2023 (8) TMI 537 - AT - Service Tax

Invocation of Extended period of limitation - issuance of SCN u/s 73 (1) of the Finance Act, 1994 - although the appellants did not take registration in time, but later on, they themselves taken registration and paid the service tax - HELD THAT - Although the appellants were liable to pay service tax from the year 2005 onwards and have not taken service tax Registration at that time, but later on, they have taken service tax registration and paid the entire amount of service tax due against them in their own motion. The facts were known to the Department at the time of filing of ST-3 Returns for not paying service tax in time. In that circumstances, when it was known to the Department, therefore, the show-cause notice issued by invoking extended period of limitation, is not sustainable - the service tax already paid has been appropriated which has not been disputed by the appellants, the same is confirmed. But the penalties imposed on the appellants are set aside. As there is no suppression of facts, on relying on the decision of the HINDUSTAN INSECTICIEDES LTD. VERSUS COMMISSIONER CENTRAL EXCISE, LTU 2013 (8) TMI 225 - DELHI HIGH COURT , it is held that the demand of interest for extended period of limitation is also not sustainable. But the appellants are liable to pay interest for the period within limitation. Appeal disposed off.

Summary

Issues involved:
The issue in this case revolves around the liability of the appellants to pay service tax under reverse charge mechanism for utilizing "Goods Transport Agency" services, the delay in obtaining service tax registration, the demand for service tax, interest, and penalties imposed on the appellants, and the invocation of the extended period of limitation.

Issue 1: Liability to pay service tax under reverse charge mechanism and delayed registration:
The appellants, manufacturers of excisable goods, used transportation services and were liable to pay service tax under reverse charge mechanism. They did not obtain service tax registration on time but later voluntarily registered and paid the outstanding service tax. Show-cause notices were issued demanding service tax, interest, and penalties for the period before October 2005 to March 2010.

Issue 2: Invocation of extended period of limitation:
The appellants argued that since they voluntarily registered and paid the service tax, the extended period of limitation should not have been invoked. The Revenue contended that the extended period was rightly invoked due to the appellants' deliberate delay in registration and payment.

Decision:
The Tribunal found that the appellants had eventually registered and paid the service tax on their own accord. As the facts were known to the Department when the ST-3 Returns were filed, the show-cause notice invoking the extended period of limitation was deemed unsustainable. Citing precedent cases, the Tribunal held that the extended period of limitation was not applicable in this case. The service tax already paid by the appellants was confirmed, and penalties were set aside. The demand for interest for the extended period was also deemed unsustainable, but the appellants were liable to pay interest within the limitation period.

Conclusion:
In conclusion, the Tribunal ruled in favor of the appellants, confirming the service tax already paid while setting aside the penalties imposed. The demand for interest for the extended period was deemed unsustainable, but the appellants were directed to pay interest within the limitation period. The appeals were disposed of accordingly.