2015 (12) TMI 1449 - AT - Service Tax

Business Auxiliary Service - Invocation of extended period of limitation - commission received by the respondent from BSNL for the sale of SIM cards - Held that - in the case of Prakash R. Jaiswal (2015 (12) TMI 680 - CESTAT MUMBAI), it was held that, invocation of extended period in this case seems to be incorrect as the issue was being agitated before the judicial forum. Accordingly, we hold that the show-cause notice which invokes the extended period for demand of service tax from the appellant-assessee needs to be set aside and we do so. However, for the demand within the period of limitation from the date of issuance of show-cause notice we hold that the appellant-assessee is liable to pay the service tax liability along with interest. In the present case, service tax arises within the limitation period and the respondent-assessee is liable to pay the service tax along with interest. - Decided partly in favor of assessee.

Summary

Issues:
1. Service tax liability on commission received for sale of SIM cards.
2. Invocation of extended period for demand of service tax.
3. Applicability of Business Auxiliary Service.
4. Penalty imposition on the appellant-assessee.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal setting aside the demand confirmed by the adjudicating authority regarding service tax liability on the commission received by the respondent from BSNL for the sale of SIM cards. The issue was for the period October 2004 to September 2009. The adjudicating authority held it falls under "Business Auxiliary Service," but the first appellate authority set aside the demands.

2. The Tribunal noted that a similar issue had been decided previously by the Bench in another case. The Tribunal held that the service tax liability arises within the limitation period. The show-cause notice invoking the extended period for demand of service tax was considered incorrect as the issue was already being debated in judicial forums. The Tribunal concluded that the appellant-assessee is liable to pay the service tax within the period of limitation from the date of the show-cause notice.

3. The Tribunal referred to a previous case involving service tax liability on BSNL recharge coupons. It was highlighted that conflicting views existed in various judicial forums regarding the issue. The Tribunal held that the appellant-assessee could have had a bonafide belief that they were not liable to discharge the service tax liability, considering the conflicting decisions by the Tribunal. However, the Tribunal concluded that the appellant-assessee is liable to pay the service tax along with interest.

4. Regarding the penalty imposed on the appellant-assessee, the Tribunal considered that due to the conflicting decisions and the bonafide belief the appellant could have held, penalties may not be justified. The Tribunal decided that the appellant-assessee should pay the service tax liability along with interest but may not be subjected to penalties. The appeal was disposed of accordingly based on the above analysis and conclusions reached.