2008 (1) TMI 272 - AT - Service Tax

Applicability of Service Tax on service of valuer of moveable and immoveable property under the category of Consulting Engineer - assessee had declared about this activity from 2000 onwards - department had called for details in 2002, which was furnished but the department kept quite and did not issue demand notice till 21.4.2005 for the period 1.10.1999 to 31.3.2003 willful suppression not proved - Commissioner (A) was justified in setting aside the demands as barred by time

Summary

Issues:
1. Whether the Commissioner's Order setting aside part demand on the ground of limitation for the period from 1.10.1999 to 31.3.2003 is justified.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore involved a Revenue appeal against the Commissioner's Order setting aside part demand due to limitation issues. The Commissioner had set aside the demand for the period from 1.10.1999 to 31.3.2003, which was demanded through a show cause notice dated 21.4.2005. The Commissioner noted that the assessee had raised the issue of the applicability of Service Tax on their services as a valuer of moveable and immoveable property under the category of Consulting Engineer in a letter dated 8.7.2000. Furthermore, the Commissioner observed that the department failed to respond to this correspondence. Subsequently, in 2001, when the assessee obtained Service Tax registration under the category of "Insurance Auxiliary Services," they disclosed that they were also providing professional services as a valuer. The Commissioner found that the assessee had voluntarily disclosed this activity from 2000 onwards. Despite the department calling for details in 2002, no action was taken until the show cause notice was issued in 2005. The Commissioner held that the grounds for invoking a larger period were not substantiated in the show cause notice, leading to the decision to set aside the part demands as barred by time.

The Tribunal considered the grounds of appeal and arguments presented by the Revenue's representative. The representative contended that there was willful suppression of facts, evasion, and fraud, justifying the invocation of a larger period. However, upon careful consideration, the Tribunal found that the assessee had indeed disclosed all relevant details about their activities since the year 2000. The Tribunal noted that the department had been provided with details in 2001 and 2002, yet failed to issue a demand notice until 2005. As the department had not substantiated the allegation of willful suppression to evade Service Tax on Consulting Engineer Services, the Commissioner's decision to set aside the demands as time-barred was deemed justified. The Tribunal emphasized that the grounds presented by the Revenue did not support the invocation of a larger period, especially considering the voluntary disclosure of details by the assessee since 2000. Consequently, the Tribunal rejected the appeal, affirming the Commissioner's Order.

In conclusion, the Tribunal upheld the Commissioner's decision to set aside part of the demand on the grounds of limitation, as the department failed to provide sufficient justification for invoking a larger period and did not substantiate allegations of willful suppression by the assessee. The Tribunal found that the assessee had consistently disclosed their activities since 2000, and therefore, the appeal was rejected.