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2025 (3) TMI 1033 - AT - Service TaxInvocation of extended period of limitation - Recovery of service tax with interest and penalty - suppression of value - Repair and Maintenance Service - HELD THAT - No explanation is coming forth for not declaring the said value appellant also do not dispute with regards to levibility of tax on merits. In the absence of any such explanation with regards to the differential taxable value intention to evade payment of service tax is quite clear and visible by suppressing the provisions of Section 73 (1) for invoking the provisions of extended period have been invoked for demanding this service tax. The fact that appellant was filing ST-3 return do not leave him from the responsibility to declare the correct value of taxable services provided. The mis-declaration has come to the knowledge only on the basis of information provided from Income Tax authorities for comparison with ST-3 returns. Conclusion - There are no merits in the submission made in the appeal that extended period should not have been invoked. The demand for service tax by invoking extended period is upheld. The demand by invoking the extended period upheld penalty imposed under Section 78 is also upheld - appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issue in this judgment revolves around the invocation of the extended period of limitation for the demand of service tax. The Tribunal had to consider whether the extended period of limitation was rightfully invoked under the circumstances where the appellant allegedly suppressed taxable service values in their returns. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The primary legal framework involves the Finance Act, 1994, specifically Section 73(1) concerning the invocation of the extended period of limitation for service tax demands. The Tribunal also referenced the self-assessment procedure under the Act, which mandates the correct declaration and payment of service tax by the assessee. Court's Interpretation and Reasoning The Tribunal considered the appellant's failure to appear for hearings and the lack of response to notices, which led to the decision being made on merits. The Tribunal noted that the appellant did not provide necessary documentation, such as balance sheets and ST-3 returns, despite multiple requests and summons from the department. Key Evidence and Findings The Tribunal relied on third-party information from the Income Tax Department, specifically the FORM 26AS, which revealed discrepancies between the income declared in the appellant's ST-3 returns and the actual income. The Tribunal found that the appellant had suppressed the gross value of taxable services during the period 2014-15 to 2016-17, leading to a significant shortfall in service tax payments. Application of Law to Facts The Tribunal applied the provisions of Section 73(1) of the Finance Act, 1994, to justify the invocation of the extended period of limitation. The Tribunal found that the appellant's actions constituted a clear case of suppression of facts with the intent to evade payment of service tax, thus validating the use of the extended period. Treatment of Competing Arguments The appellant argued that the extended period should not have been invoked, citing a previous show cause notice issued for a different period. However, the Tribunal found no merit in this argument, as the appellant failed to provide any explanation or evidence to counter the department's claims. The Tribunal emphasized that the appellant's non-compliance and lack of cooperation during the investigation supported the invocation of the extended period. Conclusions The Tribunal concluded that the extended period of limitation was rightfully invoked due to the appellant's suppression of taxable service values and non-compliance with statutory obligations. The Tribunal upheld the demand for service tax along with interest and penalties. SIGNIFICANT HOLDINGS Core Principles Established The Tribunal reinforced the principle that the extended period of limitation can be invoked when there is clear evidence of suppression of facts or intent to evade tax. The judgment emphasized the importance of accurate self-assessment and compliance with statutory requirements by taxpayers. Final Determinations on Each Issue The Tribunal dismissed the appeal, upholding the demand for service tax amounting to Rs. 11,46,212/- along with interest and penalties under various sections of the Finance Act, 1994. The Tribunal found no merit in the appellant's arguments against the invocation of the extended period of limitation and confirmed the penalties imposed by the adjudicating authority.
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