2015 (9) TMI 1386 - AT - Service Tax

Commercial Training or Coaching Services - bonafide belief - extended period of limitation - Imposition of penalty and interest - Held that - Something positive other than mere inaction or failure on the assessee s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period. Although there was delay on the part of the appellant in providing information which may have led to delay in issuance of Show Cause Notice, the appellant has claimed the delay was caused as data from large number of centres had to be complied. There is nothing to even suggest that the appellant was deliberately causing delay to take advantage of time-bar. The fact that Delhi data was supplied without delay further supports the view that delay in providing information about outside-Delhi centres was not intentional to evade service tax. However, for invoking the extended period what is required to be established is that there was wilful mis-statement/suppression of facts. - allegation of wilful suppression of facts is not sustainable. Similar view was also been held by CESTAT in the case of Gargi Consultants Pvt. Ltd. Vs. Commissioner 2013 (5) TMI 695 - CESTAT NEW DELHI . As a consequence, the demand of ₹ 71,50,372/- is hit by time bar and hence the same is not sustainable Regarding demand for normal period - Held that - Even after the demand was confirmed and the issue no longer remained res integra, the appellant did not remit the said demand. It clearly shows that failure to remit of service tax was not because of any reasonable cause because had it been so, the appellant would have remitted the service tax after the issue was settled in favour of Revenue by Supreme Court. Therefore, the appellant is not eligible or qualified for the benefit of Section 80 ibid. - Decided partly in favour of assessee.

Summary

Issues:
1. Liability to service tax under "Commercial Training or Coaching Services."
2. Applicability of Notification No.24/2004-ST.
3. Allegations of suppression of facts and delayed information submission.
4. Eligibility for Section 80 benefit.
5. Sustainability of demands and penalties.

Issue 1: Liability to service tax under "Commercial Training or Coaching Services."
The appellant contested the service demand based on the ground of denial of exemption under Notification No.24/2004-ST. The advocate argued that prior to the amendment in the notification, the appellant believed the services provided fell under vocational training and hence were exempt. This belief was supported by a judgment of the Uttarakhand High Court. The Tribunal acknowledged the appellant's genuine confusion and held that the demand for a specific period was time-barred due to the ambiguity in the law.

Issue 2: Applicability of Notification No.24/2004-ST.
The Tribunal considered the timeline of amendments to the notification and the appellant's compliance with the law post-amendment. It noted that the appellant's belief in the exemption prior to the amendment was reasonable, supported by judicial precedents. The Tribunal found the appellant's contention valid and ruled in favor of the appellant for the demand related to the period before the notification amendment.

Issue 3: Allegations of suppression of facts and delayed information submission.
The Departmental Representative argued suppression of facts due to delayed information submission. The appellant clarified that during the relevant period, there was no provision to mention exempted services in returns. The Tribunal distinguished between deliberate suppression and delayed furnishing of information, concluding that the delay was not intentional to evade tax. Citing judicial precedents, the Tribunal held that the allegation of wilful suppression was not sustainable, leading to the dismissal of the demand and penalties related to the delayed information.

Issue 4: Eligibility for Section 80 benefit.
The Tribunal analyzed the appellant's failure to remit service tax even after the demand was confirmed and settled by the Supreme Court. It concluded that the failure to remit tax was not due to any reasonable cause, making the appellant ineligible for the benefit of Section 80.

Issue 5: Sustainability of demands and penalties.
The Tribunal set aside the demand, interest, and penalties related to one Show Cause Notice, citing time-bar limitations. For the other Show Cause Notice, the demand, interest, and penalties (except penalty under Section 78) were upheld. The appellant's appeal was disposed of based on the above determinations.

This detailed analysis of the judgment highlights the legal arguments, interpretations of statutes, and the Tribunal's findings on each issue raised in the case.