2019 (5) TMI 1348 - AT - Service Tax

Business Auxiliary Services - appellants role as distributors for M/s. Amway India Enterprises P. Ltd. (M/s. Amway) whereby the appellant promoted the products of M/s. Amway - suppression of facts or not - extended period of limitation - HELD THAT - On merits we are constrained to hold against the assessee, but however, since no evidences are brought out on record to justify the allegation of suppression, the Revenue could not have invoked the extended period of limitation. Hence, the appeals of the assessee are allowed for the larger period, but however the same will not apply for the normal period of limitation - penalties also set aside. Appeal allowed in part.

Summary

Issues:
Service tax liability for business auxiliary service, applicability of penalty under Section 78, invocation of larger period of limitation.

Analysis:

1. Service Tax Liability for Business Auxiliary Service:
The case involved Show Cause Notices alleging the appellants' role as distributors for a company, promoting its products and receiving commission payments after deducting tax at source. The Orders-in-Original confirmed the proposals in the Show Cause Notices, holding the appellants liable for service tax under 'Business Auxiliary Service'. The appellants appealed the Orders-in-Original, which were dismissed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), leading to the appeal before the tribunal.

2. Applicability of Penalty under Section 78:
During the hearing, the advocate for the appellants referred to a previous Tribunal decision and a recent Order of the Bench to argue that there was a bona fide doubt regarding taxability, and the appellants had paid the service tax before the Show Cause Notices were issued. The advocate highlighted that there was no evidence for suppression, and therefore, penalty under Section 78 was not exigible. The Revenue, however, supported the lower authorities' findings and sought to sustain the impugned Orders.

3. Invocation of Larger Period of Limitation:
The tribunal analyzed the previous Tribunal decision and the recent Order of the Bench to conclude that while they were constrained to hold against the assessee on merits, there was no evidence to justify the allegation of suppression. As a result, the Revenue could not have invoked the extended period of limitation. Therefore, the appeals of the assessee were allowed for the larger period, but not for the normal period of limitation. Consequently, the penalties were ordered to be set aside based on the lack of evidence for suppression.

In conclusion, the tribunal allowed the appeals of the assessee to the extent indicated above, emphasizing the importance of evidence in justifying allegations and invoking the extended period of limitation. The judgment highlighted the significance of distinguishing between normal and larger periods of limitation based on the presence or absence of evidence for suppression in tax matters.