2014 (12) TMI 1092 - AT - Service Tax

Invocation of extended period of limitation - Mandap Keeper Service - Held that - No doubt, in June 2006, decision in the case of Shree Gujarati Samaj Bhavan 2006 (6) TMI 470 - CESTAT NEW DELHI was rendered and an argument can be advanced that the appellant who was monitoring the case law for entertaining bona fide belief should have taken note of this decision and started paying service tax. However, we take note of the fact that even the Govt. has chosen to amend the definition in 2007 and therefore it cannot be stated that appellant was not at all entitled to bona fide belief and extended period can be invoked. - appellant had informed the department by writing a letter giving reasons for non-payment and also taking note of the fact that appellant started paying service tax after the definition was amended, we consider that in this case extended period could not have been invoked. Accordingly, the entire demand cannot be sustained. - Decided in favour of assessee.

Summary

Issues:
Condonation of delay in filing the appeal, waiver of pre-deposit requirement, service tax demand for the period from October 2005 to March 2007, applicability of extended period for demand beyond normal limitation.

Condonation of Delay:
The appellant sought condonation of a fourteen-day delay in filing the appeal, attributing it to a delay in handing over records to the Consultant. The Tribunal found the explanation reasonable and condoned the delay.

Waiver of Pre-deposit Requirement:
Upon hearing both sides, the Tribunal determined that the issue at hand was solely related to limitation and could be conclusively decided on the same day. Consequently, the pre-deposit requirement was waived, and the appeal was taken up for final decision.

Service Tax Demand and Extended Period:
The service tax demand was confirmed for the period from October 2005 to March 2007. The appellant had a history of paying service tax but stopped after a Tribunal decision regarding the non-liability of service tax for services related to marriage functions. The appellant argued that the extended period for demand was not applicable due to a bona fide belief in non-liability, especially considering subsequent amendments to the definition of taxable services. The Department contended that the amendment was clarificatory and that marriage is a social function, justifying the invocation of the extended period.

Decision and Analysis:
The Tribunal acknowledged that the appellant should have been aware of a relevant Tribunal decision in 2006 that contradicted their belief, but noted that the government subsequently amended the definition in 2007. Considering the appellant's communication with the department, the amendment to the definition, and the subsequent resumption of service tax payments by the appellant, the Tribunal concluded that the extended period for demand could not be invoked. Therefore, the entire demand was deemed unsustainable, and the appeal was allowed with consequential relief. The Tribunal disposed of the COD application and the appeal accordingly.