2018 (10) TMI 86 - AT - Service Tax

Extended period of limitation - commercial training and coaching service - renting of immovable property service - mandap keeper service - suppression of facts or not? - Held that - The definitions provided in the service tax statute in respect of the disputed services viz., commercial training and coaching service, renting of immovable property service and mandap keeper service were highly ambiguous with regard to levy of service tax. There were divergent views by different judicial forums with regard to sustainability of levy of service tax on such services. In view of amendment made subsequently in the definition of disputed taxable services and in view of the divergent views expressed by the judicial forums with regards to the levy of service tax on such taxable services, the extended period cannot be invoked for confirmation of service tax demand inasmuch as non-payment of tax, in such eventuality, cannot be attributable to fraud, suppression of facts, collusion, etc. on the part of the tax payer in defrauding Government revenue - the service tax demand confirmed beyond the normal period of limitation has rightly been set aside by the learned Commissioner (Appeals) in the impugned order dated 01/04/2014 - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against impugned order confirming service tax demand
- Invocation of extended period of limitation for confirmation of demand
- Interpretation of ambiguous definitions of taxable services
- Application of retrospective amendments to definition clauses

Analysis:
1. The appeal was filed by the Revenue against the impugned order confirming a service tax demand. The Commissioner of Central Excise & Service Tax (Appeals), Mumbai, set aside the demand confirmed in the adjudication order, except for a specific period related to commercial training and coaching service. The main contention was whether the extended period of limitation could be invoked for confirming the adjudged demand.

2. The respondent, engaged in providing education and renting out property, did not pay service tax for various services during the disputed period. The Commissioner (Appeals) held that the extended period of limitation cannot be invoked for confirming the demands due to ambiguity in the definitions of taxable services. The definitions of services like commercial training, renting of property, and mandap keeper were amended retrospectively to bring clarity, leading to divergent views in judicial forums regarding the levy of service tax on such services.

3. The Tribunal noted that the definitions of the disputed services were highly ambiguous regarding the levy of service tax. Amendments were made with retrospective effect to provide clarity. The Tribunal cited the case law to support the position that in case of retrospective amendments and ambiguity in definitions, the extended period of limitation cannot be invoked for confirming service tax demand. The Tribunal concluded that non-payment of tax in such situations cannot be attributed to fraud or collusion, leading to the dismissal of the Revenue's appeal.

4. The Tribunal highlighted that due to the retrospective amendments and divergent views on the levy of service tax on disputed services, the extended period of limitation was not applicable in this case. The judgment emphasized that the demand confirmed beyond the normal period of limitation was rightly set aside by the Commissioner (Appeals). Consequently, the appeal filed by the Revenue was dismissed by the Tribunal.