2018 (12) TMI 868 - AT - Service Tax

Recovery of Service tax short paid - booking tickets based on Central Reservation System - extended period of limitation - penalty - Held that - Since part of the demand has already been dropped by the Commissioner and the DR is not in Appeal there is no infirmity in the Order. Period of Appeal has already expired. The Order has attained finality with respect to the demand dropped. It is apparent from record that the demand has already been paid by the appellant in due time at the appropriate rate and the requisite returns have also been regularly filed. All these documents have been provided to the authorities below but still the amount of 1, 11, 415/- has been confirmed. Since this is the appellant s case that those documents if perused sufficiently prove that the impugned liability for the period in dispute stands already paid - it is opined that those documents be verified by the adjudicating authorities below itself however to the said limited aspect of as to whether the documents on record are sufficient to prove the discharge of liability by the appellant for the disputed period that too in due time. Penalty - Held that - There has been a plethora of judgments holding that existing confusion cannot be attributed as an act of having intention to evade the duty. In the present case appellant pleads that his duty has already been paid it is only that the authorities below have ignored to the same. Extended period of limitation - proviso of Section 73 of Finance Act 1944 - Held that - Department was not entitled to undertake the proviso of Section 73 of Finance Act 1944 for invoking the extended period of limitation. Hence the demand beyond the normal period of limitation is held to be barred by time. Appeal allowed by way of remand.

Summary

Issues:
1. Recovery of allegedly short-paid service tax.
2. Appellant contesting tax liability for the disputed period.
3. Imposition of penalty by the Department.

Analysis:
1. The Department observed that the appellant collected service tax at the full rate from customers but deposited only the differential service tax after deducting the amount paid to other air travel agents. A show cause notice (SCN) was issued proposing the recovery of service tax, which was confirmed by the original adjudicating authority. The Commissioner (Appeals) partially allowed the appeal, reducing the amount of service tax. The appellant argued that a prior SCN had been served, and the impugned SCN was issued due to confusion. The appellant maintained that the tax liability for the disputed period had been discharged within the proper timeframe, even though the format for providing details did not mention the tax paid. The tribunal noted that the documents provided by the appellant prove the discharge of liability, and the demand confirmed was set aside.

2. The tribunal considered the confusion regarding the appellant's tax liability for the disputed period. The appellant contended that the tax liability had been clarified as per a TRU letter, and the amount had been paid on time with regular filing of returns. The range superintendent's letter, which caused confusion, did not request details of tax paid by the appellant. The tribunal emphasized the need to verify the documents provided by the appellant to prove the discharge of liability for the disputed period. It was concluded that the demand beyond the normal period of limitation was barred by time, and the imposition of penalty was set aside.

3. Regarding the imposition of penalty, the tribunal noted that a prior SCN had been served on the appellant, indicating that the Department was aware of the situation. The tribunal highlighted the confusion prevalent about the taxability of ticket booking agents using the Central Reservation System. Citing existing judgments, it was concluded that the confusion could not be seen as an intention to evade duty. The tribunal held that the Department was not entitled to invoke the extended period of limitation and set aside the penalty. The adjudicating authority was directed to verify the payments made by the appellant for the normal period of one year. The appeal was allowed for this limited purpose.