2017 (4) TMI 1228 - AT - Service Tax

Maintenance and repair service - appellant did not discharge service tax liability attributable to such taxable service - time limitation - Held that - the appellant had no intention to evade the payment of service tax. Proviso to Section 73 (1) cannot be invoked in such a case. The impugned order confirms that the elements of Section 73 (1) is absent in invoking extended period. Therefore, impugned order confirming the service tax demand beyond the normal limitation period is not sustainable - demand beyond normal period set aside - appeal allowed - decided partly in favor of appellant.

Issues:
1. Confirmation of service tax demand by Additional Commissioner of Central Excise.
2. Imposition of penalties under Section 76 and 78 of the Finance Act, 1994.
3. Upholding of service tax demand by Commissioner (Appeals).
4. Setting aside of penalties under Section 76 and 78 by invoking Section 80.
5. Barred limitation period for demand from 2005-2006 to 2008-2009.
6. Submission of appellant regarding lack of intention to defraud service tax.
7. Arguments by the authorized representative for the respondent.
8. Appellant's contention for setting aside the demand based on limitation.
9. Findings of the Commissioner (Appeals) regarding intention to evade service tax.
10. Analysis of the appellant's actions in relation to service tax collection.
11. Invocation of proviso to Section 73 (1) and absence of intention to evade service tax.
12. Sustainability of the impugned order confirming service tax demand beyond the normal limitation period.

The judgment involves the confirmation of a service tax demand by the Additional Commissioner of Central Excise, who imposed penalties under Section 76 and 78 of the Finance Act, 1994. The Commissioner (Appeals) upheld the service tax demand but set aside the penalties by invoking Section 80. The appellant argued that a substantial period of the demand was time-barred, covering 2005-2006 to 2008-2009, with the show cause notice issued beyond the normal limitation period. The appellant contended that there was no intention to defraud the service tax, a fact acknowledged by the Commissioner (Appeals). The authorized representative for the respondent reiterated the findings in the impugned order.

Upon hearing both sides and examining the record, the Tribunal noted that the appellant did not contest the service tax liability on merits but sought to set aside the demand due to limitation grounds. The Commissioner (Appeals) found that the appellant had not collected any service tax from customers and did not intend to evade the tax. The Tribunal observed that the appellant's transactions were in the books of accounts without considering the service tax element, leading to the conclusion that there was no intention to evade service tax. As per the findings, the elements of Section 73 (1) were absent in invoking the extended period, rendering the impugned order confirming the service tax demand beyond the normal limitation period unsustainable.

In conclusion, the Tribunal set aside the demand confirmed beyond the normal period, disposing of the appeal accordingly. The judgment highlights the importance of intention to evade service tax in invoking the extended period under Section 73 (1) and emphasizes the necessity of considering all relevant factors in determining the sustainability of a service tax demand beyond the normal limitation period.

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