2015 (5) TMI 806 - AT - Service Tax

Demand of service tax - Invocation of extended period of limitation - Held that - Revenue has not filed any appeal against the impugned Order-in-Appeal for dropping the penalty under Section 78 ibid. The period involved in this case is October, 2002 to December, 2006 while the Show Cause Notice was issued on 23.02.2008. It is thus obvious that the entire demand is beyond normal period of one year (except for a period of mere three months i.e. October, 2006 to December, 2006 and that too only if the Show Cause Notice dated 23.02.2008 was actually received by the appellants on or before 25.02.2008) and therefore is hit by time bar in view of the analysis above. When the entire demand covering the period October, 2002 to December, 2006 is a meagre ₹ 19,576/- the demand for a mere 3 months will be pittance or less making it ridiculous to remand the case for computation thereof in view of the paper and effort involved as a consequence of so doing particularly when it does not involve any question of law or interpretation thereof. - Decided in favour of assessee.

Summary

Issues:
1. Imposition of penalty under Section 78 of the Finance Act, 1994.
2. Conditions for invoking the extended period under Section 73 of the Finance Act, 1994.

Analysis:
1. The judgment pertains to a Stay Application and Appeal filed against an Order-in-Appeal that upheld a service tax demand, but set aside the penalty under Section 78 of the Finance Act, 1994. The Commissioner (Appeals) noted that the issue of penalty imposition was of interpretational nature, citing precedents like M/s. Uniflex Cables Ltd. Vs. CCE Surat-II and Asian Tubes Ltd. Vs. CCE Ahmadabad. Consequently, the Commissioner waived the penalties imposed under Section 78, and the appeal was partially allowed. The decision was based on the interpretation of the law and the lack of justification for penalty imposition in such cases.

2. The judgment also delves into the conditions for invoking the extended period under Section 73 of the Finance Act, 1994, which are similar to those for liability to penalty under Section 78. The Commissioner found that the criteria for imposing mandatory penalty under Section 78 were not met in this case. As a result, it was concluded that the extended period under proviso to Section 73(i) would not be applicable. The Revenue did not challenge the dropping of the penalty under Section 78. The demand period from October 2002 to December 2006 was mostly time-barred, except for a three-month period, making the demand of a mere &8377; 19,576 seem trivial. Consequently, the tribunal dispensed with the pre-deposit and allowed the appeal, considering the impracticality of remanding the case for computation due to the insignificant amount involved and the absence of legal complexities.