2017 (5) TMI 819 - AT - Service Tax

Man power recruitment and supply agency services - benefit of doubt - time limitation - Held that - since the issue with regard to consideration of a person to commercial concern was not free from doubt, we are of the view that there was reasonable cause for the appellant for non-payment of tax for the said period. Thus the show cause notice issued to the appellant to deposit the tax from 01.05.2006 to 30.04.2006, in our opinion is barred by limitation of time - The appellant is not contesting the tax liability with effect from 01.05.2006. Thus the demand for the said period confirmed - For computation of service tax liability for the period from 01.05.2006 the matter is remanded to the original adjudicating authority - appeal allowed in part and part matter on remand.

Summary

Issues:
1. Liability of service tax for the period 16.06.2005 to 30.04.2006.
2. Interpretation of the term "commercial concern" in relation to service tax payment.
3. Applicability of the term "any person" for service tax liability post 01.05.2006.

Analysis:
1. The appeal challenged an order confirming a service tax demand against the appellant for the period 16.06.2005 to 30.04.2006, along with penalties. The appellant registered with the service tax department on 22.02.2006 and began filing returns from April 2006.

2. The main contention was whether the appellant, as an individual, could be held liable for service tax during the period when only "commercial concerns" were required to pay. The appellant argued that a previous order had clarified that individuals were not considered commercial concerns during that period, thus claiming the demand was time-barred.

3. The Tribunal noted that the term "commercial concern" was later replaced with "any person" from 01.05.2006 onwards. Due to ambiguity in the definition, the appellant had a reasonable cause for non-payment before the amendment. The Tribunal found the show cause notice for the period in question time-barred and set aside the duty demand for that period.

4. However, post 01.05.2006, the appellant was statutorily obligated to pay service tax as "any person." The Tribunal remanded the matter to the original adjudicating authority for determining the service tax liability from 01.05.2006, instructing a personal hearing for the appellant to explain their case, particularly regarding any cum duty benefits claimed.

5. Ultimately, the appeal was partly allowed by setting aside the duty demand for the period 16.06.2005 to 30.04.2006, with further proceedings for determining the service tax liability from 01.05.2006 onwards.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision on each point raised in the appeal.