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2018 (1) TMI 1132 - AT - Service TaxBusiness Auxiliary Service - Multi-level Marketing services for the consumer goods belonging to M/s. Fashion Suitings Ltd. - extended period of limitation - penalty - Held that - Since the issue was resolved by the Tribunal in 2015, it cannot be said that non-payment of tax by the appellant is attributable to fraud, suppression of facts etc. with intend to defraud the Government revenue. Thus, the show cause notice issued on 21.08.2008 for the period from 19.09.2004 to 10.08.2008 is partly barred by limitation of time. Penalty - Held that - there were confusions with regard to payment of service tax on Multi Level Marketing services under the taxable category of Business Auxiliary Service - benefit of Section 80 ibid should be available to the appellant for non-imposition of penalties. The appeal is allowed by way of remand to the Original Authority for quantification of the service tax demand within the normal period of limitation.
Issues:
1. Classification of services under Business Auxiliary Service (BAS) for Multi-level Marketing activities. 2. Invocation of extended period of limitation for service tax demand confirmation. 3. Imposition of penalties under Section 76, 77, and 78 of the Finance Act, 1994. Analysis: 1. The appeal challenged the order confirming service tax demand against the appellant engaged in Multi-level Marketing services for a company. The issue revolved around the classification of services under BAS. The appellant argued that a previous Tribunal order had resolved the contentious issue, classifying such activities as BAS. The appellant sought to limit the service tax demand to the normal period and requested the benefit of Section 80 to avoid penalties. 2. The Revenue, represented by the Advocate, contended that penalties were justified based on a previous Tribunal decision against the appellant for non-payment of service tax within the prescribed timeframe. The Tribunal noted the resolution of the Multi-level Marketing service tax issue in a previous case and held that the extended period of limitation could not be invoked for the demand confirmation. The Tribunal emphasized that penalties could not be imposed due to confusion regarding service tax payment for such activities, as established in the previous case. 3. After hearing both parties and examining the case records, the Tribunal concluded that the demand should be limited to the normal period. The matter was remanded to the Original Authority for quantification of the service tax liability within the normal period. The Tribunal also set aside the penalties imposed under Sections 76, 77, and 78 of the Finance Act, 1994, citing the benefit of Section 80 for non-imposition of penalties due to confusion surrounding the payment of service tax for Multi-level Marketing services classified under BAS. In conclusion, the appeal was allowed for remand to the Original Authority for quantifying the service tax demand within the normal period, while the penalties imposed against the appellant were set aside based on the benefit of Section 80 and the previous Tribunal decisions.
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