2015 (4) TMI 81 - AT - Service Tax

Commercial or industrial construction services - appellant had constructed High-Tech Textile Park and one Auditorium-cum-Sports Complex - Suppression of facts - Invocation of extended period of limitation - Held that - Office of the Commissioner of Central Excise and Customs, Aurangabad did not respond to such letter nor any further correspondence was entered with the appellant on this matter. We also note from the records that the service tax returns which needs to be filed by an assessee, in this case the appellant, clearly indicates that the appellant had been keeping the Department informed about the amounts received by them which according to him would fall under the category of exempted services. These service tax returns were accepted by the Department and no question were raised nor any clarification was sought from the appellant. - there was no query from the revenue authorities on the returns which were filed by the appellant. In our considered view, if the revenue authorities were informed about the activities that the appellant is willing to undertake and seeking the clarification whether such activity would fall under the service tax liability or not, and also subsequently indicating in the service tax returns the amounts received by them towards such exempted services, the question of suppressing any material facts from the Department would not arise lead. If the revenue authorities did not raise any queries when the records were audited, then the show-cause notice issued in October 2013 invoking the extended period for demanding the service tax liability for the period April 2008 to March 2012, is in our considered view blatantly time barred, as it cannot be said that appellant had suppressed any information let alone vital information from the Department with intention to evade tax. In our view the service tax liability confirmed against the appellant is blatantly time barred and the impugned order to that extent is totally incorrect and is liable to be set aside. - Decided in favour of assessee.

Summary

Issues:
1. Jurisdiction of show cause notice
2. Cross-examination request
3. Applicability of service tax
4. Time-barred demand
5. Service tax liability on construction services
6. Exemption availability

Analysis:
1. The appeal challenged an order-in-original regarding service tax demand on construction services for a Textile Park and Sports Stadium. The appellant contested the notice on jurisdictional grounds, arguing the authority erred in not considering detailed submissions and dismissed cross-examination requests. The appellant claimed the construction projects were exempt due to government schemes and sought clarification on service tax liability in 2008, receiving no response. The appellant's service tax returns indicated exempted amounts, accepted without queries.

2. The department contended the appellant provided taxable construction services, disputing the exemption claim for the Textile Park. The director's statement indicated inclusion of service tax in awarded tenders. The appellant, aware of tax liability, allegedly failed to pay, justifying the extended period invocation. The appellant also undertook residential complex construction.

3. The Tribunal noted the construction projects were awarded through international bidding, with the appellant registered for service tax. The show cause notice invoked the extended period, but the appellant sought clarification on tax liability in 2008, receiving no response. The audit reports did not find the construction liable for service tax, indicating no suppression of facts.

4. Considering the appellant's proactive approach in seeking clarification and disclosing exempted amounts in service tax returns, the Tribunal found the demand for the period 2008-2012 time-barred. The lack of queries during audits implied no suppression of information, rendering the demand incorrect and time-barred. The impugned order was set aside based on limitation, without addressing merits.

5. The Tribunal concluded the demand for service tax liability on construction services was time-barred due to the appellant's proactive approach in seeking clarification and disclosing exempted amounts. The lack of queries during audits indicated no suppression of information, rendering the demand incorrect and time-barred. The impugned order was set aside solely based on the limitation issue.