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2024 (3) TMI 281 - AT - Service TaxLevy of Service Tax - Declared service or not - collection of late delivery charges with respect to their finished goods, from the customers during the year 2012-13 2013-14 - act of collecting said charges amounts to the act of agreeing to obligation to refrain an act, or to tolerate an act or a situation, or to do an act which is covered under the definition of declared services introduced in section 66 (E) (e) of Finance Act, 1994 with effect from 01.07.2012 or not - Invocation of Extended period of limitation - suppression of facts or not - HELD THAT - Though appellant is also registered with Service Tax Commissionerate for rendering services as that of GTA and supply of manpower. Apparently and admittedly, none of these services are in question. It is further observe that the amount on which the demand in question has been confirmed is apparently and admittedly an amount in lieu of sale of finished goods manufactured by the appellant, that too, on the account of delay in receiving the payment from the buyers thereof. From no stretch of imagination, the said amount can be connected to be an amount towards rendering any service, not even the declared service. The amount is definitely an amount towards the sale of goods and shall be the part of value of the goods only these particular observations are sufficient to hold that findings in the order under challenge are without any reasonable basis. Invocation of extended period - Suppression of facts or not - HELD THAT - The case has been made out based upon the appellant s own record. It is not the case of the Department that the requisite returns where not filed by the appellant. In such circumstances, suppression or facts as is alleged in the Show Cause Notice is not sustainable. In addition to the decisions relied upon by the appellant, support drawn from the decision in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, HYDERABAD 1999 (10) TMI 123 - CEGAT, NEW DELHI where it was held that the date of knowledge by the department is not relevant according to the provisions of Section 11A and the notice issued beyond the period of six months from the date of knowledge will not be barred by limitation. In view thereof, proposing the impugned Show Cause Notice itself is held barred by limitation. As a consequence of entire above discussion, the order under challenge is hereby set aside - appeal allowed.
Issues involved:
The issues involved in the judgment are whether the late delivery charges collected by the appellant constitute declared services under the Finance Act, 1994, and whether the invocation of the extended period for issuing the Show Cause Notice is justified. Late Delivery Charges as Declared Services: The Department alleged that the appellant collecting late delivery charges from customers amounted to agreeing to obligations falling under declared services introduced in section 66 (E) (e) of the Finance Act, 1994. A Show Cause Notice was issued demanding service tax, interest, and penalties. The appellant contended that the charges were received after the sale of finished goods, in cases where payment was delayed, and thus should not be considered as payment for any service. The appellant also argued that even if it was considered a service, the charges were towards the sale of property and should be excluded under Rule 6 (2) (iv) of the service tax rules. The Tribunal found that the charges were related to the sale of goods and not for any service, setting aside the order under challenge. Invocation of Extended Period: The Department invoked the extended period of limitation for issuing the Show Cause Notice. The appellant argued that there was no suppression or misrepresentation on their part, and the case was based on their own documents. The Tribunal observed that the Department did not claim that the appellant had not filed the requisite returns, and therefore, suppression of facts was not sustainable. Relying on relevant legal decisions, the Tribunal held that the Show Cause Notice was barred by limitation. Consequently, the order under challenge was set aside, and the appeal was allowed. Separate Judgement: The judgment was delivered by Dr. Rachna Gupta, Member (Judicial), and Mrs. Hemambika R. Priya, Member (Technical).
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