2024 (5) TMI 860 - AT - Service Tax

Service or not - providing advisory/consultancy to M/s ACCSL and various other clients against receiving a commission from them - Business Auxiliary Service - intent to evade - Benefit of SSI exemption - extended period of limitation - penalty - HELD THAT - The admitted activity of the appellant in the present case is providing advisory/consultancy to M/s ACCSL and various other clients against receiving a commission from them. Section 66D does not cover this activity. It becomes clear that the service rendered by the appellant is taxable service. The Notification No. 7/2003-ST dated 20.06.2003 as brought to our notice introduced levy of service tax on the commission received. Seen from both these angles it stands clear on record that the appellant was liable to pay service tax on the amount of commission received during the impugned period (2014-2015 to 2017-2018). Benefit of SSI exemption - calculation of tax demand was objected by the appellant on the ground of benefit of N/N. 33/2012-ST dated 20.06.2012 granting SSI exemption, appropriate rate of service tax during the impugned period as the service tax rate has changed many times and eligibility of the appellant of cum tax benefit for calculation of proposed demands - HELD THAT - It is observed that three of these contentions have duly been considered by the original adjudicating authority itself and the demand is confirmed for Rs. 12,96,358/- instead of Rs. 16,10,317/- as was proposed. There are no infirmity in the said order on three of the above quoted pleas as were taken by the appellant. Extended period of limitation - HELD THAT - The show cause notice in the present case was served on 11.11.2019 covering the period from April 2014 to June 2017. The time limit for issuing the show cause notice during the relevant period was 13 months from the relevant dates (the date of filing of return for the period April 2014 to September 2014) i.e. 14.11.2014. The impugned show cause notice has been issued after 30 months from 14.11.2014. The reason quoted for invoking extended period is that the appellant has deliberately intentionally not paid the service tax in lieu of providing advisory services - Failure to get themselves registered despite the said notification is held to positive act of the appellant proving its intention to not to discharge its tax liability and to evade the same - it is observed that the said non-payment had come to the notice of the department only subsequent to the impugned investigation. Hence, the extended period has rightly been invoked by the department while issuing the impugned show cause notice. Penalty - HELD THAT - There are no infirmity when the penalty has been imposed on the appellant. The appeal is accordingly dismissed.

Summary

Issues Involved:
The appeal challenges the demand of service tax on commission received for providing advisory services to multiple parties, including M/s Adarsh Credit Cooperative Society Ltd., invoking the extended period of limitation and rejecting the SSI exemption claim.

Analysis of Judgment:

Issue 1: Taxability of Advisory Services
The appellant received commission for providing advisory services to various parties, including M/s ACCSL. The department alleged the activity falls within the definition of "service" u/s 65 B (44) of Finance Act, 1994, not covered under negative list u/s 66D or mega exemption Notification No. 25/2012-ST. The demand of Rs. 12,96,358/- was confirmed, considering the appellant's activity as a taxable service.

Issue 2: SSI Exemption Claim
The appellant claimed SSI exemption, arguing the amount received was below Rs. 10 lakhs. However, the adjudicating authorities rejected this claim, stating the appellant was liable to pay service tax on the commission received during the period in question.

Issue 3: Invocation of Extended Period
The department invoked the extended period of limitation, alleging the appellant intentionally avoided paying service tax despite Notification No. 7/2003-ST clarifying the taxability of received commissions. The extended period was upheld due to the appellant's failure to register and pay taxes, indicating an intention to evade tax liability.

Conclusion:
The Tribunal upheld the order-in-appeal, confirming the demand and penalty imposed on the appellant. The plea of ignorance or bonafide belief was rejected, and the extended period was deemed justified. The appeal was dismissed, sustaining the order under challenge.