing a strong case on limitation.