2009 (8) TMI 164 - AT - Service Tax

Invocation of extended period - The issue involved is as to whether the commission received by the appellant from the air-lines for providing of services as air cargo agent would attract the service tax under the category of Business Auxiliary Services. Apart from contesting the demand on merit, the learned advocate has also assailed the impugned order on the point of limitation. No suppression, mis-statement of facts with an intent to evade duty or any fraud, collusion etc. is being attributed to the appellant by the Commissioner (Appeals). Having accepted that there was a lack of clarity and doubt about the appellant s liability to pay service tax, we are, prima facie, of the view that the benefit of extended period is required to be extended to the appellant, in which case, the demand would be barred by limitation.- stay granted

Summary

The judgment by the Appellate Tribunal CESTAT, Ahmedabad, Citation: 2009 (8) TMI 164 - CESTAT, Ahmedabad, was delivered by Ms. Archana Wadhwa, Member (J), and Shri B.S.V. Murthy, Member (T). The issue at hand was whether the commission received by the appellant from airlines for providing services as an air cargo agent would attract service tax under Business Auxiliary Services. The demand was contested on both merit and the point of limitation, with the demand period being 1-7-03 to 15-6-05. The Commissioner (Appe 9-6-05). The Commissioner (Appeals) noted that the appellants had paid a significant portion of the duty and interest before the show cause notice was issued and that they had made sincere efforts to understand the applicability of the service tax. The Commissioner (Appeals) observed that the issue was not free from doubt and that the appellants had bona fide doubts, which constituted a reasonable cause for their failure to pay the tax.

The appellate authority found that there was no malice on the part of the assessee and that the issue was not free from doubt, leading to the clarification by the Hon'ble Bombay High Court that the extended period could not be invoked against the appellant. The learned JDR pointed out that the extended period had been invoked in the impugned order, but the tribunal found that the grounds cited by the Commissioner (Appeals) were not valid for invoking the extended period. The tribunal noted that there was a lack of clarity on the issue, and no suppression, misstatement of facts, intent to evade duty, or fraud was attributed to the appellant. Given the lack of clarity and doubt about the appellant's liability to pay service tax, the tribunal was of the view that the benefit of the extended period should be extended to the appellant, thereby rendering the demand barred by limitation.

Considering the amount already deposited by the appellants, the tribunal dispensed with the condition of pre-deposit of the balance amount of duty and allowed the stay petition accordingly. The judgment was dictated and pronounced in court.