2019 (3) TMI 1395 - AT - Service Tax

Rectification of mistake - error apparent on the face of record or not - failure to discharge the service tax - suppression of facts - time limitation - Held that - The applicant has not been able to rebut the allegations with regard to suppression of facts raised in the show-cause notice and confirmed by the authorities below. The non-payment of tax could not have come to light but for the audit conducted by the department. For these reasons, the plea of the applicant on the ground of limitation is without factual basis. There is no apparent error in the final order - Further, the question of limitation is a question of fact and would vary from case-to-case - ROM Application dismissed.

Summary

Issues: Rectification of mistake in Final Order regarding limitation grounds not considered.

Analysis:
The appellants filed an application seeking rectification of a mistake in Final Order No.40508/2018, dated 27.02.2018, as the issue of limitation grounds was not adequately addressed. The appellant's counsel argued that even though the plea of limitation was recorded by the Tribunal in the impugned order, it was not considered while recording the findings. The appellant contended that since the Commissioner (Appeals) had set aside the demand for the subsequent period on the ground of limitation, the demand in the present appeal should also have been set aside. The Revenue's representative opposed the application, stating that there was no apparent error requiring rectification. The Tribunal, upon reviewing the impugned order, noted that the issue of limitation was recorded in the submissions but was not adequately addressed in the findings.

The penalties imposed were set aside based on a reasonable explanation for the failure to discharge service tax, but penalties under section 78 were proposed for alleged suppression of facts regarding taxable services. The adjudication authority found that the applicant had not discharged service tax and had not disclosed receiving incentives, leading to the imposition of penalties under section 78. The Tribunal clarified that the issue of whether the incentives were liable to service tax was interpretational, and penalties were set aside considering the arguments presented. However, this did not warrant setting aside the demand on the ground of limitation. The Tribunal found that the applicant failed to rebut the allegations of suppression of facts, which came to light only through a departmental audit, leading to the dismissal of the plea of limitation due to lack of factual basis.

The Tribunal concluded that there was no apparent error in the final order, emphasizing that the question of limitation is a factual matter that varies case by case. Consequently, the application for rectification of mistake was found to lack merit and was dismissed, with the pronouncement made in open court on 06.02.2019.