2010 (6) TMI 32 - AT - Service Tax

Tour operator service- Extended period of limitation- Demand of service tax has been confirmed for the period 1.4.2000 to 30.4.2001 on tour operator s service together with interest. In addition penalties have been imposed under Sections 76 and 77 of the Finance Act 1994. Held that- in the light of the various decisions set aside the demand on this ground alone and allow the appeal.

Summary

Issues:
1. Confirmation of demand of service tax for the period 1.4.2000 to 30.4.2001 on tour operator's service.
2. Imposition of penalties under Sections 76 and 77 of the Finance Act, 1994.

Analysis:
1. The judgment addresses the confirmation of demand of service tax for the period 1.4.2000 to 30.4.2001 on tour operator's service along with interest. The issue revolved around the application of the extended period of limitation due to the absence of suppression in Section 73 of the Finance Act, 1994 during the disputed period. The law was amended on 10.9.2004 to include suppression as a requirement for invoking the longer limitation period, effective from 28.3.2005. The appellants argued that the law applicable is that which existed at the time of issuing the show-cause notice on 3.10.2005, thus necessitating the allegation and proof of suppression before confirming the demand beyond the normal limitation period. The judgment relied on precedents like Mahakoshal Beverages Pvt. Ltd. Vs. CCE, Belgaum, 2007 (6) STR 148 and Atma Steels Pvt. Ltd., 1984 (17) ELT 331, to support the appellants' stance. Consequently, the demand was set aside based on the absence of suppression during the disputed period, leading to the allowance of the appeal.

2. The second issue pertains to the imposition of penalties under Sections 76 and 77 of the Finance Act, 1994. However, the judgment primarily focused on the absence of suppression during the disputed period in relation to the demand of service tax. As the demand itself was set aside due to this reason, the penalties imposed under Sections 76 and 77 were not discussed explicitly in the judgment. Therefore, the decision to set aside the demand on the grounds of lack of suppression also indirectly impacted the penalties imposed under the aforementioned sections. The judgment did not delve into a separate analysis of the penalties but rather resolved the matter based on the primary issue of demand confirmation.