2018 (2) TMI 1053 - AT - Service Tax

Advertising service to Government Departments - non-payment of service tax - case of appellant is that since the first demand notice was issued invoking extended period, alleging suppression second demand notice invoking extended period is bad in law - Held that - the principles laid down by the Hon ble Supreme Court in Nizam Sugar Factory 2006 (4) TMI 127 - SUPREME COURT OF INDIA is applicable to present case, where it was held that When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. Thus there was no suppression of facts on the part of the assessee/appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Barred by limitation - extended period of limitation invoked
- Allegation of suppression of facts
- Applicability of judgment in Nizam Sugar Factory case

Analysis:
1. Barred by limitation - extended period of limitation invoked:
The appellant contested the demand notice for Service Tax issued for the period 2002-03 to 2005-06, arguing that it was barred by limitation. The appellant referred to a previous demand notice for the period 1997-98 to 2001-02, where the extended period of limitation was invoked. The appellant relied on the judgment of the Hon'ble Supreme Court in the Nizam Sugar Factory case to support their argument. The Tribunal analyzed the facts and held that the appellant successfully established a case on limitation, concluding that the demand was indeed barred by limitation.

2. Allegation of suppression of facts:
The Revenue argued that the appellant continued the same practice of not discharging Service Tax even after a previous judgment by the Tribunal. The Revenue contended that this amounted to mis-declaration, justifying the invocation of a larger period for the demand. However, the Tribunal found that the facts and circumstances of the present case were similar to those in the Nizam Sugar Factory case. Citing the Supreme Court's observation that the same/similar facts cannot be considered suppression when already known to the authorities, the Tribunal held that there was no suppression of facts on the part of the appellant.

3. Applicability of judgment in Nizam Sugar Factory case:
The Tribunal extensively discussed the Nizam Sugar Factory case to analyze the issue of limitation and suppression of facts. By applying the principles laid down by the Supreme Court in that case, the Tribunal concluded that the appellant's case aligned with the judgment. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal's decision in this case highlighted the importance of establishing a case on limitation, considering the applicability of previous judgments, and assessing the allegations of suppression of facts in determining the validity of a demand notice for Service Tax.