2018 (9) TMI 1380 - AT - Service Tax

Extended period of limitation - Repair and maintenance services - Inclusion of value of the goods used in the said services - demand raised by invoking extended period - Held that - The appellant were duly registered with the department and were filing the ST-3 returns by showing payment of Service Tax on the value of the services as indicated in the contracts entered by them with the said Public Sector Undertaking. In such a scenario the appellant was entertaining a bona fide belief and there was no mala fide on their part so as to justifiably invoke the longer period of limitation. Demand beyond normal period set aside - As a part of demand falls within the limitation period, the adjudicating authority is directed to re-quantify the demands against all the appellants for which purpose, the matter is remanded to him - appeal allowed by way of remand.

Summary

Issues:
- Dispute over the value of goods used in repair and maintenance services
- Allegations of willful misstatement and suppression by the Revenue
- Invocation of longer period of limitation for demands
- Bifurcation of services and goods value in the contract
- Applicability of extended period for demands
- Imposition of penalties on the assesses

Analysis:
The judgment by the Appellate Tribunal CESTAT ALLAHABAD involved a dispute regarding the value of goods used in repair and maintenance services provided under a contract with a Public Sector Undertaking. The Revenue alleged willful misstatement and suppression by the appellants for not providing the exact value of goods used, leading to demands being confirmed and the invocation of a longer period of limitation. The appellants argued that they had discharged their Service Tax liability based on the value of services indicated in the contracts, despite not separately showing the value of goods in the contract or bills raised.

The Tribunal considered the appellant's argument that they had a bona fide belief in adopting the assessable value of services as per the contract with the Public Sector Undertaking, and hence, there was no mala fide intention on their part to warrant the invocation of the longer period of limitation. Consequently, the Tribunal held that the extended period was not applicable to the Revenue and directed the re-quantification of demands falling within the limitation period by the adjudicating authority.

Regarding the imposition of penalties, the Tribunal found no mala fide on the part of the assesses and therefore set aside the penalties imposed. The judgment concluded by disposing of all four appeals in the manner described, emphasizing the absence of mala fide intentions and the lack of justification for invoking the longer period of limitation based on the circumstances presented during the proceedings.