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2024 (4) TMI 966 - CESTAT KOLKATAExtended period of Limitation - suppression of facts or not - Classification of services - supply of tangible goods service or not - deemed sale or not - outward liability towards non-scheduled air transport services under section 73(2) of Finance Act, 1994 - import of aircraft from Non-resident entity on payment of Lease rental, under section 73(2) of Finance Act, 1994 - Interest and Penalty - HELD THAT:- The Department has initiated investigation against the appellant for the first time in June 2010, on the ground that the appellant should discharge its tax liability under the category of ‘supply of tangible goods for use services’. However, no Show Cause Notice was issued at that point of time. Investigation was initiated against the appellant again in the year 2012. After expiry of a period of three years from the initiation of first investigation in month of June 2010, the appellant has been served with the impugned Show Cause Notice invoking extended period and alleging wilful evasion of Service Tax - the appellant has been filing the returns regularly and they have not suppressed any information from the Department. Accordingly, the demand of service tax confirmed in the impugned order by invoking extended period of limitation is not sustainable. This view has been held by Tribunal in the case of EIH LIMITED VERSUS C.C.E., DELHI-I [2018 (9) TMI 921 - CESTAT NEW DELHI], wherein the Tribunal has held The alleged suppression must be wilful and it is for the Department to prove the same as already observed above, that the Department has failed to prove the wilful intention. As a result, we are of the opinion that the Department was not entitled to invoke the extended period of limitation. Accordingly, the demand falling beyond one year period preceding show cause notice dated 21-12-2010 is not sustainable and accordingly is set aside. In terms of Section 73 of the Finance Act, 1994, a period of 1 (one) year from the relevant date has been prescribed to serve the Notice on the person chargeable with the service tax which has not been levied or paid or short levied or short paid. This period of one year has been increased to 18 months w.e.f. 28.05.2012. In the present case, the demand of service tax has been raised for the period 2008-09 to 2011-12 vide the impugned Show Caise Notice dated 18.10.2013 - the appellant is liable to pay service tax along with interest for the normal period of limitation, under the category of 'supply of tangible goods service'. As no suppression of fact with intention to evade the tax is established in this case, no penalty is imposable. Lease rental paid by the appellant to Non-resident entity under reverse charge - supply of tangible goods service - HELD THAT:- The demand has been raised on the Lease rental paid by the appellant to Non-resident entity under reverse charge. The appellant submits that there is no service involved in this transaction of leasing of the aircraft. A perusal of the Terms and Conditions of the Lease/rental agreement reveals that the operation of the aircrafts has been done by the appellant by appointing their own aircraft crew, maintenance staff, by undertaking maintenance and services activities. Thus, in terms of the conditions of lease rental agreement, both possession and control of aircraft has been transferred in favour of the appellant - As possession and effective control has been transferred to the appellant, the demand of service tax under the category of 'supply of tangible goods' is not sustainable. Interest and penalty - HELD THAT:- The demand confirmed in the impugned order on this count is not sustainable and hence, the same is set aside - As the demand of service tax is not sustainable, the demand of interest and penalty is also not sustainable. Appeal disposed off.
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