2024 (4) TMI 1094 - AT - Service Tax

Extended period of limitation - suppression of facts or not - Recovery of service tax - wrongful claiming of value of reimbursement (pure agent) - HELD THAT - The Order-in-Original is observed to be silent about these allegations/observations in the show cause notice though the extended period is held to be invocable. These allegations also have factual basis which need appreciation of the returns and other related documents. Hence it is not deemed appropriate to decide the plea of limitation without appreciation of the documentary evidence which has been produced by the appellant at this stage before the Tribunal. The said documents need to be appreciated by the original adjudicating authority itself. Both the parties otherwise have acknowledged consents for remanding back the matter. It is deemed proper that the original adjudicating authority shall decide the show cause notice afresh after giving the appropriate findings with respect to the allegations of suppression and misrepresentation and thus about the invocation of extended period of limitation. Appeal allowed by way of remand.

Summary

Issues involved:
The issues involved in this case are the wrongful claim of reimbursement, exemption, and abatement by the appellant, the demand of unpaid service tax amounting to Rs. 7,80,56,949/-, the invocation of extended period of limitation, and the confirmation of service tax demand of Rs. 1,55,90,415/-.

Wrongful Claim of Reimbursement, Exemption, and Abatement:
The appellant was engaged in providing various taxable services such as "Security Agency Service," "Manpower Recruitment Agency Service," and ATM Operations. The department alleged that the appellant wrongly claimed the value of reimbursement (pure agent), exemption, and abatement during the Financial Year 2010-11 to 2014-15. A demand was raised through a Show Cause Notice proposing the recovery of the amount along with interest and penalties under the Finance Act. The original adjudicating authority considered the appellant as a pure agent and dropped a major portion of the demand but confirmed a service tax demand of Rs. 1,55,90,415/-.

Invocation of Extended Period of Limitation:
The appellant argued that the show cause notice was barred by limitation as they were regularly filing service tax returns. The appellant contended that there was no suppression of facts as alleged by the department, especially since a previous investigation had been conducted for a similar period. The appellant requested time to produce additional documents to challenge the remaining confirmed demand.

Confirmation of Service Tax Demand:
The department claimed that there were differences between the service tax returns submitted by the appellant and those downloaded from ACES, indicating suppression. The department held that the extended period of five years was applicable due to these discrepancies. The department suggested remanding the matter back for proper appreciation of the documentary evidence provided by the appellant.

Decision:
The Tribunal observed that certain allegations in the show cause notice were not addressed in the Order-in-Original. Considering the factual basis of these allegations, the Tribunal deemed it necessary for the original adjudicating authority to re-examine the matter. The case was remanded for a fresh decision on the allegations of suppression, misrepresentation, the invocation of extended period of limitation, and the demand confirmed. Both appeals were allowed by way of remand for de novo adjudication.