2019 (7) TMI 1481 - HC - Service Tax

Extended period of Limitation - whether SCN dated 27.03.2008 issued by the Revenue was barred by limitation? - suppression of facts or not - HELD THAT - The finding recorded by the Commissioner (Appeals) is absolutely in consonance with the facts and circumstances of the case. It is only when the Revenue had the information about the activities of the appellant of providing vehicle on hire, a notice in the year 2004 was issued asking him to get registered within seven days. The notice was responded by the appellant wherein he had made clear that he is not the owner of any tourist vehicle or a tour operator . Not only this took the matter with Director (Technical) NEEPCO to whom he provided vehicle on hire, vide in his communication dated 31.03.2004 mentioning therein that he has not recovered the service tax for vehicle hiring charge from NEEPCO whereas, Central Excise Department had issued notice based on the information from NEEPCO. It appears that the Revenue thereafter has not chosen to initiate any action. The Commissioner (Appeals) has rightly concluded that the activities of the appellant were well within the knowledge of the Revenue, therefore, no question of suppression of any fact. The finding of the Commissioner (Appeals) in our considered opinion is quite apposite - From the record nothing is forthcoming so as to substantiate the action of the Revenue in sleeping over the matter for a period w.e.f. 2004 till 2006 and then on 27.03.2008 when show cause notice was issued. Show cause notice having been admittedly issued after the prescribed period of one year was clearly barred by limitation as rightly concluded by the Commissioner (Appeals). The order of learned Commissioner (Appeals) dated 03.12.2010 being well reasoned and logical is restored - Appeal allowed.

Summary

Issues:
1. Whether the show cause notice issued by the Revenue was barred by limitation.
2. Whether the appellant suppressed information regarding providing vehicles on hire.
3. Whether the order of the Commissioner (Appeals) was justified in setting aside the penalty and interest.

Analysis:
1. The case involved an appeal challenging an order dated 05.02.2018 by the Customs, Excise and Service Tax Appellate Tribunal. The appellant provided vehicles on hire to NEEPCO without paying service tax since 01.04.2002. The Revenue issued a notice in 2004, but no further action was taken until 2006 and a show cause notice was issued in 2008. The Commissioner (Appeals) held the notice was barred by limitation, as the Revenue was aware of the appellant's activities since 2004. The Tribunal disagreed, stating the appellant suppressed information, leading to the restoration of the original order.

2. The appellant contended that he was not a tour operator and did not fall under the service tax rules. The Commissioner (Appeals) found that the Revenue was aware of the appellant's activities since 2004, and the appellant's response to the notice clarified his position. The Tribunal, however, held that the appellant suppressed information by not disclosing providing vehicles on hire, contradicting the Commissioner (Appeals) and restoring the original order.

3. The Commissioner (Appeals) set aside the penalty and interest, stating the Revenue was aware of the appellant's activities since 2004, and the show cause notice in 2008 was barred by limitation. The Tribunal disagreed, citing the appellant's alleged suppression of information. The High Court found the Tribunal's decision unsustainable, reinstating the Commissioner (Appeals) order due to the Revenue's knowledge of the appellant's activities and the notice being time-barred.

In conclusion, the High Court ruled in favor of the appellant, setting aside the Tribunal's decision and restoring the order of the Commissioner (Appeals) due to the Revenue's awareness of the appellant's activities and the show cause notice being barred by limitation.