2024 (6) TMI 45 - AT - Service Tax

Telecommunication services - Service tax - Short paid amount of discounts to PCOs - applicability of the extended period for raising demands​​​​​​​ - Penalty - Whether the discounts given to Public Call Offices (PCOs) is to be included in the taxable value for payment of service tax - BSNL paid service tax on gross call charges inclusive of the commission paid to PCO operator - HELD THAT - The issue stands covered by the decision of the Tribunal in the appellant s own case 2018 (3) TMI 1007 - CESTAT CHENNAI . Following the above decision, we are of the view that the demand cannot sustain. The issue is answered in favour of the appellant. Limitation - Being a Public Sector undertaking, there cannot be any malafide intention on the part of the appellant to suppress the facts with intent to evade payment of service tax. The Department has not established any positive act of suppression on the part of the appellant. Taking note of these facts, we are of the view that the demand raised invoking extended period cannot sustain. We hold that the Show Cause Notice is time barred. The issue on limitation is also answered in favour of the assessee. In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs, if any , as per law.

Summary

Issues involved: Interpretation of taxable value for service tax on discounts given to PCOs and the applicability of the extended period for raising demands.

Interpretation of taxable value for service tax on discounts given to PCOs:
The appellant, a service provider registered with the Service Tax Department, was audited and found to have not paid service tax on total charges collected from subscribers for taxable services. The issue revolved around whether the discounts given to PCOs should be included in the taxable value for service tax payment. The appellant argued that a previous Tribunal decision favored their stance, citing the case of Bharti Infotel Ltd. The Tribunal referred to Notification No.2/2011-ST, which clarified the determination of taxable value for specified services. Relying on this, the Tribunal ruled in favor of the appellant, stating that the demand for service tax could not be sustained.

Applicability of the extended period for raising demands:
The appellant contended that as a public sector undertaking, there was no intention to evade service tax, invoking the case of Indian Oil Corporation Vs. Commissioner Central Excise, Ahmedabad. The Tribunal agreed, noting that the Department failed to establish any act of suppression by the appellant. Consequently, the Tribunal held that the Show Cause Notice was time-barred, and the issue of limitation was also decided in favor of the appellant. As a result, the impugned order was set aside, and the appeal was allowed with any consequential reliefs as per law.