2018 (2) TMI 1445 - AT - Service Tax

Validity of subsequent SCN - Intellectual Property Right Service - it was the contention of appellant that the Revenue having raised their earlier SCN was debarred from raising a subsequent SCN by invoking the larger period of limitation in respect of the said facts and circumstances - Held that - There is no dispute about the fact that in respect of the same set of proceedings, an earlier SCN was issued under a different category of services. However, subsequently, with the introduction of Intellectual Property Service, being a taxable service, fresh proceedings were initiated by invoking the larger period of limitation. The Hon ble Supreme Court in the case of Nizam Sugar Factory Vs. Collector of Central Excise, A.P. 2006 (4) TMI 127 - SUPREME COURT OF INDIA has categorically held that when the first show cause notice is issued, all the facts come to the knowledge of the Revenue, in which circumstances, subsequent show cause notices cannot be issued alleging suppression of facts on the part of the assessee. The demand is barred by limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service tax demand confirmation for the period 2006-07 under Intellectual Property Right Service.
2. Contention regarding limitation due to prior show cause notice under Consulting Engineer Service.
3. Rejection of appellant's plea by Commissioner (Appeals).
4. Dispute over the invocation of the larger period for fresh proceedings under Intellectual Property Right Service.
5. Application of the principle from Nizam Sugar Factory case by the Tribunal.
6. Decision on the time bar issue and setting aside the impugned order.

Analysis:
1. The judgment revolves around a service tax demand confirmation for the period 2006-07 under Intellectual Property Right Service. The appellant contested the confirmation based on the limitation issue arising from a prior show cause notice under Consulting Engineer Service.

2. The appellant argued that the Revenue, having issued an earlier show cause notice under a different category of services for the same agreement, was debarred from raising a subsequent show cause notice invoking the larger period of limitation. The Commissioner (Appeals) rejected this plea, citing the appellant's failure to disclose payments made to a foreign service provider, leading to the invocation of the extended time limit.

3. The appellate authority disputed the Commissioner's reasoning, emphasizing that fresh proceedings under Intellectual Property Right Service were initiated after the introduction of the taxable service, despite the prior notice under a different category. The Tribunal found no merit in the appellate authority's reasoning and referred to the Nizam Sugar Factory case, which prohibits subsequent show cause notices for the same facts known to the Revenue from the first notice.

4. Following the precedent set by the Nizam Sugar Factory case, the Tribunal ruled that the demand was time-barred. Without delving into the case's merits, the Tribunal set aside the impugned order solely on the grounds of the limitation issue, ultimately allowing the appeal. The judgment highlights the importance of adherence to time limits and the prohibition against multiple notices for the same facts known to the Revenue.