2018 (3) TMI 1009 - AT - Service Tax

Business Auxiliary Service - reverse charge mechanism - demand on the premise that the appellant did not get registered themselves under the Business Auxiliary Service by issuance of the show cause notice dated 24.04.2009 by invoking extended period of limitation - Held that - the Hon ble High Court observed in the case of Indian National Shipowners Association V. Union of India 2008 (12) TMI 41 - BOMBAY HIGH COURT , that the extended period of limitation is not invokable. As the extended period of limitation is not invokable, no penalty is imposable on the appellant. Appeal disposed off.

Summary

Issues:
Appeal against demand of service tax under Business Auxiliary Service under reverse charge mechanism for the period April 2006 to March 2008; Invoking extended period of limitation for non-registration under Business Auxiliary Service.

Analysis:
The appellant contested the demand of service tax under Business Auxiliary Service under reverse charge mechanism for the period April 2006 to March 2008, arguing against the invokement of the extended period of limitation due to non-registration under the said service. The appellant appointed a foreign agent for selling goods on commission basis, triggering the service tax liability. The show cause notice was issued in 2009, and the matter was adjudicated based on precedents. The adjudicating authority confirmed the demand for the period post 18.04.2006, citing the absence of provisions for recovery pre-18.04.2006. The appellant challenged the extended period of limitation, relying on legal precedents such as the Indian National Shipowners Association case. The appellant argued that the extended period should not apply, thus penalty should not be imposed.

The appellant's counsel referenced the Indian National Shipowners Association case, where it was held that the extended period of limitation is not applicable in certain scenarios. The appellant sought relief based on this interpretation, supported by decisions from the Tribunal in other cases. Conversely, the respondent cited precedents to assert that the extended period of limitation could be invoked due to the appellant's failure to declare commission payments in their returns. After hearing both parties, the Tribunal delved into the Indian National Shipowners Association case, emphasizing that the extended period of limitation was not applicable under Section 66A of the Finance Act, 1994. Consequently, the Tribunal ruled in favor of the appellant, setting aside the demand and penalty due to the non-invokement of the extended period of limitation. The decision was based on the interpretation of the law and the precedents cited, ultimately leading to the disposal of the appeal in the appellant's favor.