2023 (1) TMI 56 - AT - Service Tax

Extended period of limitation - Issue involved was subject to various litigation - Correctness of proceedings initiated in show-cause notice dated 15th April 2014 for the period from 2008 to 2012 - inconsistent with bar of limitation prescribed in section 73 of Finance Act, 1994 - HELD THAT - It is seen from the records that show-cause notice for the period from October 2003 to September 2008 dated 6th April 2009 on the same issue had been adjudicated and was carried to the Tribunal who, while upholding the default, had held that the demand was liable to be restricted only to the normal period in section 73 of Finance Act, 1994. An appeal against this order of the Tribunal, though admitted, is, as yet, pending before the Hon'ble Supreme Court. The demand for October 2003 to September 2008 has been, thus, curtailed and the present demand leading to the impugned order relates to the period thereafter till 2012 for which show-cause notice was issued on 15th April 2014. This appeal of Revenue seeking recovery as proposed in the demand by invoking of the extended period for subsequent period of time is not correct in law - the appeal of Revenue is dismissed.

Summary

Issues:
Impropriety of dropping proceedings based on limitation prescribed in section 73 of Finance Act, 1994.

Analysis:
The appeal by Revenue challenges the dropping of proceedings initiated in a show-cause notice dated 15th April 2014 for the period from 2008 to 2012 due to being inconsistent with the limitation prescribed in section 73 of the Finance Act, 1994. The issue revolves around fastening liability on M/s National Institute of Bank Management for providing taxable services related to commercial training and coaching, specifically a post-graduate course in management. The appeal contends that the respondent had knowledge of their liability, as per a letter from the Central Board of Excise & Customs (CBEC) and judicial rulings.

The adjudicating authority dropped the proceedings for non-compliance with the prerequisite enabling the invocation of the extended period. The Tribunal emphasized that lack of knowledge is not a defense; rather, it is the suppression of fact, willful misstatement, or fraud that must be proven. The Tribunal referred to a previous case where a demand was restricted to the normal period, not the extended period. The Tribunal also highlighted a Supreme Court judgment regarding the limitation issue, emphasizing that if facts were already known to the authorities, suppression of facts cannot be claimed by the department.

The Tribunal found that the demand for the period from October 2003 to September 2008 had been curtailed, and the present demand for the period up to 2012 was not sustainable under the extended period. Citing Supreme Court judgments, the Tribunal concluded that there was no suppression of facts by the appellant, and hence, the appeal by Revenue was dismissed. The decision was based on the principles laid down by the Supreme Court regarding the invocation of the extended period of limitation when facts were already known to the authorities.

In conclusion, the Tribunal upheld the dropping of proceedings for the period from 2008 to 2012 due to the lack of evidence of suppression of facts or willful misstatement. The decision was based on legal principles established by previous Supreme Court judgments, emphasizing that if facts were already known to the authorities, the extended period of limitation cannot be invoked.