2019 (6) TMI 1735 - AT - Service Tax

Non-payment of service tax - services to Indian Railways in the nature of Maintenance or Repair Service - Extended period of limitation - HELD THAT - The appellant was having a bonafide belief that since he was providing services to Indian Railways which is part of Government of India the services are not liable to be charged under the levy of service tax particularly in terms of Sl. No. 12 of Mega Notification No. 25 of 2012-ST dated 20.06.2012. Therefore the extended period of limitation was not available to revenue for raising the present demand. Since the extended period of limitation is not available the penalty under Section 78 of Finance Act 1994 was also not leviable to the appellant. After setting aside the penalty under Section 78 and setting aside the demand which is beyond the normal period of limitation the impugned order is set aside. Appeal allowed.

Summary

The Appellate Tribunal CESTAT ALLAHABAD, comprising HON'BLE SMT. ARCHANA WADHWA and HON'BLE MR. ANIL G. SHAKKARWAR, considered a case where the appellant provided maintenance or repair services to Indian Railways without paying service tax. The Tribunal found that the appellant had a genuine belief that services to the Government of India were not taxable under the relevant notification. As a result, the Tribunal held that the extended period of limitation did not apply, leading to the dismissal of the penalty under Section 78 of the Finance Act, 1994. Consequently, the Tribunal set aside the demand beyond the normal limitation period and allowed the appeal.