2021 (4) TMI 640 - AT - Service Tax

Interest on differential amount of service tax - revision of price of storage charges - Section 75 of the Finance Act, 1994 - Extended period of limitation - HELD THAT - There is no case of fraud, mis-representation or suppression of facts on the part of the appellant as they have disclosed the additional taxable turnover arising out of the issue of supplementary invoices and has also paid tax in time and also disclosed such turnover in their books of accounts and returns filed with the Department. In this view of the matter, the demand for the period July, 2012 to March, 2013 is barred by limitation. The appeal is allowed in part.

Summary

Issues involved:
- Whether interest on the differential amount of service tax due to the revision of storage charges is payable under Section 75 of the Finance Act, 1994.
- Whether the demand for interest on the additional service tax amount is barred by limitation.

Analysis:
1. Interest on Differential Amount of Service Tax:
The appellant provided storage services to a company, and after a revision in prices, issued supplementary invoices to recover the differential amount. The revenue issued a show cause notice demanding interest on the additional service tax amount due to the revision of prices. The Apex Court's ruling in a similar case was cited to support the demand for interest. The Commissioner (Appeals) upheld the demand. However, the appellant referred to a subsequent judgment by the Larger Bench of the Supreme Court, which held that interest is payable under similar circumstances. The appellant did not contest the demand on merits but argued against any allegation of suppression or misconduct. The appellant maintained that they paid the tax based on the original invoice rate and subsequently paid the differential tax upon price revision. The appellant argued that the demand for interest was issued after the limitation period and sought relief on this ground.

2. Limitation on Demand for Interest:
The appellant contended that the demand for interest on the additional service tax amount was time-barred. The appellant argued that the limitation period under the Service Tax Act during the relevant period was 18 months, and as the show cause notice was issued after the limitation period, the demand for the period in question should be considered time-barred. The appellant emphasized that there was no fraud, misrepresentation, or suppression of facts, as they disclosed the additional taxable turnover, paid the tax on time, and included the turnover in their records and returns. The Tribunal agreed that the demand for the specific period was barred by limitation and directed the appellant to pay the balance demand as per the Supreme Court's ruling in a relevant case.

In conclusion, the Tribunal allowed the appeal in part, holding that the demand for interest for a specific period was time-barred due to no fraud or misrepresentation by the appellant. The appellant was directed to pay the balance demand as per the Supreme Court's ruling.