2018 (8) TMI 807 - AT - Service Tax

Business Auxiliary Services - appellant was treating the water for M/s Sigrauli Super Thermal Power Station by chemical - Held that - The issue is covered by the said decision of the Tribunal in the case of M/s Hitech Industrial Lining Pvt. Ltd. Vs Commissioner of Central Excise, Salem 2017 (8) TMI 837 - CESTAT CHENNAI , in favor of the assessee. The demand is also barred by limitation having been raised after the normal period. In the absence of any positive evidence to reflect upon any malafide on the part of the assessee, extended period is not available to the Revenue. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Business Auxiliary Services, Tax liability prior to 16.06.2005, Limitation period for raising demand, Availability of extended period for Revenue

Interpretation of Business Auxiliary Services:
The appellant treated water for a thermal power station using chemicals, which the revenue considered as providing Business Auxiliary Services. A demand was raised for a specific period, and a penalty was imposed. The appellant argued that as per an amendment effective from 16.06.2005, processing of goods for clients was included in Business Auxiliary Services. They relied on a Tribunal decision supporting their position.

Tax liability prior to 16.06.2005:
The appellant contended that since the services were provided before 16.06.2005, no tax liability should arise. The Tribunal's decision cited by the appellant favored their argument. The judgment highlighted that the amendment introducing processing of goods for clients under Business Auxiliary Services was effective from 16.06.2005, which was after the period in question.

Limitation period for raising demand:
The judgment noted that the demand raised by the revenue was beyond the normal period, making it barred by limitation. The absence of evidence indicating malafide on the part of the assessee meant that the extended period was not available to the revenue. This aspect further supported the appellant's case.

Availability of extended period for Revenue:
Considering the favorable Tribunal decision, the absence of any malafide intent on the part of the assessee, and the demand being raised beyond the normal period, the judgment set aside the impugned order. The appeal was allowed, providing consequential relief to the appellant. The decision highlighted the importance of evidence and legal timelines in determining tax liability and the availability of extended periods for revenue.