2023 (10) TMI 1160 - AT - Central Excise

Invocation of extended period of limitation - suppression of facts or not - Levy of service tax - Business Auxiliary Service - commission income received on account of sale of bonds. Appellant contended that the services rendered by them in relation to marketing of securities have been concluded prior to June 2003 and service tax under the category of Business Auxiliary Service was introduced as a taxable service only w.e.f 01.07.2003, as defined under Section 65(105)(zzb)of the Finance Act, 1994. HELD THAT - The Appellant has not denied the rendering of services related to sale of bonds and earning commission income. The contention of the Appellant is that such services were rendered by them prior to introduction of service tax under the category of Business Auxiliary Service w.e.f 01.07.2003. The bills submitted by them in support of this claim was not accepted by the lower authorities on the ground that there was no running serial number in the bills. Extended period of limitation - HELD THAT - The demand in the impugned order pertains to the period 2003-2004 and the Notice was issued on 11.06.2007, beyond the normal period of limitation. The details of commission income received by the Appellant have been collected by the Audit team form their Audited Balance Sheet, which is a public document. Thus, there is no suppression involved in this case, Hence, the demand raised by invoking extended period of limitation not sustainable. As the Notice was issued on 11.06.2007 for the demand pertained to the period 2003-2004 , the entire demand of service tax in the impugned order is time barred. Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the demand of service tax on commission income received for sale of bonds, rejection of bills by lower authorities, suppression of information, and the invocation of extended period of limitation for raising the demand.

Details of the judgment:

Demand of service tax on commission income:
The Appellant, engaged in providing Clearing and Forwarding Agency services and sale of bonds, received a Show Cause Notice for non-payment of service tax on commission income. The lower authorities confirmed the demand, which was upheld on appeal. The Appellant contended that services related to marketing of securities were rendered before the introduction of service tax under 'Business Auxiliary Service.' However, the bills submitted as evidence were rejected due to lack of a running serial number, leading to the rejection of the claim.

Rejection of bills and suppression of information:
The Appellant argued that they did not suppress any information, as the commission income was reported in their Audited Balance Sheet. The lower authorities invoked the extended period of limitation for raising the demand, but the Appellant maintained that since there was no suppression of facts, the demand based on the extended period was not sustainable.

Invocation of extended period of limitation:
The demand in the impugned order pertained to the period 2003-2004, with the Notice issued in 2007, beyond the normal limitation period. The Audit team collected details of commission income from the Audited Balance Sheet, indicating no suppression. Consequently, the demand based on the extended period was deemed time-barred, leading to the setting aside of the impugned order on the ground of limitation.

In conclusion, the appeal filed by the Appellant was allowed, with the judgment pronounced on 27.06.2023 by the Appellate Tribunal CESTAT KOLKATA.