2009 (10) TMI 169 - AT - Service Tax

Extended period of limitation- Trade Notice Nos. 47/CE (ST), dated 27-6-1997 and 53/CE(ST), dated 4-7-1997- The original authority had invoked longer period to confirm a demand against the assessee towards service tax on engineering consultancy service provided by it along with interest and penalty. The Commissioner (Appeals) found that as per Trade Notice Nos. 47/CE(ST), dated 27.6.1997 and 53/CE(ST), dated 4-7-1997 issued by the Commissioner of Central Excise, New Delhi, only the Commissioner could invoke longer period under section 73 of the Act. The notice issued by the Assistant Commissioner was not valid. The order of the original authority was silent on the assessee s challenge on the point of limitation. Relying on two decisions of the Tribunal, the Commissioner (Appeals) found that penalty imposed on the respondents was not justified and remand back the matter. Held that- commissioner had rightly remanded the matter to the original authority. Uphold the order of Commissioner (Appeals).

Issues:
1. Invocation of longer period for demand of service tax on Engineering Consultancy.
2. Validity of show-cause notices issued by Assistant Commissioner.
3. Imposition of penalty under section 76 of the Finance Act, 1994.
4. Interpretation of statutory provisions regarding service tax liability.
5. Remand of the matter for fresh adjudication by the Commissioner (Appeals).
6. Challenge on the point of limitation.
7. Authority to issue show-cause notices invoking section 73(a) of the Act.
8. Bona fide belief of the respondents regarding service tax liability.
9. Dispute involving interpretation of statutory provisions.
10. Grounds justifying invocation of longer period.

1. Invocation of Longer Period:
The Original Authority invoked a longer period to confirm a demand for service tax on Engineering Consultancy services provided by the respondent. The Commissioner (Appeals) vacated the original order, stating that only the Commissioner could invoke a longer period under section 73 of the Act. The notice issued by the Assistant Commissioner was deemed invalid as it did not specify grounds justifying the longer period. The Commissioner found that the penalty imposed on the respondent was not justified, considering the lack of clarity on the point of limitation.

2. Validity of Show-Cause Notices:
The Revenue argued that the Trade Notices relied upon by the lower appellate authority did not cover all services, and the Assistant Commissioner was competent to issue show-cause notices as per the Board's Circular. The impugned order was challenged as a non-speaking order for not justifying the invocation of a longer period. The Commissioner erred in accepting the respondent's bona fide belief as a valid defense, especially when they did not promptly address their tax liability.

3. Imposition of Penalty:
The Tribunal considered the Trade Notices and the issue of limitation raised by the respondents as valid. As the matter involved interpreting statutory provisions, the Commissioner held that no penalty should be imposed on the respondent. The impugned order was upheld, and the penalty was vacated based on the lack of clarity from the original authority on the limitation issue.

4. Interpretation of Statutory Provisions:
The Tribunal found that the Trade Notices clarified the authority to issue notices for service tax demand on specified services. The Commissioner rightly remanded the matter for fresh adjudication due to the original authority's oversight on the point of limitation and the Trade Notices' relevance. The issue of interpretation of statutory provisions played a crucial role in determining the penalty imposition.

5. Conclusion:
After carefully considering the case records and submissions, the Tribunal dismissed the Revenue's appeal. The Trade Notices, limitation issue, and lack of justification for invoking a longer period supported the Commissioner's decision to remand the matter. The cross-objection filed by the respondents opposing the appeal was deemed infructuous as the impugned order was sustained. Both the appeal and cross-objection were disposed of accordingly.

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