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2023 (12) TMI 681 - AT - Service TaxExtended period of limitation - Levy of service tax - brokerage in connection with service of steam agent service - period April 2012 March 2013 - HELD THAT - The demand is sustainable on merit. However, this tribunal while considering the overall issue and facts of the case for the earlier period set aside the demand for the extended period in the appellant's own case in INTERMARK SHIPPING AGENCIES PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, RAJKOT 2023 (8) TMI 123 - CESTAT AHMEDABAD . From the above decision it can be seen that the tribunal is of the view that extended period cannot be invoked. The present case is on much better footing for the reason that the show cause notice dated 08.10.2013 was issued subsequent to the earlier show cause notice, therefore, not only on the fact but also on the principle laid down by the Hon'ble Supreme Court in the case of Nizam Sugar 2006 (4) TMI 127 - SUPREME COURT that suppression of fact cannot be invoked in respect of the subsequent show cause notice when on the same issue earlier show cause notice was issued. The demand for the extended period in the present appeal is not sustainable. However, demand for the normal period is sustainable - the impugned order is modified to the above extent - Appeal allowed in part.
Issues involved:
Demand of service tax on brokerage in connection with service of steam agent service for the period April 2012 to March 2013. Summary: Issue 1: Demand for Extended Period The appellant argued that the demand for the extended period cannot be sustained as there was no suppression of fact or malafide on their part. The tribunal found the demand sustainable on merit but set it aside based on the principle established in the appellant's own case for the earlier period. The tribunal held that the services rendered by the appellant as a sub-agent fell under the category of steamer agent service, making them liable to pay service tax. However, the invocation of the extended period under Section 73 of the Finance Act, 1994 was deemed not applicable due to the appellant's bonafide belief and proper recording of transactions. The demand for the extended period was not sustainable, but the demand for the normal period was upheld. Issue 2: Interpretation of Steamer Agent Service The definition of Steamer Agent under Section 65(100) of the Finance Act, 1994 includes any person undertaking services related to ship's husbandry, cargo booking, advertising, or container feeder services for or on behalf of shipping lines. The tribunal concluded that the appellant, acting as a sub-agent, performed the work of a steamer agent on behalf of the main steamer agent. Therefore, the appellant was held liable to pay service tax on the brokerage received for providing steamer agent services. Separate Judgment by Judges: The tribunal highlighted that the demand for the extended period was not sustainable in the present case, as the subsequent show cause notice was issued after the earlier notice, following the principle that suppression of fact cannot be invoked for subsequent notices on the same issue. The penalty was set aside considering the overall facts and circumstances of the case. This judgment clarifies the liability of the appellant for service tax on brokerage income related to steamer agent services, distinguishing between the normal and extended periods for demand, and emphasizing proper interpretation of the steamer agent service definition under the Finance Act, 1994.
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