2005 (12) TMI 38 - AT - Service Tax

Service Tax SCN issued for demand of service tax for the period from July 1994 to March 1996 time barred Penalty leviable u/s 76 and 78 of Finance Act 1994 interpret by revenue as non-imposition of penalty though it can also be construed as non-interference with impugned order

Summary

Issues:
1. Consideration of time-barred demand in the impugned order
2. Inclusion of tax accrual for a specific month in the order
3. Silence on penalty imposable under Sections 76 and 78 by the Commissioner (Appeals)

Analysis:
1. The appeal was filed by the Revenue against the order-in-appeal passed by the Commissioner (Appeals), where the plea made by the respondents regarding the time-barred demand under Section 73(1)(a) was considered. The Commissioner (Appeals) modified the Order-in-Original by reflecting the period of demand. The calculation of demand included the month of April 1996, as the SCN was issued on 11-6-2001, and quarterly payments for the months between April to June are made in July under the Service Tax Law. Notably, the impugned order did not address the penalty imposed under the Order-in-Original.

2. The Departmental Representative raised concerns regarding the omission of tax accrual for the month of February 1996, which required payment by 12-4-96, in the Commissioner (Appeals) order. Additionally, there was a lack of mention about the penalty under Sections 76 and 78 in the impugned order. The absence of clarity on these aspects led to further scrutiny of the Commissioner (Appeals) decision.

3. Section 73(3) of the Finance Act, 1994 defines the "relevant date" for taxable services where service tax has not been levied or paid. In this case, the SCN was issued on 11-6-2001, leading the Commissioner (Appeals) to deem the demand for service tax from July 1994 to March 1996 as time-barred. The decision to include tax payable for the quarter April-June 1996, due in July 1996, was noted. The Revenue's interpretation of the silence on penalty imposition under Sections 76 and 78 as non-interference with the original order was upheld, resulting in the dismissal of the appeal.

This detailed analysis of the judgment showcases the considerations made regarding time-barred demands, tax accrual inclusion, and penalties under relevant sections, ultimately leading to the dismissal of the appeal by the Appellate Tribunal CESTAT, New Delhi.