2018 (8) TMI 479 - AT - Service Tax

Collection of Service tax made but failure to deposit to Exchequer - Security agency service - demand invoking extended period of limitation - no suppression of facts - Held that - There is no doubt that citing of the wrong provision will not, of itself, vitiate the demand. However, with a clear finding that the ingredients for invoking the extended period does not exist, the scope for recovery fails. The claim of the respondent that they are not engaged in the business of providing security agency service merely because they are registered under relevant labour law does not stand the test of law to exclude them from tax liability and as the impugned order has examined the scope of services and scope of contract in detail, demand does not sustain owing to bar of limitation. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Taxability of services provided by the respondent as a security agency
- Adequacy of scrutiny by the appellate authority
- Application of the bar of limitation
- Evidence of suppression for demand sustainability
- Recovery under appropriate provisions of the Finance Act, 1994
- Validity of citing wrong provisions
- Scope for recovery in the absence of extended period ingredients
- Relevance of case laws in the given circumstances
- Exclusion from tax liability based on registration under labor law

Analysis:
The judgment revolves around the taxability of services provided by the respondent as a security agency. The Central Excise authorities sought to tax the consideration received by the respondent for providing security services. The original authority confirmed a demand, upheld by the first appellate authority due to the failure to deposit the service tax with the exchequer. Upon appeal before the Tribunal, it was observed that the first appellate authority did not adequately scrutinize the activity to determine if it falls under the category of 'security agency service,' and also failed to address the issue of the bar of limitation.

In the subsequent remand proceedings, the Commissioner of Central Excise & Customs held that while the respondent indeed provided 'security agency service,' the demand was deemed unsustainable due to the lack of evidence of suppression and the absence of recovery proposed under the appropriate provisions of the Finance Act, 1994. The Tribunal further noted that citing the wrong provision does not automatically invalidate the demand, but in this case, the extended period ingredients were found to be lacking, leading to the failure of the scope for recovery.

The judgment also delves into the relevance of case laws, specifically mentioning the decisions of the Hon’ble Supreme Court in N.B. Sanjana Assistant Collector of Central Excise, Bombay and others v. The Elphinstone Spinning and Weaving Mills Co Ltd. and Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd., stating that they do not assist the Revenue in the current circumstances. Additionally, the respondent's argument of not being engaged in the business of providing 'security agency service' solely based on their registration under relevant labor law was deemed insufficient to exclude them from tax liability.

Ultimately, the Tribunal dismissed the appeal of the Revenue, affirming that the demand does not sustain due to the bar of limitation and the lack of evidence supporting suppression. The judgment also disposed of the Cross Objection raised in the case.