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TMI Blog2017 (5) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and clarifications. In such situation, there is no scope for invoking extended period for demand of service tax. There is no case for fraud, collusion, willful mis-statement or suppression of facts with intent to evade service tax in these cases. Accordingly, we hold the service tax liability should be restricted to the normal period available u/s 73 (1) of the FA, 1994. The Hon’ble Supreme Court in Thirumalai Chemicals Ltd. vs. Union of India [2011 (4) TMI 489 - SUPREME COURT OF INDIA] held that law of limitation is generally regarded as procedural and its object is not to create any right but to prescribe periods within which legal proceedings be instituted for enforcement of rights which exist under substantive law. The appellants are liable to service tax on reverse charge basis in respect of commission paid to foreign agents. Such liability will be only w.e.f. 18/04/2006 and restricted to the normal period of demand - penalty set aside - appeal disposed off - decided partly in favor of assessee. - Service Tax Appeals No.1052–1060 with 1474 and 1750 of 2011 - ST/A/53507-53517/2017-CU[DB] - Dated:- 26-5-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravich ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial waters of India are not liable to service tax. Even the Original Authority as well as First Appellate Authority held in these proceedings, that penalties are not imposable as the issue involved is one of interpretation of law and in any case, the matter is revenue neutral ; (d) all the notices which are subject matter of these appeals were issued prior to 10/05/2013 invoking proviso to Section 73 (1) of the Finance Act, 1994. As there is no case for suppression of facts with intent to evade payment of service tax, to demand for normal period also cannot be upheld. Section 73 was amended by Finance Act, 2013. W.e.f. 10/05/2013 sub-Section (2A) was inserted under Section 73. Prior to that date, there is no provision to restrict the demand to normal period, in case the demand for extended period was held to be not sustainable. 3. The learned AR submitted that Section 66A of the Act is very clear and unambiguous. Admittedly, the appellants availed services of foreign selling agents and paid consideration for such services. The liability to service tax under BAS cannot be disputed. The appellants are taking a plea regarding revenue neutrality and un-sustainability of dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore applying the principles of revenue neutrality, it is to be noted that the eligibility of credit to the appellant should be clearly established with supporting evidence. Further, the appellants claim for refund of the said credit is subject to various conditions stipulated under Rule 5 of Cenvat Credit Rules, 2004 or Rule 18 of Central Excise Rules, 2004. We cannot record a categorical finding regarding the eligibility of the appellants for such benefits as these matters are not before us for decision. As rightly contended by the Revenue that revenue neutrality as a concept will help the appellants to defend their case of bonafide belief against service tax liability and accordingly to defend against penal action or demand for extended period. The penal action and demand for extended period arises when the ingredients of suppression, willful mis-statement etc. are established. Further, we also note that there can be no general rule to the effect that the assessee need not pay tax if the same is available as a credit to them. In other words, a purported revenue neutral situation cannot, by any means, mitigate a tax liability of an assessee, which is otherwise payable in view of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e.f. 10/05/2003 was quoted in support of such assertion. It is the case of the appellant that the demand for normal period can stand only for the period after 10/05/2013 when sub-Section (2A) was inserted under Section 73. The appellants relied on the decision of Hon ble Calcutta High Court in Infinity Infotech Parks Ltd. vs. Union of India reported in 2014 (36) S.T.R. 37. The Hon ble High Court relied on the decision of Hon ble Supreme Court in Alcobex Metals 2003 (4) SCC 630. However, on examination of these decisions, we find that no law has been laid down by the Hon ble Supreme Court regarding the non-sustainability of demand for normal period in case the demand for longer period was held untenable. The Hon ble Calcutta High Court in Naresh Kumar Co. Pvt. Limited vs. Union of India reported in 2014 (35) S.T.R. 506 (Calcutta) held as below :- 13. .. In case of Collector of Central Excise, Jaipur v. Alcobex Metals reported in 2003 (153) E.L.T. 241 (S.C.), one of the plea agitated before the Supreme Court was whether the show cause notices can still be treated as invalid for the period which is within the normal period of limitation. The Apex Court did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is clear even from the newly inserted sub-Section (2A) of the said Section. It states that where any appellate Authority or Tribunal or Court concludes that the notice under proviso to sub-Section (1) is not sustainable, then the Central Excise officer shall determine the service tax payable for the period of 18 months, as if the notice has been issued with a limitation applicable under sub-Section (1). It is clear that the said sub-Section refers to only findings by the Appellate Authority. It means that when the Original Authority himself decides, that based on evidences, the ingredients of proviso clause is not available in a particular case then he himself will restrict to the demand to the normal period. Such restriction of demand to the normal period can be done in case of direction by appellate Authority also. Considering the fact that there cannot be two different show cause notices against the same assessee simultaneously, one under the main sub-Section (1) of Section 73 and another one invoking proviso to sub- Section (1) of Section 73, it is apparent that a demand issued for longer period includes the demand of normal period, falling under the very same main sub-Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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