2015 (6) TMI 50 - AT - Service Tax

Tour Operator/ Rent-a-Cab Services - Bonafide beleif - Invocation of extended period of limitation - Penalty u/s 76, 77 & 78 - Held that - Revenue came to know of the services provided by the appellant only through an audit of the records of M/s. ONGC. No service tax registration was obtained by the appellant during the relevant period of demand - extended period will be applicable to the present facts and circumstances. Providers of Rent-a-Cab/ Tour Operator services providers were under the impression that services provided to M/s. ONGC are not leviable to service tax. M/s. ONGC also conveyed to Rent-a-Cab service providers that service tax is not leviable as observed by this bench while passing order No. A/12094 to 12096/2014 dated 28.11.2014. This case is, therefore, fit for extending the benefit of Section 80 of the Finance Act, 1994 even if extended period is found applicable - Decided partly in favour of assessee.

Summary

Issues Involved:
1. Payment of service tax on Tour Operator/Rent-a-Cab Services provided to M/s. ONGC.
2. Contesting the issue on time bar and penalties imposition.

Analysis:

Issue 1: Payment of service tax on Tour Operator/Rent-a-Cab Services provided to M/s. ONGC
The appeals were filed concerning the Order-in-Original passed by the Commissioner (Appeals), Surat, regarding the payment of service tax on services provided by the appellant to M/s. ONGC. Both lower authorities had ruled against the appellant. The appellant did not contest the issue on merits but focused on the time bar and the imposition of penalties. The appellant argued that there was a general belief that services provided to ONGC were not subject to service tax due to ONGC being considered a Government of India undertaking. The Revenue contended that the appellant did not have service tax registration during the relevant period and that the extended period was rightly invoked. The Tribunal agreed with the Revenue that the extended period was applicable based on the circumstances.

Issue 2: Contesting the issue on time bar and penalties imposition
The appellant argued that ONGC did not pay the service tax, relying on a previous order where penalties were not imposed on similar services provided to ONGC. The Revenue, however, highlighted that the appellant did not have service tax registration during the relevant period and that penalties were correctly imposed. The Tribunal observed that there was a misconception among service providers that services to ONGC were not subject to service tax, which was also communicated by ONGC. Considering this, the Tribunal found the case suitable for the benefit of Section 80 of the Finance Act, 1994, even if the extended period was applicable. Consequently, the appeals were allowed only concerning the non-imposition of penalties under Section 76, 77, and 78 of the Finance Act, 1994.

In conclusion, the Tribunal allowed the appeals to the extent indicated in its order, emphasizing the non-imposition of penalties under the specified sections of the Finance Act, 1994.