2018 (12) TMI 948 - AT - Service Tax

Extended period of limitation - suppression of value of the services - Section 73 of Finance Act, 1944 - Held that - The provisions of Section 73 of the Finance Act, 1994 provides for raising of demand only up to 5 years, even if in case of any suppression on the part of the assessee - In the absence of any authority to raise the demand beyond the period of 5 years, the contentions of the learned advocate is agreed and it is held that the demand could have been raised and confirmed only for the period of 5 years from the relevant date. Matter remanded to the Original Adjudicating Authority for quantification of the demand falling within the period of 5 years from the date of issuance of SCN - appeal allowed by way of remand.

Summary

Issues involved:
1. Suppression of value of taxable services leading to evasion of service tax.
2. Validity of demand raised beyond the normal period of 5 years under Section 73 of the Finance Act, 1994.

Detailed Analysis:
1. The appellants, running an educational coaching and tutorial center, were registered with the Department for "Commercial Training & Coaching Services" and discharging tax liability by filing ST-3 returns. However, investigations revealed suppression of taxable service value, leading to evasion of service tax. Separate show cause notices were issued for the period 2006-07 to 2010-11, resulting in confirmation of demand, interest, and penalties by lower authorities.

2. The advocate for the appellants acknowledged the suppression of service value and did not contest the demand or penalties imposed. However, he argued that the demand extended beyond the permissible 5-year period under Section 73 of the Finance Act, 1994. While this issue was not raised before lower authorities due to expartee orders, the advocate requested permission to address it, citing it as a legal matter with facts on record.

3. The revenue representative agreed that the demand covered the period from 2006-07 to 2010-11, exceeding the 5-year limit as per the show cause notice issued on 30.05.2012. The Tribunal, upon reviewing Section 73 of the Finance Act, 1994, observed that the Act allows demand only within 5 years, even in cases of suppression by the assessee. Consequently, the Tribunal concurred with the advocate's argument, setting aside the impugned orders and remanding the matter to the Original Adjudicating Authority for quantifying the demand within the 5-year period from the show cause notice date. The reduction in demand would impact penalty calculation, which the Authority would re-adjudicate.

4. In conclusion, all appeals were disposed of accordingly, emphasizing the limitation on raising demands beyond 5 years as stipulated by the Finance Act, 1994. The Tribunal's decision focused on upholding legal provisions while ensuring proper quantification and adjudication of demands within the statutory timeframe.