2024 (10) TMI 385 - AT - Service Tax

Extended period of limittaion - suppression of facts or not - Short payment of service tax - construction of residential complex service - advances received from customers - demand confirmed on the portion of construction premises allotted to the landowner - demand confirmed in respect of the Siliguri project - HELD THAT - The information regarding the details of the advances received by the Appellant were collected by the Department from the Balance Sheet and reconciliation statement submitted by the Appellant themselves. The Notice has been issued on the basis the differences found in the data furnished by the appellant in these two documents. Therefore, it is observed that there is no suppression of facts with intention to evade payment of tax established in this case. Further, it is observed that the Show Cause Notice in this case has been issued on 27.09.2019, which is beyond the period of thirty months from the date of filing of the Return by the Appellant i.e., 13.01.2017/14.01.2017. The entire demand confirmed in the impugned order is hit by the bar of limitation. Since the Department has not brought any evidence on record to establish the intention to evade payment of tax on the part of the Appellant in the instant case, the demand confirmed by invoking the extended period of limitation is not sustainable. The demand confirmed in the impugned order is not sustainable on the ground of limitation and accordingly, the same is set aside - Since the demand itself is not sustainable, the question of demanding any interest or imposing penalty does not arise - appeal allowed.

Issues:
1. Confirmation of Service Tax demands on advances received from customers.
2. Confirmation of Service Tax demand on the portion of construction premises allotted to the landowner.
3. Confirmation of Service Tax demand in respect of the Siliguri Project.
4. Invocation of extended period of limitation for issuing the Show Cause Notice.
5. Suppression of facts and intention to evade payment of tax.
6. Sustainability of demands confirmed in the impugned order.
7. Applicability of interest and penalty.

Analysis:

Issue 1: Confirmation of Service Tax demands on advances received from customers
The Appellant was issued a Show Cause Notice for short payment of Service Tax on the 'construction of residential complex service' during a specific period. The Ld. Joint Commissioner confirmed demands on advances from customers, with the Ld. Commissioner (Appeals) upholding a portion of the demand. The Appellant argued that the demands were beyond the normal period of limitation and that the information was not suppressed. The Tribunal observed that the Show Cause Notice issued beyond the limitation period lacked evidence of intention to evade tax, thus setting aside the demand.

Issue 2: Confirmation of Service Tax demand on the portion of construction premises allotted to the landowner
The Ld. Commissioner (Appeals) dropped the demand on the portion allotted to the landowner, which was confirmed by the adjudicating authority. The Appellant contended that the demand was beyond the limitation period. The Tribunal found that the demand was unsustainable due to the lack of evidence of tax evasion and set it aside.

Issue 3: Confirmation of Service Tax demand in respect of the Siliguri Project
The demand related to the Siliguri Project was confirmed, with the Appellant arguing that it was time-barred. The Tribunal agreed that the demand exceeded the limitation period, lacked evidence of tax evasion, and thus set it aside.

Issue 4: Invocation of extended period of limitation for issuing the Show Cause Notice
The Tribunal noted that the Show Cause Notice was issued beyond the statutory limitation period, and as there was no evidence of tax evasion or suppression of facts, the demands were not sustainable under the extended period of limitation.

Issue 5: Suppression of facts and intention to evade payment of tax
The Tribunal found that the Department collected information from the Appellant's Balance Sheet and reconciliation statement, indicating no suppression of facts. As there was no intention to evade tax, the demands confirmed based on alleged suppression were deemed unsustainable.

Issue 6: Sustainability of demands confirmed in the impugned order
Due to the demands being beyond the limitation period and lacking evidence of tax evasion or suppression of facts, the Tribunal held that the demands confirmed in the impugned order were not sustainable and set them aside.

Issue 7: Applicability of interest and penalty
As the demands were set aside, the question of demanding interest or imposing penalties did not arise, and the appeal filed by the Appellant was allowed on the ground of limitation.

This detailed analysis of the judgment provides insights into each issue raised, the arguments presented, and the Tribunal's reasoning for setting aside the demands based on the limitation period and lack of evidence of tax evasion or suppression of facts.

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