2024 (2) TMI 1083 - AT - Service Tax

Invocation of extended period of limitation - wilful misstatement and suppression of facts etc. with intent to evade payment of tax - Management Consultancy service - HELD THAT - This issue for the earlier period has been examined in detail by this Tribunal in M/S. VERVE CONSULTING PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, BHUBANESWAR-I 2023 (8) TMI 50 - CESTAT KOLKATA where it was held that Services rendered in the nature of software development provided by the Appellant was exempted from payment of Service tax in terms of Notification No. 16/2004-ST dated September 10, 2004. Thus, no service tax is payable by the appellant. Further it is found that the activity of the appellant was well known to the Revenue and both the show-cause notices in question have been issued to the appellant by invoking extended period of limitation - the whole of the demand is barred by limitation. The impugned order is set aside - appeal allowed.

Summary

Issues involved: The judgment involves issues related to service tax liability, wilful misstatement, suppression of facts, extended period of limitation, interest, and penalties under the Finance Act, 1994.

Issue 1 - Service Tax Liability and Extended Period of Limitation:
The appellant, engaged in providing management consulting services, faced allegations of wilful misstatement and suppression of facts to evade tax. The demand was confirmed based on audit objections and discrepancies in ST-3 returns. The appellant contended that the demand was not sustainable due to the absence of evidence supporting the tax liability. The Tribunal analyzed previous cases and held that the services provided did not fall under taxable categories. It was noted that the demand was unjustified, and the service tax liability was deemed non-existent.

Issue 2 - Application of Extended Period of Limitation:
The impugned orders invoked the extended period of limitation due to alleged non-disclosure of gross receipts in ST-3 returns. The appellant argued against the sustainability of the orders, citing legal precedents and lack of evidence supporting the tax liability. The Tribunal found that the demand was time-barred and not maintainable under the extended period of limitation. Consequently, the impugned orders were set aside, and the appeal was allowed with any necessary consequential relief.