2024 (1) TMI 828 - AT - Service Tax

Jurisdiction - power of Assistant Commissioner, Bhavnagar-I to demand service tax for services if any provided at Balmer in Rajasthan - extended period of limitation - HELD THAT - It is observed that appellant was engaged in full-time services with M/s. Cairn Energy India Ltd at Balmer office in Rajasthan, the taxable services if any is also provided at Balmer in Rajasthan. Demand of Service tax is confirmed by Order of Assistant Commissioner, Bhavnagar-I who has no jurisdiction to demand tax at Balmer in Rajasthan. The demand of service tax is without jurisdiction. Impugned Order is therefore liable to be set aside - Appeal allowed.

Summary

Issues involved:
The appeal against the Order-In-Appeal upholding service tax demand under section 73 (1) of the Finance Act, 1994.

Jurisdictional Challenge:
The appellant argued that the Assistant Commissioner in Bhavnagar-I had no jurisdiction to demand service tax for services provided in Balmer, Rajasthan, citing relevant case law. The Tribunal agreed, emphasizing that jurisdiction falls where the services are provided, as illustrated in the case of B. L. Mehta & Co. The demand of service tax was deemed without jurisdiction, leading to the setting aside of the impugned order.

Limitation and Willful Suppression:
The appellant contended that the show cause notice was time-barred and that the extended period was invoked erroneously, as there was no willful suppression of facts. Citing case law to support this argument, the appellant maintained a bona fide belief that his engagement was not subject to service tax, supported by evidence such as Employee ID Card and Health Insurance Card. The Tribunal did not delve into the limitation aspect but focused on the lack of jurisdiction in upholding the appeal.

Income Tax Data and Extended Period:
The Revenue argued that the income was reflected in Form 26AS under section 194J of the Income Tax Act, indicating fees for professional or technical services. The department discovered the services provided through data accessed from the Income Tax Department, justifying the invocation of the extended period. However, the Tribunal's decision primarily revolved around the jurisdictional challenge, leading to the setting aside of the service tax demand.

Conclusion:
The Tribunal, after considering the submissions and records, concluded that the demand of service tax lacked jurisdiction due to the location of service provision. Relying on precedents and the principle that jurisdiction aligns with service delivery, the impugned order was set aside, and the appeal was allowed with consequential relief as per law.