2014 (8) TMI 302 - AT - Service Tax

Business Auxiliary Service - Bar of limitation - Held that - Since 2004 a dispute was going on between the Revenue and the respondent as to whether the activity of providing place, seating arrangement to the finance institutions falls under the category of Business Auxiliary Service - As the classification of service tax is in dispute therefore the extended period of limitation is not invokable in this case. As in this case service tax for the period from July 2003 to September 2006 has been demanded by the department vide a show-cause notice dated 03.06.2008 by invoking extended period of limitation, the said show-cause notice is not sustainable being time barred. Therefore, no infirmity with the impugned order and the same is upheld - Decided against Revenue.

Summary

Issues:
1. Appeal against dropping demands as time-barred.
2. Invocation of extended period of limitation for service tax demand.
3. Classification of activity under Business Auxiliary Service.
4. Dispute regarding liability to pay service tax since 2004.

Analysis:
1. The appellant Revenue challenged an order dropping demands against the respondent, contending that the demands were time-barred. The respondent, engaged in sales and services of motor vehicles, provided infrastructure support services to finance institutions, receiving commission and incentives falling under Business Auxiliary Service. A show-cause notice in 2008 demanded service tax for July 2003 to September 2006, invoking extended limitation due to alleged suppression of facts. The adjudicating authority upheld the demand, penalties, and interest. The Commissioner (Appeals) later ruled against invoking extended limitation, leading to the Revenue's appeal.

2. The Revenue argued that the respondent concealed an agreement with finance institutions, receiving commission and brokerage, just revealed post-show-cause notice. Hence, the extended limitation should apply, requiring service tax payment under Business Auxiliary Service. Conversely, the respondent's counsel highlighted a dispute since 2004 on the activity's classification, reaching the Tribunal. The Commissioner's decision to not invoke extended limitation was supported, upholding the impugned order.

3. Notably, a longstanding dispute existed from 2004 between the Revenue and respondent regarding the activity's classification under Business Auxiliary Service. Given the ongoing classification issue and past Tribunal cases on the matter, the extended limitation was deemed inapplicable. The show-cause notice demanding service tax for 2003-2006, invoking extended limitation, was deemed time-barred, leading to upholding the impugned order and dismissing the Revenue's appeal. The respondent's Cross Objection was also disposed of accordingly.

This comprehensive analysis outlines the key legal issues, arguments presented by both sides, and the Tribunal's reasoning in reaching the decision to dismiss the Revenue's appeal and uphold the impugned order, emphasizing the inapplicability of extended limitation due to the ongoing dispute on service tax liability classification.