2023 (11) TMI 15 - AT - Service Tax

Time Limitation - suppression of facts - non-furnishing of information - overlapping demands - HELD THAT - A perusal of the Show Cause Notice makes it clear, and admittedly, that there is no specific service alleged against the appellant, as having been rendered by it; rather, a consolidated tax liability has been worked out, which makes it indefensible. Moreover, after going through the reply and explanation filed by the assessee to the Show Cause Notice, it is found that the Revenue has not properly answered the arbitrariness in proceeding further, in an unfair manner thereby recording that which is convenient rather than placing proper facts on record as to the earlier Show Cause Notices, earlier audits in 2010 and 2012 - It is not only about the overlapping demands, it mainly highlights the fact that the activities of the appellant were in the knowledge of the Department and that there was nothing that the appellant suppressed, which fact has been conveniently ignored by the lower authority. Hence, on this ground alone, it becomes very difficult to sustain the demand invoking the extended period of limitation. The demand in the impugned order cannot sustain, for which reason the same is set aside - Appeal allowed.

Summary

Issues Involved:
1. Allegation of non-cooperation and non-furnishing of documents by the assessee.
2. Legality of the Show Cause Notice and the demand of Service Tax.
3. Invocation of the extended period of limitation.
4. Overlapping demands and previous audits.

Summary:

1. Allegation of Non-cooperation and Non-furnishing of Documents:
The Revenue alleged that the assessee did not produce documents required for statutory auditing, leading to a Show Cause Notice (SCN) proposing a consolidated tax liability. The assessee countered this by stating that all relevant documents were submitted during internal audits in 2010 and 2012, and there was no objection raised then. The SCN did not refer to any specific documents from the Income Tax department, nor were these shared with the assessee.

2. Legality of the Show Cause Notice and the Demand of Service Tax:
The assessee argued that the SCN was vague, lacking specificity regarding the services rendered and relied on pre-existing facts. The Tribunal found that the SCN did not specify the exact services, making it indefensible. It was noted that the Revenue did not address the arbitrariness in proceeding further and ignored the appellant's pleadings about earlier SCNs and audits, resulting in overlapping demands.

3. Invocation of the Extended Period of Limitation:
The Tribunal observed that the activities of the assessee were known to the Department, and there was no suppression of facts. Hence, invoking the extended period of limitation was unjustified, making the demand time-barred.

4. Overlapping Demands and Previous Audits:
The Tribunal highlighted that the Department was aware of the assessee's activities through earlier audits and SCNs. The overlapping demands pointed out by the assessee were not discussed by the lower authority. The Tribunal referred to the case of Commissioner of Central Excise, Bangalore v. M/s. Brindavan Beverages, emphasizing that vague SCNs lacking specific allegations are insufficient to sustain demands.

Conclusion:
The Tribunal concluded that the demand in the impugned order could not sustain due to the lack of specificity in the SCN, the absence of new facts justifying the demand, and the improper invocation of the extended period of limitation. The appeal was allowed with consequential benefits as per law.