2022 (6) TMI 712 - AT - Service Tax

Rectification of mistake - Levy of service tax - service received by the Airlines/assessee are covered under the tax entry Online data base retrieval and access service or not - extended period of limitation - revenue neutrality - levy of interest and penalty - HELD THAT - The appeal of the assessee have been allowed on both the grounds of revenue neutrality and non applicability of extended period of limitation. This Tribunal holding the situation as revenue neutral, have not placed reliance on the ruling in the case of Angadpal Indl. P. Ltd., rather appreciating the facts that admittedly the assessee have deposited their output tax and thus in the facts and circumstances whatever service tax, if it was paid (on the input service of OLIDAR under RCM) was available as Cenvat credit and thus the situation is revenue neutral ipso facto. In view of the provisions of Section 73 (2A) of the Finance Act, the demand for the normal period of limitation (i.e. 18 months from the date of show cause notice dated 23.10.2013 or for the period Feb., 2012 to till 23.10.2013) is confirmed - this ROM application filed by Revenue is allowed.

Summary

Issues:
1. Liability of the appellant to pay service tax under the head 'Online Information and Data Base Access or Retrieval Service' (OLIDAR) with respect to service received from CRS/GDS companies.
2. Applicability of the extended period of limitation.
3. Whether penalty and interest have been rightly demanded.

Analysis:

Issue 1:
The Tribunal held that the appellant is liable to pay service tax under the head 'Online Information and Data Base Access or Retrieval Service' (OLIDAR) for the service received from CRS/GDS companies.

Issue 2:
Regarding the extended period of limitation, the Tribunal determined that it was not applicable as the appellant was registered with the service tax department and was paying service tax on output service. The Tribunal noted that the situation was revenue neutral as the service tax paid as a recipient of OLIDAR service was utilized for providing taxable output service, making Cenvat credit available to the appellant. The Tribunal also found that penalty and interest were not payable, and allowed the appeal based on the grounds of revenue neutrality and non-applicability of the extended period of limitation.

Issue 3:
The Revenue filed a ROM application contending that since the extended period of limitation was deemed not applicable, the demand for the normal period should have been confirmed. The Tribunal considered the Revenue's argument based on Section 73(2A) of the Finance Act, which mandates confirming the demand for the normal period if the extended period is not applicable. The Tribunal referred to relevant case laws and ultimately confirmed the demand for the normal period of limitation.

In conclusion, the Tribunal allowed the Revenue's ROM application, confirming the demand for the normal period of limitation, despite initially allowing the appeal on the grounds of revenue neutrality and non-applicability of the extended period of limitation. The decision was based on a comprehensive analysis of the legal provisions, case laws, and factual circumstances presented during the proceedings.