2018 (9) TMI 1513 - AT - Service Tax

Extended period of limitation - wilful suppression of facts - prevalent confusion - evasion of duty or not - liability of service tax - incentive against the segment books by the appellants. Held that - It is an apparent admission of the appellant that the service incentives as have been received from the various above mentioned companies have not been shown in their returns irrespective those have been filed regularly and also in time. It is also an apparent admission of the appellant that they are paying service tax on the said activity now. The perusal of the said notification shows that the impugned confusion was brought to the notice of Ministry of Finance only in the year 2012 - the impressing upon confusion w.e.f. 2012 onwards cannot be allowed to extend any benefit to the appellant. In the era of self-assessment, the onus heavily lies upon by the appellant to declare the income received and to discharge the respective liability. Apparently and admittedly the same is missing in the present case. For these reasons, the authorities relied upon by the appellant are not opined applicable to the present case. The reliance upon the Notification of 2016 is opined to be clearly an afterthought and an attempt to improve upon the case despite the facts that liability of the appellant has been confirmed even by the Hon ble Supreme Court - these facts clearly amounts to willfully suppressing the material facts in addition also amount to contravention of the provision of the act. The department has rightly invoked the extended period of limitation - appeal dismissed - decided against appellant.

Summary

Issues:
1. Invocation of the extended period of limitation for service tax demand.

Analysis:
The case involved the issue of invoking the extended period of limitation for a service tax demand raised against the appellant, who was registered for providing services as an Air Travel Agent, Tour travel agent service, and business auxiliary service. The Department observed that the appellant was receiving incentives from CRS companies for issuing air tickets but had not declared these incentives in their returns. The Department raised a demand for the incentives received by the appellant from 2003 to 2008. The Original Adjudicating Authority and Commissioner (Appeals) confirmed the demand. The matter was then brought before the Tribunal, which upheld the previous orders. Subsequently, the Hon'ble Supreme Court remanded the case to consider the issue of invoking the extended period of limitation.

The appellant argued that they had been filing returns regularly and cooperating with the Department, so there was no suppression of facts to warrant invoking the extended period of limitation. They also mentioned a prevalent confusion regarding the services, which was clarified later through a circular. The appellant contended that the demand raised was time-barred based on relevant case law.

On the other hand, the Department argued that the Adjudicating Authority had valid grounds to invoke the extended period of limitation due to suppression of facts by the appellant. They emphasized that in the self-assessment era, any suppression or misrepresentation by the appellant amounted to tax evasion.

After hearing both sides, the Tribunal noted that the appellant had not declared the incentives received in their returns despite paying service tax on the activity now. The confusion regarding the incentives was only clarified in 2012, and the appellant did not seek clarification before that. The Tribunal held that the appellant willfully suppressed material facts and contravened the law, justifying the Department's invocation of the extended period of limitation. Consequently, the appeal was dismissed.

In conclusion, the Tribunal upheld the Department's decision to invoke the extended period of limitation for the service tax demand, considering the appellant's willful suppression of material facts and failure to declare income received, leading to the dismissal of the appeal.