2018 (1) TMI 1134 - AT - Service Tax

Extended period of limitation - case of Revenue is that Since the assessee-Respondents neither filed statutory return nor paid the Service Tax, they cannot take the plea against the limitation - Held that - the Department has failed to establish that the appellant has intentionally evaded the service tax by suppression of facts. If the appellant bonafidely believed that the service provided by them are not taxable as held by the Department and accordingly did not pay the service did not file the service tax return for such services, then the appellant cannot be held guilty of suppression of facts with intend to evade service tax as required for invoking extended time and also for imposition of penalty under Section 78 of the Finance Act, 1994 - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Appeal against Order-in-Appeal allowing limitation plea on service tax demand for the period April to September, 2006.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals-I), Jaipur, allowing the limitation plea on the service tax demand for the period April to September, 2006. The Revenue contended that under self-assessment, it was the responsibility of the assessee to register with the Department and pay the proper tax for taxable services. Since the assessee did not file statutory returns or pay the service tax, they could not plead limitation. The Revenue also cited certain decisions in rebuttal. The Commissioner observed that the appellant's argument had force, as they believed they were not liable to pay service tax based on a previous order. The Commissioner held that the Department failed to establish intentional evasion of service tax by the appellant. It was noted that the extended time limit was not applicable for demanding service tax for the period 2006-07. The demand for service tax from April to September 2006 was deemed time-barred, while the demand for October 2006 to March 2007 was upheld. The amount already paid by the appellant was appropriated accordingly.

The Tribunal found that the grounds of appeal by the Revenue had no merit in light of the factual findings by the Commissioner. As no other issues were raised, the appeal filed by the Revenue was dismissed. The Tribunal agreed with the Commissioner's findings and upheld the decision regarding the limitation plea on the service tax demand for the specified period. The appeal was dismissed, affirming the previous order-in-appeal.