2018 (4) TMI 477 - AT - Service Tax

C&F agency service - Non-payment of service tax - whether the appellant had in an agreement with one M/s Sudhakar Plastics Ltd. agreed to be as a consignment agent for the goods manufactured by them, evaded service tax on services rendered by appellant during the period 2002-2003 to 2003-2004 or otherwise? - extended period of limitation. Held that - SCN does not invoke the proviso Section 73(1) for demand of tax for the extended period, and there is no allegation of suppression of the facts, mis-statement facts; in the absence of any allegation of suppression of facts or mis-statement, the service tax demand for the normal period can only be sustainable, demand for extended period is unsustainable. The service tax demand on the C&F agency services for the normal period from the date of issuance of Show Cause Notice i.e. 26 09.2006 is maintainable along with the interest and also the consequent penalty - appeal allowed in part.

Summary

Issues:
1. Whether the appellant evaded service tax on services rendered as a consignment agent.
2. Whether the demand for service tax beyond the limitation period is sustainable.
3. Imposition of penalty under specific sections of the Finance Act.

Analysis:
1. The appellant was alleged to have evaded service tax on services rendered as a consignment agent for M/s Sudhakar Plastics Ltd. The revenue authorities directed the appellant to pay the tax through a Show Cause Notice. The adjudicating authority confirmed the demands raised and imposed penalties. The First Appellate Authority rejected the appeal. The Tribunal found that the tax liability on the appellant for C&F agency services to M/s. Sudhakar Plastics Ltd. was established.

2. The appellant contested the issue only for the period beyond the limitation. The Tribunal noted that the Show Cause Notice did not invoke the proviso of Section 73(1) for the demand of service tax beyond the limitation period. As there was no allegation of suppression of facts or misstatement, the demand for the extended period was deemed unsustainable. The Show Cause Notice also sought imposition of penalty only under specific sections of the Finance Act, further supporting the decision to set aside the demand for the period beyond the normal period.

3. The Tribunal held that the service tax demand for the normal period from the date of the Show Cause Notice was maintainable, along with interest and penalty. However, the demand for the period beyond the normal period was set aside, along with the consequent interest and penalty. The appeal was disposed of accordingly, clarifying the tax liabilities and penalties applicable based on the specific provisions invoked in the Show Cause Notice.