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2015 (7) TMI 676 - AT - Service TaxBusines Auxiliary Service - Invocation of extended period of limitation - Held that - On chargeability of service tax appellant is not agitating the issue on merits w.e.f. 01/5/2006. For the period before 01/5/2006 it is the case of the appellant that the word any person was mentioned in the definition of Busines Auxiliary Service under Section 65 (105) (zzb) only w.e.f. 01/5/2006. On verification of the case records we find it so and hold that individuals cannot be subjected to service tax under Business Auxiliary Services upto 01/5/2006. Demand for the period prior to 1/5/2006 is, therefore, required to be set aside There was no ambiguity or confusion with respect to interpretation of Business Auxiliary Services after 01/5/2006 and liability of the appellant to discharge service tax was expected to be known to appellant as ignorance of law is no excuse - Demand for the period from 01/5/2006 onwards is payable by the appellant, with interest, as extended period has to be held as applicable for the period 01/5/2006 onwards - Decided partly in favour of assessee.
Issues:
1. Applicability of service tax before and after 01/5/2006 2. Interpretation of Business Auxiliary Services 3. Imposition of penalties and applicability of extended period Analysis: Issue 1: Applicability of service tax before and after 01/5/2006 The appellant contended that they are not contesting the payment of service tax from 01/5/2006 onwards when Section 65 (105) (zzb) of the Finance Act, 1994 was amended. It was argued that prior to this amendment, the term "a commercial concern" was used instead of "any person" in the definition of Business Auxiliary Service. The Circular No. 62/11/2003 dated 21/8/2003 also supported the view that no service tax was to be levied on individuals. The Tribunal examined the case records and confirmed that individuals could not be subjected to service tax under Business Auxiliary Services before 01/5/2006. Therefore, the demand for the period before this date was set aside. Issue 2: Interpretation of Business Auxiliary Services The Revenue argued that there was no confusion in the taxing provisions after 01/5/2006, justifying the imposition of penalties and the application of the extended period for recovery. The Tribunal, however, found that there was clarity in the interpretation of Business Auxiliary Services post the mentioned date. It held that the appellant was expected to be aware of their liability to pay service tax from 01/5/2006 onwards, and ignorance of the law could not be an excuse. Consequently, the demand for this period was upheld, and penalties were deemed applicable. Issue 3: Imposition of penalties and applicability of extended period The Tribunal allowed the appeal for the period preceding 01/5/2006, as individuals were not liable for service tax under Business Auxiliary Services before the statutory amendment. However, for the period from 01/5/2006 onwards, the appeal was rejected based on the clear interpretation of the law post-amendment. The Tribunal held that penalties and interest were applicable for this period due to the absence of ambiguity in the payment of tax, making the extended period enforceable. In conclusion, the appeal was allowed for the period prior to 01/5/2006, while it was rejected for the period from 01/5/2006 onwards, with penalties upheld based on the interpretation of the law and the clarity regarding the liability for service tax.
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