2024 (5) TMI 198 - AT - Service Tax

Classification of services - cargo handing service or business auxiliary service - extended period of limitation - suppression of facts or not - HELD THAT - It is found that initially, a SCN was issued to the appellant for the very same activity, to re-classify their service under the category of cargo handling service , which was dropped by the Hon ble High Court. Later on, the Revenue sought to classify the said activity under the category of business auxiliary service by way of the impugned Show Cause Notice by invoking the extended period of limitation. Since the Revenue itself is in confusion as to whether the activity undertaken by the appellant falls under cargo handling service or business auxiliary service, in these circumstances, the extended period of limitation is not invokable and the charge of suppression cannot be alleged against the appellant. The whole of the demand against the appellant is barred by limitation. Accordingly, the impugned proceedings are set aside - appeal allowed.

Summary

Issues involved: Demand confirmed under "business auxiliary service" invoking extended period of limitation, confusion regarding classification of activity under "cargo handling service" or "business auxiliary service", applicability of extended period of limitation, defense based on previous case law.

The appellant appealed against the demand confirmed under "business auxiliary service" invoking the extended period of limitation for the period from 01st October, 2006 to 31st August, 2010, with the Show Cause Notice issued on 17th April, 2012. The appellant had previously faced a Show Cause Notice for the same activity under "cargo handling service," which was dropped due to limitation issues. The current Show Cause Notice sought to reclassify the activity under "business auxiliary service," again invoking the extended period of limitation. The appellant argued that the confusion between the two classifications rendered the extended period of limitation inapplicable, citing the defense based on the decision in the case of Nizam Sugar Factory v. Collector of Central Excise, A.P. The appellant prayed for setting aside the impugned order based on this argument and relevant case law.

The Tribunal considered the submissions and noted the previous Show Cause Notice for the same activity under "cargo handling service," which was dropped. The Revenue attempted to classify the activity under "business auxiliary service" in the current proceedings, invoking the extended period of limitation. Given the confusion regarding the classification of the activity, the Tribunal held that the extended period of limitation was not applicable, and suppression could not be alleged against the appellant. Relying on the decision in the case of Nizam Sugar Factory and Ganesh Trading Company, the Tribunal concluded that the demand against the appellant was barred by limitation. Consequently, the impugned proceedings were set aside, and the appeal was allowed with any consequential relief.