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2017 (10) TMI 1126 - AT - Service TaxBusiness Auxiliary Service - Right Concept Marketing (RCM) - levy of service tax - Extended period of limitation - Held that - there was ambiguity in interpretation of the statutory definition of Business Auxiliary Service, the demand for extended period of limitation cannot be sustained. Admittedly, there is no sustainable ground in this case like fraud, misstatement etc., on the part of the appellant for defrauding the Government Revenue. Since the period of dispute is from May, 2004 to March, 2007 and the SCN was issued on 14/05/2008, the same is clearly barred by limitation of time, having being issued beyond the normal period - demand set aside - appeal allowed - decided in favor of appellant.
Issues:
1. Appellant failed to register and pay service tax for providing Business Auxiliary Service. 2. Applicability of the limitation period for issuing Show Cause Notice (SCN). 3. Imposition of penalty under Section 78 for evasion of Service Tax. Analysis: 1. The appellant provided Business Auxiliary Service to a company under a marketing scheme. The Commissioner issued an Order-in-Appeal for non-payment of service tax amounting to ?13,32,302. The SCN proposed a demand of ?1,52,312 along with interest and penalty. 2. The appellant's advocate acknowledged that the services provided fell under the taxable category of Business Auxiliary Service. However, he argued that the SCN was issued beyond the one-year period from the relevant date. The Tribunal found that the demand for an extended period of limitation was not sustainable as there was no fraud or intent to evade payment. The SCN was issued on 14/05/2008, beyond the normal period, making it time-barred. 3. The Tribunal considered the ambiguity in interpreting the statutory definition of Business Auxiliary Service. Given the lack of fraud or misstatement by the appellant to defraud government revenue, the demand was not sustainable due to being issued beyond the limitation period. As a result, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The appellant was granted consequential relief as per the law. This judgment highlights the importance of adhering to the statutory limitation period for issuing SCNs and the necessity of establishing fraudulent intent for imposing penalties in cases of service tax evasion.
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