2014 (11) TMI 789 - AT - Service Tax

Waiver of pre deposit - Survey and Map Making Service - Held that - if an assessee makes a claim that the same service and the same transaction has already suffered the tax, levy of tax for the second time on the same transaction without even verifying the correctness of the claim, in our opinion, may not be sustainable. For the normal period of limitation, in our opinion, the demand would have been definitely sustainable since for demand in the normal period, even if there is a mistake, the amount becomes payable. However in the case of extended period, there has to be suppression of fact or mis-declaration. In this case if an assessee believed in a bona fide manner that he is not liable to pay service tax and there are sufficient grounds for such plea and such plea is not a blind belief, he cannot be found fault with if the assessee considers that the tax is non-taxable. This would mean that the assessee has assessed his tax as nil . In this case since the main contractor paid the tax and show-cause notice has been issued beyond the normal period of limitation, we consider that in the absence of any evidence to show that the appellant had an intention to evade tax or suppress the facts, tax could not have been demanded again. Suppression of fact is something which is required to be declared in accordance with statute and not declared. In a self assessment regime, if an assessee correctly assessed the goods according to his own assessment and if there is a valid ground for him to take such a view, extended period may not be invokable. Under these circumstances we consider that appellant has made out a prima facie case for waiver of pre-deposit - Stay granted.

Summary

Issues: Service tax liability on 'Survey and Map Making Service'; Claim of double taxation; Procedure for tax payment; Extended period of limitation; Suppression of fact; Waiver of pre-deposit.

Service Tax Liability on 'Survey and Map Making Service': The appellant was demanded a service tax of Rs. 30,89,893 with interest for not paying service tax on the service provided. The appellant argued that the main contractor had already paid the tax for the same service, and thus, they should not be liable to pay again. The appellant highlighted that the amounts paid by the main contractor and received by the appellant may not exactly tally due to the nature of the transactions. The tribunal noted that the procedure requires the appellant to pay tax and the main contractor to take credit, emphasizing that failure to follow this procedure could lead to tax liability. However, the tribunal acknowledged that demanding tax for the second time on the same transaction without verifying the claim may not be sustainable.

Claim of Double Taxation: The tribunal considered the appellant's argument that the main contractor had paid the tax and that the demand for tax beyond the normal period of limitation should not be sustainable if there was no intention to evade tax or suppress facts. The tribunal emphasized that in a self-assessment regime, if the appellant had valid grounds to believe the tax was not payable, the extended period for tax demand may not apply. The tribunal concluded that in this case, since the main contractor had paid the tax, and there was no evidence of intention to evade tax, the tax demand on the appellant could not be justified.

Procedure for Tax Payment: The tribunal reiterated that the procedure requires the appellant to pay tax and the main contractor to take credit, emphasizing that failure to adhere to this procedure could result in tax liability. The tribunal highlighted that if an assessee believes in good faith that they are not liable to pay tax and there are valid grounds for such belief, they cannot be faulted for considering the tax as non-taxable.

Extended Period of Limitation and Suppression of Fact: The tribunal distinguished between the normal period of limitation and the extended period, noting that for the latter, there must be suppression of fact or misdeclaration. In this case, the tribunal found that since the main contractor had paid the tax and the show-cause notice was issued beyond the normal period, without evidence of intention to evade tax or suppress facts, the tax demand could not be upheld.

Waiver of Pre-deposit: Considering the appellant's arguments and the absence of evidence indicating an intention to evade tax, the tribunal granted a waiver of pre-deposit and stayed the recovery for 180 days from the date of the order.

This judgment analyzed the service tax liability, the claim of double taxation, the procedure for tax payment, the implications of the extended period of limitation, the requirement of suppression of fact, and the decision on the waiver of pre-deposit in a detailed manner, providing insights into the legal aspects and considerations involved in the case.