2024 (11) TMI 1048 - AT - Service Tax

Invoking extended period of limitation - Non discharge of service tax on the legal expenses incurred under the reverse charge mechanism - Appellant failed to register themselves under the Service tax since they are providing taxable service namely renting of Samudhaya Bhavana and also towards renting of shops for business purposes - HELD THAT - As considering the communication made by Assistant Commissioner of Central Excise confirming that the Appellant is not liable for payment of service tax and in the absence of any allegation regarding any other service provided by appellant and without any amendment of relevant provision of law, no finding can be made that the Appellant who had registered under the Societies Act and filing income tax return regularly had suppressed the facts regarding service provided by them. Since the entire demand is made by invoking the extended period of limitation and no demand is falling under normal period, the demand is barred by limitation. Appeal allowed.

Summary

Issues:
1. Liability of service tax on renting of premises and legal expenses.
2. Challenge against demand on renting of tangible goods and immovable property.
3. Application of extended period of limitation.
4. Exemption under Mega Exemption Notification No. 25/2012.
5. Imposition of penalty.

Analysis:

1. The Appellant, registered under the Karnataka Societies Registration Act, 1960, failed to register for service tax despite providing taxable services. A show cause notice was issued for the period from 2014-2015 to 2017-2018. The Adjudicating authority confirmed part of the demand on renting of tangible goods and immovable property, imposing penalties. The Commissioner (Appeals) upheld the decision. The Appellant challenged the demand, arguing against the extended period of limitation.

2. The Appellant's counsel cited past judgments to support the argument that there was no suppression of facts to evade tax. The counsel highlighted the exemption under Notification No. 25/2012 for bundled services provided by the Appellant. The counsel also referenced a High Court judgment supporting the exemption of rent received in connection with educational services.

3. The Appellant's counsel also contested the demand for service tax on rent, stating that the premises were used for public religious ceremonies and thus exempt from service tax under relevant notifications. The Authorized Representative argued that services provided by the Appellant, such as commission and renting of shops, were taxable and not covered by exemptions.

4. The Authorized Representative relied on various judgments to support the contention that the demand was not barred by limitation. Citing a specific case, the representative argued that the Appellant had not disclosed relevant facts to the department, indicating an intent to evade tax. The Tribunal held that the demand was barred by limitation as no suppression of facts was established.

5. Ultimately, the Tribunal allowed the appeal, finding that the demand was barred by limitation due to the Appellant's registration status, regular tax filings, and lack of suppression of facts. The decision was pronounced on 21.11.2024, in favor of the Appellant.