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2022 (12) TMI 1143 - AT - Service TaxInvocation of extended period of limitation - non-payment of service tax - providing the taxable service as that of Business Auxiliary Service on commission basis who had collected huge amount from various persons/companies/organizations etc. during the period from 01.10.2014 to 30.06.2017 - suppression of facts or not - HELD THAT - It is an admitted case of the appellant that the appellant did not get itself registered under Service Tax Commissionerate during the period in question while providing the impugned Business Auxiliary Services on commission basis. It has also been acknowledged while making submissions that the issue of services in question being taxable is no more res integra - Reliance placed in the decision of this Tribunal in the case of VED AUTOMOTIVES VERSUS COMMISSIONER OF CENTRAL EXCISE, KANPUR 2016 (11) TMI 836 - CESTAT ALLAHABAD , wherein a reference has been answered holding that the activity of direct selling agent on commission basis is a Business Auxiliary Service which is taxable under Section 65 (19) of the Finance Act, 1994. Whether the demand should not have been confirmed as the Show Cause Notice was issued beyond the normal period of limitation? - HELD THAT - It is observed that department can issue a show cause notice beyond the prescribed period of one year from the period under question only in accordance of the proviso to Section 73 of the Finance Act, 1994 - here there is suppression of any fact for the reason of fraud or collusion or any willful misstatement with an intent to evade duty, the department is entitled to invoke the extended period. No doubt mere non-disclosure of fact will not be such suppression as may entitle the department to invoke this provision except where there is an intent to evade the duty. From the above observed admission of the appellant, it is clear that appellant was not paying the service tax to the department despite providing the taxable service. It is also nowhere denied that even the service tax registration was not obtained. It is also observed that the present show cause notice was issued based upon the information received from the Income Tax Department. It becomes clear that the amount received by the appellant during the period under challenge was taken as the income of the appellant and accordingly, the income tax liability thereupon was being discharged by the appellant. The circumstances are sufficient for me to hold that there was no intent on the part of the appellant to evade the liability - it is held that the intent to evade the duty has wrongly been confirmed against the appellant. The non-payment of service tax was purely a bona fide unawarenss about the liability. In such circumstances the extended period could not have been invoked. The order under challenge though has dealt with the amount which was service tax liability of the appellant but the demand was not raised during the statutory period prescribed for raising the same. As held above, there was no reason to invoke the extended period of limitation. It is held that demand has been time barred and thus has wrongly been confirmed by Commissioner (Appeals). Appeal allowed.
Issues:
- Confirmation of service tax demand - Invocation of extended period for issuing Show Cause Notice Confirmation of service tax demand: The appellant, providing "Business Auxiliary Service" on a commission basis, collected a significant amount without discharging the service tax liability. The demand of Rs.9,09,689/-, interest, and penalty were proposed and confirmed by the adjudicating authorities. The appellant did not contest the demand on merits but challenged the confirmation based on the invocation of the extended period of limitation. The appellant argued that failure to supply information should not be considered suppression justifying the extended period. The appellant's contention was that the show cause notice was issued in 2020 for the period from 2014 to 2017, rendering the demand time-barred. The department, however, emphasized the appellant's non-disclosure as suppression justifying the extended period. The Tribunal observed that the appellant did not register under Service Tax Commissionerate while providing the service and did not obtain service tax registration. The appellant's belief that the commission received was income, not service tax liability, was considered bona fide. The Tribunal held that there was no mala fide intent to evade service tax, and the extended period could not be invoked. Invocation of extended period for issuing Show Cause Notice: The Tribunal analyzed the provision allowing the department to issue a show cause notice beyond the normal limitation period in cases of fraud, collusion, willful misstatement, suppression of facts, or contravention of provisions with intent to evade service tax. It was noted that mere non-disclosure without intent to evade duty does not constitute suppression. The Tribunal cited Supreme Court decisions emphasizing that suppression requires deliberate non-disclosure to evade duty. The Tribunal held that the appellant's non-payment of service tax was due to a genuine belief about the liability, not an intent to evade duty. The show cause notice was based on information from the Income Tax Department, indicating no intent to evade liability. The Tribunal concluded that the demand was time-barred and set aside the order confirming the demand. In conclusion, the Tribunal set aside the order confirming the service tax demand, holding that the demand was time-barred and wrongly confirmed by the Commissioner (Appeals). The appeal was allowed in favor of the appellant.
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