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2024 (5) TMI 201 - AT - Service TaxNon-payment of service tax - aviation services - failure to provide unit wise and year wise information in respect of amount received as aviation income by the appellant or by its other unit at Delhi and the service tax if any paid - territorial jurisdiction - time limitation - HELD THAT - The documents on record establish that the income shown in the returns as well as balance sheet is one amount under the head of aviation income but the activities performed are two separate activities. One is Supply of Tangible Goods by chartering the aircraft and another is dry leasing the aircrafts along with all its control and possession. The said activity of leasing out the aircraft with all rights of use therein to the lessee to our understanding is a deemed sale under Article 366 (29A) of the Constitution and thus is excluded from the charge of service tax under Section 65(105)(zzzzj) and Section 66B of the Act. Thus it becomes clear that the income earned by M/s. JSPL Delhi from dry leasing arrangements is not chargeable to service tax during the relevant period but value for this activity is included in the impugned amount. It was mandatory for the department as well as the adjudicating authority to take note of the bifurcation which was provided by the appellant at very initial stage of filing reply to the show cause notice and also the C.A. Certificate dated 10.03.2016 filed subsequently. Territorial Jurisdiction - HELD THAT - The commissionerate Raipur had no jurisdiction to issue the show cause notice demanding the tax for such service which was provided by the appellant s unit in Delhi. Time Limitation - Suppression of facts or not - HELD THAT - The tax on the amount receipts stands already discharged by M/s. JSPL Delhi. Thus it becomes crystal clear that the present is not at all a case of tax evasion. Appellant was regularly filing the returns is found to have maintained the proper documents. Question of alleged suppression does not at all arise. The extended period has wrongly been invoked. The entire period of demand gets hit by the bar of limitation. The order under challenge is hereby set aside. Appeal stands allowed.
Issues Involved:
1. Validity of the Show Cause Notice (SCN) 2. Bifurcation of Aviation Income 3. Jurisdiction of the Principal Commissioner, Raipur 4. Invocation of Extended Period for Demand Summary: 1. Validity of the Show Cause Notice (SCN): The appellant argued that the SCN was vague, as it demanded service tax from the Raigarh Unit based on the consolidated balance sheet, which included aviation income from the Delhi Unit. The Delhi Unit was separately registered and had discharged its service tax liability under "Supply of Tangible Goods" (STGU) u/s 65(105)(zzzzj) of the Finance Act, 1994. The appellant claimed that the SCN was based on presumption and ignored the bifurcation of income provided. 2. Bifurcation of Aviation Income:The appellant provided detailed bifurcation of aviation income, including ST-3 Returns and invoices for chartering services and dry leasing agreements. The adjudicating authority ignored these documents, leading to the confirmation of the demand. The Tribunal found that the income included amounts from both chartering services and dry leasing, the latter being a deemed sale u/s Article 366(29A) of the Constitution, thus outside the service tax net. 3. Jurisdiction of the Principal Commissioner, Raipur:The Tribunal observed that the Principal Commissioner, Raipur, lacked jurisdiction to issue the SCN for income received by the Delhi Unit. The Tribunal cited the case of Commissioner of Central Excise, Jaipur-I Vs. Tahal Consulting Engineers Ltd., holding that the Raipur Commissionerate had no jurisdiction over services rendered by the Delhi Unit. The order was set aside on this ground. 4. Invocation of Extended Period for Demand:The SCN, issued in October 2015, covered the period from April 2010 to March 2013. The Tribunal held that the appellant had regularly filed returns and maintained proper documents, proving that the amount in question was received by the Delhi Unit. Since the tax was already discharged by the Delhi Unit, there was no case of tax evasion or suppression. The invocation of the extended period was deemed incorrect, and the demand was barred by limitation. Conclusion:The Tribunal set aside the order under challenge, allowing the appeal. The order was pronounced in the open court on 03.05.2024.
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