2023 (10) TMI 500 - AT - Service Tax

Invocation of Extended period of Limitation - SCN issued by way of change of opinion - short payment of service tax - HELD THAT - The Revenue had adequate notice of the affairs of the appellant as they were registered with the Department and were filing regular returns. Further there was audit by Revenue during Feb. 2016 and no such objection was raised. Further upon requisition by the Revenue the appellant have filed the requisitioned documents like copy of the IT Return Form 26 AS Balance Sheet etc. during June 2016 but thereafter Revenue slept over the matter. Apparently the show cause notice is issued by way of change of opinion. The extended period of limitation is not invokable in the facts and circumstances - Appeal allowed.

Summary

Issues involved:
The appeal concerns the correctness of the show cause notice issued invoking the extended period of limitation.

Details of the judgment:
The appellant provided construction services and regularly filed Service Tax Returns. Following a request for documents, the appellant submitted necessary paperwork, including ST-3 Returns and challans. Subsequently, a show cause notice was issued alleging short payment of service tax. The notice was adjudicated, resulting in a demand for service tax, penalty, and interest. On appeal, the demand was partially dropped, but a tax demand for short payment was confirmed. The appellant challenged the notice on grounds of limitation and change of opinion.

The Commissioner (Appeals) framed the issues as whether the demand for certain periods was time-barred and whether the service tax demand should be reduced. The Adjudicating Authority confirmed a tax demand for short payment, prompting the appellant to appeal again, emphasizing the issue of limitation.

The Tribunal noted that the appellant voluntarily paid the alleged short-paid tax for a specific period, indicating the justifiability of invoking the extended period. However, the Tribunal agreed with the appellant that the show cause notice appeared to be issued based on a change of opinion rather than new facts. Citing previous judgments, the Tribunal held that the extended period of limitation cannot be invoked solely on a change of opinion.

Considering the facts and submissions, the Tribunal found that the Revenue had prior knowledge of the appellant's affairs, as evidenced by regular returns and a previous audit where no objections were raised. The Tribunal concluded that the show cause notice was indeed a change of opinion and ruled in favor of the appellant, setting aside the impugned order and granting consequential benefits to the appellant.

(Order pronounced on 05.10.2023).