2018 (12) TMI 23 - AT - Service Tax

Non-payment of Service tax - business auxiliary services - erection, commissioning & installation services - maintenance and repair services - Held that - No doubt the Service Tax as demanded by the impugned show cause notice was to be deposited against the correct Service Tax Code of the appellant. There is admittedly no evidence for the deposit of impugned demand in the appellant s Service Tax Code. But, the record bears the copy ot ST-3 Return as was filed by the appellant for the disputed period. Perusal thereof makes it abundantly clear that the said return is about the impugned amount only and that it was filed on 14.04.2011 itself. Accordingly, irrespective the amount was not actually deposited against the appellants ST Code, the fact remains is that the notice of impugned mistake was to the Department since April 2011 itself. In the given circumstances, the allegations of the Department about suppression of facts on part of the appellant with the mention that the mistake came to the notice only at the time of Audit is not sustainable specially in a case where the duty has been paid, however, to a wrong Excise Code. Extended period of limitation - Held that - The period in dispute is of the year 2011. The show cause notice has been issued to the year 2014. The impugned mistake was in the notice of Deptt. since the year 2011 - SCN is barred by limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Allegation of non-payment of Service Tax by the appellant.
2. Discrepancy in the payment of Service Tax amounting to ?67,918.
3. Refund claim filed by the appellant.
4. Barred by limitation - Extended period invoked.
5. Department's contention of suppression of facts by the appellant.

Analysis:
1. The appellant, engaged in providing various services, was alleged to have not discharged its liability of paying Service Tax amounting to ?67,918 for the period 2010-11. The Department observed a discrepancy in the payment against an incorrect Code No. AAOFA 3157 ESP 001, leading to the issuance of a show cause notice.

2. The appellant contended that the Service Tax amount was deposited in the Central Government's account but under a wrong name and Code due to a clerical error. Despite a refund claim initially rejected, the Commissioner (Appeals) later allowed the refund. The appellant requested to consider the refunded amount as payment, but an audit objection was raised, resulting in the show cause notice.

3. The Department argued that even though the appellant was refunded, the responsibility to deposit the disputed Service Tax remained. The Department contended that the mistake was not voluntarily disclosed by the appellant and was revealed only during an audit, justifying the invocation of the extended period for issuing the show cause notice.

4. The Tribunal noted that the appellant was allowed a refund of ?69,119 for the wrongly deposited amount against a different Code. The appellant claimed the refund was to be adjusted against the liability in question, although no evidence of such adjustment was found. The Tribunal observed that the Department was aware of the mistake since 2011, and the show cause notice issued in 2014 was thus held to be barred by limitation.

5. Relying on a previous legal precedent, the Tribunal held that the payment made, even if under a wrong Code, should not result in further liabilities. The Tribunal found the Department's allegation of suppression of facts unsustainable, given that the mistake was known since 2011. Consequently, the show cause notice was deemed unsustainable, and the appeal was allowed in favor of the appellant.