2019 (6) TMI 382 - AT - Service Tax

Business Auxiliary Service - commission received as a distributor of Amway - liability of service tax - Extended period of limitation - HELD THAT - On the identical issue this Tribunal has taken a view that demand for extended period will not be sustainable in case of Charanjeet Singh Khanuja 2015 (6) TMI 585 - CESTAT NEW DELHI wherein on the limitation it was held that When there is scope for doubt in the mind of an assessee on a particular issue, the longer limitation period, under proviso to Section 11 A(1) cannot be invoked - in the present case also the demand for the extended period is not sustainable. As regard, the demand for the period 2007-08 which is within the limitation, we find that the total commission received is 1,209/- whereas the exemption is available for the total aggregate value of ₹ 8 Lakhs, in terms of Notification No.6/2005-ST, therefore, this demand is also not sustainable as being exempted. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the commission received as a distributor of Amway is liable to service tax under Business Auxiliary Service.

Analysis:

The appellant contended that the demand is barred by limitation as the show-cause notice was issued beyond the extended period. The appellant argued that the commission received fell within the exemption limit under Notification No. 6/2005-ST, making the demand unsustainable. The appellant relied on various judgments to support their case.

The Revenue, represented by the Assistant Commissioner, supported the findings of the impugned order.

Upon hearing both sides and examining the records, the Tribunal noted that in a similar case, it was held that a demand for the extended period would not be sustainable if there was no deliberate intent to evade payment of tax. The Tribunal emphasized that failure to register for service tax or file returns does not automatically imply an intent to evade tax. Additionally, when there are differing views within the department on the taxability of certain activities, it indicates a scope for doubt in the mind of the assessee, thus limiting the applicability of the longer limitation period.

Based on the precedent and the facts of the case, the Tribunal concluded that the demand for the extended period was not sustainable. For the period within the limitation, the total commission received was well below the exemption limit specified in Notification No.6/2005-ST. Consequently, the demand for this period was also deemed exempt. Therefore, the demand raised by the lower authority was set aside, and the appeal was allowed.

This detailed analysis of the judgment highlights the arguments presented by both parties, the legal principles applied by the Tribunal, and the ultimate decision reached based on the facts and legal provisions cited during the proceedings.