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2025 (2) TMI 558 - AT - Service TaxLiability to pay service tax - rent-a-cab scheme operator s service - tour operator s service - business auxiliary service - abatement under N/N. 01/2006-S.T. for rent-a-cab services and N/N. 38/2007-S.T. for tour operator services - extended period of limitation - penalties u/s 78 and Sections 77(1)(a) and 77(2) of the Finance Act 1994. Abatement under N/N. 01/2006-S.T. for rent-a-cab services and N/N. 38/2007-S.T. for tour operator services - HELD THAT - The appellant submits that rightly paid service tax on the liability payable by them and differential Service Tax liability confirmed in the impugned order is on account of not allowing the abatement provided under N/N. 01/2006-S.T. dated 01.03.2006. The appellant claims that they are eligible for the abatement which has not been extended to them by the ld. adjudicating authority. However it is found that the ld. adjudicating authority has observed that the appellant has raised the bill for Service Tax on the gross amount without availing any abatement. It is found that the appellant has not disputed this finding of the Ld. adjudicating authority. It is also found that the appellant has also not produced any evidence to substantiate their claim of eligibility for the abatement. Extended period of limitation - HELD THAT - The appellant has been registered with the Service Tax Department and had been paying Service Tax regularly and also filing returns. Thus the demand of Service Tax short paid if any should have been raised within the normal period of limitation as there is no suppression of facts with intention to evade payment established in this case. It is held that the extended period of limitation cannot be invoked to demand Service Tax in this case. Accordingly the demand of Service Tax by invoking the extended period of limitation is not sustainable. Penalty under Section 78 of the Finance Act 1994 - HELD THAT - Penalty under Section 78 of the Finance Act 1994 is not imposable on the appellant. Consequently the penalty imposed under Section 78 of the Act is set aside. Penalties imposed under Section 77(1)(a) and Section 77(2) of the Finance Act 1994 - HELD THAT - The appellant has not made any submission for non-imposition of penalties under these sections. We find that the appellant has not registered for rendering service under the category of tour operator s service and business auxiliary service . Thus the penalties under Sections 77(1)(a) and Section 77(2) of the Finance Act 1994 has been rightly imposed. Accordingly the penalties imposed under these sections upheld. Conclusion - i) The demands for Service Tax under the categories of rent-a-cab scheme operator s service tour operator s service and business auxiliary service are not sustainable for the extended period of limitation due to lack of evidence of suppression or intent to evade tax. ii) The appellant is liable to pay Service Tax for the normal period of limitation along with interest. iii) The penalty under Section 78 of the Finance Act 1994 is not imposable while penalties under Sections 77(1)(a) and 77(2) are upheld. Appeal disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Service Tax Liability and Abatement Claims: The appellant was registered under the 'rent-a-cab scheme operator's service' and had been paying Service Tax. However, the Revenue demanded additional Service Tax based on the appellant's financial records, which included income from car hiring charges, fuel income, overtime charges, and parking fees. The appellant argued that these were not taxable and claimed abatement under Notification No. 01/2006-S.T. The Court found that the appellant failed to provide evidence to support their claim for abatement, as they had invoiced Service Tax on the gross amount without availing any abatement. For the 'tour operator's service', the appellant accepted a short-paid Service Tax liability after considering a 75% abatement under Notification No. 38/2007-S.T. The Court upheld this calculation as the appellant did not contest it on merits. Regarding 'business auxiliary service', the appellant accepted the demand calculated by considering the gross amount as cum tax value. The Court upheld this as the appellant did not contest it on merits. Limitation Period: The appellant contested the demands primarily on the grounds of limitation, arguing that the data from their financial statements alone should not automatically determine tax liability. They contended that the extended period of limitation was invoked without evidence of suppression of facts or intent to evade tax. The Court agreed, noting that the appellant had been regularly filing returns and paying taxes, and thus, the extended period of limitation was not applicable. Consequently, the Court restricted the demands to the normal period of limitation. Penalties: The Court set aside the penalty under Section 78, as there was no evidence of intentional suppression or evasion. However, penalties under Sections 77(1)(a) and 77(2) were upheld due to the appellant's failure to register for services under the categories of 'tour operator's service' and 'business auxiliary service'. SIGNIFICANT HOLDINGS The Court held that:
The appeal was disposed of with these determinations, emphasizing the need for precise evidence and adherence to statutory limitations in tax demands.
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