2018 (8) TMI 98 - AT - Service Tax

Renting of Immovable Property Service - Held that - There is no dispute about the factual position that all the three appellants starting discharging their service tax liability under the category of Renting of Immovable Property , with effect from 01/06/2007, after getting themselves registered with the department. No objection was ever raised by the Revenue at the time of registration or at any time thereafter. Extended period of limitation - Held that - The extended period is invocable only when there are positive evidences of any suppression or mis-statement, with intent to evade payment of duty. In the absence of the same, the demands raised beyond the normal period are liable to be stuck down as barred by limitation - Inasmuch as the entire facts were known to the Revenue, there is no justification for invoking the extended period and inasmuch as the entire demand is beyond the normal period of limitation. Appeal allowed - decided in favor of appellant.

Issues:
1. Dispute over service tax liability for different activities.
2. Invocation of extended period of limitation for demands.
3. Allegations of suppression of facts and intent to evade tax.

Issue 1: Dispute over service tax liability for different activities

The case involved three appeals arising from the same impugned order passed by the Commissioner, where the appellants were providing services from different locations. The services included renting of premises and providing furniture and infrastructure facilities. Initially, the appellants considered the services under "Business Support Services" and paid service tax accordingly. However, after a change in the statute, they started discharging their service tax liability under the category of "Renting of Immovable Property." The Revenue raised a show cause notice alleging that prior to the statutory change, the services provided should have been categorized under "Business Support Services," leading to demands against the appellants. The Commissioner confirmed the demands, interest, and penalties, which were challenged in the appeals.

Issue 2: Invocation of extended period of limitation for demands

The main contention revolved around the invocation of the extended period of limitation for raising demands. The Revenue justified the extended period by alleging that the appellants had suppressed facts and intent to evade tax. The Adjudicating Authority observed that the appellants had filed ST-3 returns reflecting the gross value during the relevant period, which was considered as suppression of facts. However, the Tribunal found no merit in this observation. It was noted that the appellants had registered for all services under the correct category after the statutory change and had been paying service tax accordingly. The Tribunal concluded that there was no suppression on the part of the appellants and that the Revenue was aware of their activities post the statutory change. Therefore, the Tribunal held that the extended period was unjustified, and the demands raised beyond the normal period were barred by limitation, leading to the setting aside of the impugned order.

Issue 3: Allegations of suppression of facts and intent to evade tax

The Commissioner had alleged that the appellants failed to discharge their statutory liabilities, deposit due tax on time, file prescribed Service Tax Returns properly, and misled the department by providing covert information. The Commissioner imposed penalties under Section 78 of the Finance Act, 1994, citing intentional short payment/non-payment of service tax. However, the Tribunal disagreed with this assessment. It emphasized that the Revenue was aware of the appellants' activities post the statutory change and that there was no evidence of suppression or misstatement with intent to evade payment of duty. The Tribunal concluded that the demands raised based on allegations of suppression and misstatement were unjustified, and the impugned order was set aside on this ground.

In conclusion, the Tribunal allowed all three appeals, setting aside the demands, interest, and penalties imposed by the Commissioner. The decision was based on the lack of evidence supporting the allegations of suppression and misstatement, leading to the rejection of the invocation of the extended period of limitation for demands.

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