2020 (8) TMI 226 - AT - Service Tax

Security of Service Tax - abatement of tax - It was noticed by Revenue that as provided under Notification No.30/2012-ST dated 20-06-2012 appellant were required to pay 75% of the service tax chargeable on receiving security services - extended period of limitation - Penalty - HELD THAT - Since the matter had come to the knowledge of Revenue on 16.11.2012, extended period of limitation as on 31.12.2015 is not invocable by Revenue. Therefore, Revenue could demand service tax not paid for normal period as on 31.12.2015. Further, while computing service tax, Cum-duty benefit needs to be extended. Penalty - HELD THAT - Since the extended period of limitation is not available to Revenue, penalty under Section 78 shall not be eligible to be imposed. The matter is remitted to Original Authority with directions to compute service tax payable by the appellant for normal period of limitation as on 31.12.2015, extending Cum-duty benefit - appeal allowed by way of remand.

Summary

Issues:
1. Applicability of extended period of limitation for demanding service tax.
2. Computation of service tax payable by the appellant.
3. Eligibility of penalty under Section 78.

Analysis:
1. The issue of the applicability of the extended period of limitation for demanding service tax arose in this case. The appellant, a State Government undertaking, was registered for payment of service tax and was receiving 'Security Services' from a service provider of the State Government. The Revenue initiated proceedings through a show cause notice dated 31.12.2015, invoking the extended period of limitation. However, it was noted that the matter had come to the knowledge of Revenue on 16.11.2012. The Tribunal held that the extended period of limitation as on 31.12.2015 was not invocable by the Revenue in this case, and therefore, the Revenue could demand service tax not paid for the normal period as on 31.12.2015.

2. The Tribunal also addressed the computation of service tax payable by the appellant. It was observed that while computing the service tax, Cum-duty benefit needed to be extended. As a result, the Tribunal remanded the matter to the Original Authority with directions to compute the service tax payable by the appellant for the normal period of limitation as on 31.12.2015, extending the Cum-duty benefit. Importantly, the Tribunal clarified that since the extended period of limitation was not available to the Revenue, penalty under Section 78 shall not be eligible to be imposed in this case.

3. In conclusion, the Tribunal remanded the matter to the Original Authority with the above directions. The appeal was allowed by way of remand, emphasizing the computation of service tax payable and the ineligibility of imposing a penalty under Section 78 due to the non-applicability of the extended period of limitation. The judgment provided clarity on the issues of limitation, computation of service tax, and the imposition of penalties under Section 78 in the context of the appellant's case.