2017 (10) TMI 446 - AT - Service Tax

Validity of SCN - time limitation - suppression of facts - the original authority has not given the breakup of the amount confirmed under each category of services and therefore there is no quantification of each service by the department - Held that - The appellant / assessee has to be put to notice the amount confirmed under each category so that they are able to defend their case in appeal and also to help comply with the order - It has to be said that the entire details for raising the demand has been furnished by appellant. There is no specific fact/act of suppression brought out from records. Though there is general allegation of suppression in the SCN it is not supported by any evidence - appellant succeeds on the ground of limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability to discharge service tax on cargo handling services and Manpower Recruitment Services.
2. Inclusion of reimbursable expenses in the taxable value of services.
3. Application of Section 80 of the Finance Act, 1994.
4. Grounds for dropping penalties.
5. Quantification of service tax under each category.
6. Validity of demand raised invoking extended period.
7. Allegations of suppression of facts by the appellants.

Analysis:
1. The appellants, registered under various service categories, entered an agreement with Jet Airways for ground services. The department alleged liability for service tax on cargo handling services and underpaid tax on Manpower Recruitment Services due to excluding reimbursable expenses like bonus. A Show Cause Notice led to a demand of &8377; 15,22,508/- confirmed by the original authority, which dropped penalties citing Section 80 of the Finance Act, 1994. The Commissioner (Appeals) upheld this decision, prompting the appeal.

2. During the hearing, the appellant's counsel argued that the amount due pertained to reimbursable expenses for Manpower Recruitment Services, highlighting the lack of a detailed breakup in the Order-in-Original. Emphasizing the absence of quantification for each service category, the counsel contended the demand was time-barred due to legal doubts on tax levy, not fraud. The appellant had already paid for cargo handling services, further supporting their case.

3. The department's representative defended the original order, alleging the appellants suppressed facts, justifying the extended period demand. However, the tribunal noted the lack of specific evidence of suppression and the adjudicating authority's acknowledgment of no fraud in non-payment. Ultimately, the tribunal deemed the demand invoking the extended period as unsustainable, ruling in favor of the appellant on the ground of limitation.

4. The tribunal highlighted the importance of providing a detailed service tax breakup for each category to enable proper defense and compliance. Noting the appellant's cooperation in furnishing details and the absence of proven suppression, the tribunal concluded that the demand, based on the extended period, was unjustified. The appeal was allowed, providing consequential reliefs as necessary.