2018 (8) TMI 797 - AT - Service Tax

Security Agency Services - N/N. 56/98-ST dated 07.10.1998 - time limitation - Held that - Admittedly, the appellants had provided the Security Agent Service to the appellant and have also not been able to establish about that part of the said services in respect of security of lockers and strong room etc. so as earn the exemption - there are merits in appellant s contention as regards time bar. Service tax law having been issued recently, was not free from doubt and a lot of litigation was going on specially in respect of the Security Agent Service. The appellant being an illiterate person, may have been under a bonafide belief that no tax liability gets fastened upon him. As such in the absence of any positive evidence to reflect upon the malafide of the appellant, the extended period would not be available to the appellant. Accordingly, the demand falling within the limitation period. Cum-duty benefit - Held that - The issue is no more res-integra and it stands held in many decisions that the cum-duty benefit has to be extended. As the matter is being remanded for re-quantification of the demand falling within the limitation period, the Original Adjudicating Authority directed to extend the benefit of cum-duty also and re-quantify the demand accordingly. Penalty - Held that - there is no malafide on the part of the appellant, there is no justifiable reason to impose penalty upon him. Appeal disposed off.

Summary

Issues:
1. Confirmation of demand of duty for Security Agent Services provided.
2. Exemption claim under Notification No.56/98-ST.
3. Grounds of limitation for demand raised.
4. Cum-duty benefit applicability.
5. Imposition of penalty.

Analysis:
1. The judgment confirms the demand of duty against the appellant for providing Security Agent Services to specific entities during the relevant period. The appellant's argument regarding the usage of security guards for protecting lockers and movable property, supported by a certificate, was not deemed sufficient by the lower authorities due to lack of additional evidence. The demand was also challenged on the basis of limitation, with show cause notices covering different periods. The tribunal found merit in the appellant's time bar contention, considering the complexity and uncertainty surrounding service tax laws at the time. The demand falling within the limitation period was upheld.

2. Despite the appellant's failure to establish the exempted nature of services for securing lockers and strong rooms, the tribunal acknowledged the genuine belief of the appellant, who was illiterate, regarding tax liability. In the absence of evidence indicating malafide intent, the extended period for demand was deemed inapplicable. The tribunal directed the Original Adjudicating Authority to re-quantify the demand within the limitation period and extend the cum-duty benefit, following established precedents.

3. The issue of cum-duty benefit was addressed based on previous decisions, determining that such benefit should be granted. The matter was remanded for re-quantification, with instructions to consider the cum-duty benefit. Given the tribunal's finding of no malafide on the appellant's part and the genuine belief regarding tax liability, the penalty imposition was deemed unjustifiable and subsequently set aside.

4. In conclusion, the appeal was disposed of with the decisions outlined above, emphasizing the considerations related to demand confirmation, exemption claim, limitation grounds, cum-duty benefit applicability, and penalty imposition. The judgment reflects a balanced approach considering the complexities of service tax laws and the appellant's circumstances, ultimately leading to a nuanced resolution of the issues raised in the case.