2024 (8) TMI 1339 - AT - Service Tax

Invocation of extended period of limitation - SCN issued on the third party data - Recovery of service tax - levy of penalty - HELD THAT - The show cause notice dated 06.09.2018 seeks to cover the period 2012-13 onwards as submitted by the learned Counsel for the appellant; the period before 01.10.2012 is clearly beyond even the extended period; for this reason, the demand confirmed cannot be sustained and confirmation of demand, if any, has to be for the period 01.10.2012 to 31.03.2013 only. In addition, learned Counsel for the appellant submits that as the appellant has rendered only one service, abatement @60% in terms of Rule (2C) of the Service Tax (Determination of Value) Rules, 2006 should be allowed to them. The argument of learned AR that the appellant has not obtained registration and not filed returns should not come in the way of the benefit i.e. legally due to the appellant. On going through the facts and circumstances of the case, this Bench finds that there are no reasons to disbelieve the learned Counsel for the appellant. This Bench appreciates the fairness of the learned Counsel in accepting the liability even when extended period cannot be invoked. This Bench finds its appropriate to confirm the duty for the period 01.10.2012 to 31.03.2013 along with interest. This Bench is of the considered opinion that no penalty is imposable on the appellant. The appeal is partially allowed by confirming the demand of Rs.42,013/- for the period 01.10.2012 to 31.03.2013 along with interest.

Summary

Issues:
1. Applicability of extended period for demand of service tax.
2. Interpretation of abatement rules for Outdoor Catering Service.
3. Requirement of registration and filing returns for service providers.
4. Imposition of penalties for non-compliance.

Analysis:
1. The appeal was against an order confirming a demand for service tax based on third-party information. The appellant provided Outdoor Catering Service and the demand was for the period 2012-13 to 2017-18. The Adjudicating Authority confirmed the demand, but the Commissioner (Appeals) partially allowed the appeal, confirming only a portion of the demand for 2012-13. The appellant argued that the extended period should not apply as the show cause notice was issued based on third-party data. The Tribunal held that the demand could only be sustained for the period 01.10.2012 to 31.03.2013, as the period before that was beyond the extended period. The appellant's argument for 60% abatement under Rule (2C) of the Service Tax Rules was accepted, and the demand was confirmed only for the specified period.

2. The appellant contended that they provided only Outdoor Catering Service and should be entitled to the abatement under the rules. The Tribunal agreed with this argument and allowed the abatement, considering that the appellant had rendered only one service. The Tribunal emphasized that the lack of registration and filing returns should not hinder the appellant from availing the abatement legally due to them.

3. The Revenue argued that the extended period was applicable due to the appellant's failure to provide proof of rendering only one service and non-compliance with registration and return filing requirements. However, the Tribunal found no reason to disbelieve the appellant's claim of providing only one service. The Tribunal appreciated the appellant's readiness to accept liability even when the extended period could not be invoked.

4. After considering the facts and circumstances, the Tribunal concluded that the demand for Rs.42,013/- for the period 01.10.2012 to 31.03.2013 should be confirmed along with interest. The Tribunal held that no penalty was imposable on the appellant, partially allowing the appeal by confirming the demand for the specified period.

This judgment clarifies the application of the extended period for demand of service tax, interpretation of abatement rules for specific services, the significance of registration and return filing for service providers, and the discretion in imposing penalties for non-compliance.