2024 (2) TMI 437 - AT - Service Tax

Levy of service tax - Business Auxiliary Service - imposition of penalty under Section 78 of the Finance Act, 1994 - Transportation, Bundling and Feeding of Bamboo - Unloading of Bamboo from Railway Wagons and shifting from Railway Siding to Bamboo Yard - Coal Ash Transportation, unloading/shifting of SSP/Ind. Salt from Railway Wagons to go-down - invocation of extended period of limitation - HELD THAT - The facts are not in dispute that for the period 1st October, 2008 to 30th September, 2013, the demand has been raised against the appellant under the category of Business Auxiliary Service by invoking extended period of limitation through show-cause notice dated 22.10.2013. It is also a fact on record that for the similar activity, another show-cause notice was issued to the sister concern of the appellant, namely, M/s Subham Syndicate to demand service tax under the category of Cargo Handling Service, which shows that the respondent was under confusion whether the activity undertaken by the appellant falls under the category of Cargo Handling Service or Business Auxiliary Service. In that circumstances, when the Revenue itself is not definite under which category the activity undertaken falls, the extended period of limitation is not invokable. Moreover, the activity undertaken by the appellant was known to the Department much prior to issuance of show-cause notice i.e. 20.06.2010, when Revenue issued a letter to the appellant - But no proceedings were initiated against the appellant - the extended period of limitation is not invokable. Further, the demand of service tax has been raised against the appellant under the category of Business Auxiliary Service and no particular clause of Business Auxiliary Service has been charged against the appellant. Therefore, the show-cause notice is defective - Further, post 01.07.2012, the negative list regime came into force and all the negative regime, the appellant is liable to pay service tax on the activity undertaken by them, but no demand has been made from the appellant under the negative list regime - for the period post 01.07.2012, the demand is not sustainable. The demand prior to 01.07.2012 is barred by limitation and post 01.07.2012 is not maintainable as no demand has been made under negative list regime - the impugned order is set aside - Appeal allowed.

Summary

Issues involved:
Appeal against service tax demand under Business Auxiliary Service and penalty imposition under Section 78 of the Finance Act, 1994.

Issue 1: Classification of service under Business Auxiliary Service
The appellant provided services including transportation, bundling, unloading, and shifting of goods. Revenue claimed the activity falls under Business Auxiliary Service, demanding service tax. Appellant argued confusion between Cargo Handling Service and Business Auxiliary Service, invoking extended limitation period. Appellant also cited a change in the statute post 01.07.2012, where services were to be taxed but not under Business Auxiliary Service. Appellant contended the demand is unsustainable as no specific clause of Business Auxiliary Service was invoked. Appellant further argued the Department was aware of the activity before the show-cause notice, hence limitation period not applicable. Tribunal found the confusion between service categories and the Department's prior knowledge of the activity as reasons to hold the extended limitation period not invokable.

Issue 2: Demand under Negative List Regime
Post 01.07.2012, the negative list regime came into force, but no demand was made under this regime. Tribunal referenced a previous case to support that demands post 01.07.2012 under the old regime are not maintainable. The Revenue's argument regarding rectification of mistake in the show-cause notice was deemed inapplicable as no demand was raised under the negative list regime post 01.07.2012. Consequently, the demand prior to 01.07.2012 was held barred by limitation, and post 01.07.2012 demand was deemed not sustainable. The impugned order was set aside, and the appeal was allowed with any consequential relief.