2017 (2) TMI 20 - AT - Service Tax

Extended period of limitation - for the period 01.04.2006 to 30.06.2006, the show cause notice was issued on 13.07.2007 - Held that - In absence of availability of documents, there was no scope on the part of the authorities to know about the activities of the appellant. Since the show cause notice was issued within a period of one year from the date of acquiring the knowledge regarding the activities of the appellant, the same in our view is not barred by limitation of time - appeal dismissed - decided against assessee.

Summary

Issues:
- Limitation period for service tax demand

Analysis:
The appellant in this case did not contest the merits of the case but raised a grievance that the proceedings initiated by the Department for confirming the service tax demand were time-barred. The appellant argued that the show cause notice issued beyond one year from the relevant date was beyond the limitation period. The appellant's advocate contended that the issue of the leviability of service tax on photography services was contentious with divergent views by judicial forums until it was resolved by a Larger Bench decision. The advocate argued that due to the uncertainty, the appellant could have believed in good faith that service tax was not payable on the disputed taxable services, limiting the scope of the show cause notice to one year.

The Department's representative argued that the appellant failed to provide any documentary evidence supporting their claim that the services provided were not taxable. The Department asserted that since they were not aware of the appellant's activities and only acquired knowledge later, the show cause notice issued within one year was not time-barred. After hearing both sides and examining the records, the Tribunal noted that the appellant had not submitted any documentary evidence to demonstrate that their activities were outside the taxable service. Due to the lack of documentation, the authorities had no knowledge of the appellant's activities. As the show cause notice was issued within one year of acquiring information about the appellant's activities, the Tribunal held that the proceedings were not time-barred.

Given that the appellant did not contest the case on merits and solely challenged the limitation period, the Tribunal found no merit in the appeal. Consequently, the Tribunal dismissed the appeal on both grounds of merits and limitation. The decision was pronounced in the open court as the operative part of the order.