2018 (6) TMI 478 - AT - Service Tax

Invocation of Extended period of limitation - proviso to Section 73 (1) and Section 75 of the Finance Act, 1994 - Air Travel Agent services - suppression of facts or not? - Held that - A mere non-disclosure of the fact cannot make a guilty mind of the assessees so as to justifiably invoking the longer period - Hon ble SC in the case of Collector of Central Excise Vs. Chemphar Drugs & Liniments 1989 (2) TMI 116 - SUPREME COURT OF INDIA has observed that a mere inaction or failure on the part a manufacturer is not sufficient to invoke the larger limitation of five years and the same would be applicable only when something positive indicating that the manufacturer had the reasonable belief that he has to give the particular information. In the present case, there is no evidence of any malafide on the part of the assesse. Also, the said issue was the subject matter of litigation with the Revenue pending at various levels and all the Air Travel Agents were fighting the case with the department on the taxability. As such, it cannot be held that the present appellant was guilty of any suppression or mis-statement etc., so as to invoke the larger period of limitation - the major part of the demand, being beyond the normal period of one year is barred by limitation. A part of the demand would fall within the limitation period for which the matter is remanded to the original adjudicating authority for re-quantification of the demand - appeal allowed by way of remand.

Issues: Change of cause title due to jurisdiction and address change, Service tax liability on incentives received, Limitation period for demand, Imposition of penalties

Change of Cause Title:
The judgment addresses a miscellaneous application for a change of cause title filed by the Revenue due to a change in the jurisdiction of the appellant and the address of the respondent. The application is allowed, changing the jurisdiction and address of the respondent from CST, Chennai to The Commissioner of GST & Central Excise, Chennai South Commissionerate.

Service Tax Liability on Incentives Received:
The case involves an appellant who is an 'Air Travel Agent' and had earned income through incentives received from software companies for using Computer Reservation Systems (CRS) software in their business. The appellant did not discharge the service tax liability on the incentives received, leading to a demand for service tax along with interest and proposed penalties. The lower appellate authority confirmed the demand, which was further rejected by the Commissioner (Appeals).

Limitation Period for Demand:
The appellant contested the demand on the grounds of limitation, stating that the issue was under litigation with travel agents arguing against the taxability of incentives/commissions received from software companies. The appellant claimed no evidence of suppression with a malafide mind, thus challenging the invocation of the extended period for demand. The Tribunal held that the demand beyond the normal period of one year was barred by limitation due to the absence of malafide intent on the part of the appellant.

Imposition of Penalties:
The judgment concluded that as there was no malafide intent on the part of the appellant and the issue was under litigation with no evidence of suppression, penalties were not justified. The matter was remanded to the original adjudicating authority for re-quantification of the demand within the limitation period, and the imposition of penalties was set aside. The appeal was allowed by way of remand.

This detailed analysis of the judgment covers the issues of change of cause title, service tax liability on incentives received, limitation period for demand, and the imposition of penalties, providing a comprehensive overview of the legal proceedings and the Tribunal's decision.

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