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TMI Blog2017 (11) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... 600/2017, Interim Order No.1045/2014 - Dated:- 3-11-2017 - Ms. Archana Wadhwa, Member (Judicial), Mr. Rakesh Kumar, Member (Technical), B. Ravichandran Member (Technical) And S. K. Mohanty Member (Judicial) Sh. Govind Dixit,DR for the Appellants Shri O.P. Agarwal,CA for the Respondent ORDER Per: Archana Wadhwa (for the Bench) Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal. We have heard Ld. DR, Shri Govind Dixit. Shri O.P. Aggrawal, Ld. CA appeared for the respondent. 2. After hearing both the sides, we find that the appellant is a multi system operator, engaged in providing taxable services w.e.f. 09.10.04. inasmuch as, he did not get himself registered with the service tax department, for payment of Service Tax n relation of taxable services of section 65(105) (zs) of the Finance Act, 1994 and did not pay Service Tax, he was issued a Show Cause Notice dated 21.8.2007, raising the demand of Service Tax of ₹ 32,37,331/- and education-cess of ₹ 64,747/- for the period 1/10/2004 to 15/06/2004, in terms of the provisions of proviso to Section 73(1) of chapter (V) of the Finance Act 1994. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B.11/1/2002-TRU dated 1/08/2002, which was not withdrawn even after the amendments made on 10.09.2004. Inasmuch as the appellant was not providing services to the ultimate subscriber, they entertained a bonafide belief that the services provided by them to the cable operator are not taxable. As soon as the Jurisdictional Central Excise Authority directed them to do so, vide their letter dated 18.07.2005, they had already started paying tax as MSO w.e.f. 16.06.05. They had also addressed a letter to the department on 02.09.2005 referring to the board s circular and the reasons for non-payment of the tax. The Commissioner, also took into account various decisions of the Supreme Court and held that inasmuch as the Show Cause Notices merely invoked the longer period of limitation, without alleging as to whether such suppression was willful or with an intent to evade payment of duty, mere allegation of suppression cannot be held to be proper. He accordingly, allowed the appeal on limitation. Hence the present appeal by the Revenue. 6. After appreciating the submissions made by both the sides and after going through the impugned orders, we find merits in the reasoning adopted by Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant has committed any of the specified activities in the said section, with a malafide mind, we are of the view that longer period of limitation has been rightly held by the appellant authority, as not available to the Revenue. 8. Otherwise also we find that there were various boards circular providing that the services by the cable operators to the ultimate subscribers are taxable to service tax, which could lead the assessee to a reasonable belief that the services provided by him to the cable operators are not taxable. After the introduction of MSO service w.e.f. 10.09.2004, no further clarifications stand issued by the board. In any case, we find that the appellant started paying duty w.e.f. 16.06.2005, in terms of the directions contained by the department in their various communications, even than the Show Cause Notice was issued only on 21.08.2007. In any case the Revenue became aware of the assessee activities on 16.06.2005, when he started paying service tax on the multi operator services. The Revenue thereafter took more than 2 years to issue the Show Cause Notice in question for the period prior to 16.06.2007. 9. For all the reasons recorded above, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s order and allowed the appeal filed by the respondent and rejected the appeal filed by the department for enhancement of penalty. Against this order of the Commissioner (Appeals), this appeal has been filed. 12. Since the submissions from both the sides have been recorded in the order dictated by my learned sister in the open court, there is no need to repeat the same. 13. There is no dispute that the service provided by the respondent had become taxable w.e.f. 10.09.2004. However, my learned sister has dismissed the Revenue s appeal and has upheld the Commissioner (Appeals) s order on the ground of limitation, as (a) During the period of dispute there was confusion in the mind of the general public about the service tax and hence, there could be no mala fide on the part of the respondent for evading the payment of service tax; (b) Service tax payable by the respondent was available as cenvat credit to the cable operators, who were already in the service net and were paying the service tax and the said cable operators were under the same commissionerate and the tax collected by the Revenue would have been the same; and (c) It is well settled law that in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1994 is applicable for demand of service tax for the period from 10.09.2004 to 15.06.2005 raised by show cause notice dated 21.08.2007 and whether penalty is imposable on the Respondent under Section 78 of the Finance Act, 1994. (Rakesh Kumar) Member (Technical) (Archana Wadhwa) Member (Judicial) Interim Order No.70/2017 Per S. K. Mohanty 16. The present appeal is referred to Third Member in view of difference of opinion between the Members in the Division Bench on the issue of limitation. 17. Brief facts of the case are that the respondent provides services falling under Section 65 (105) (zs) read with Section 65 (21) and 65 (22) of the Finance Act, 1994 as multi-system operator (MSO). The respondent receives signals from broadcasters and transmits the same to the cable operator, who in turn re-transmit to the ultimate subscriber. The Department vide order dated 29.11.2007 has confirmed service tax demand of ₹ 33,02.078/- by invoking the extended period of limitation for the period from 01.10.2004 to 15.06.2005 in respect of the show cause notice dated 21.08.2007. Besides, penalties were also imposed under Section 76 78 ibid. On appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or inaction on the part of the assessee in payment of duty, the Department will not be justified in invoking the longer period of limitation, unless it is substantiated that such failure is with an intent to evade payment of tax. Thus, the ld. Member (J) has concluded that since the Revenue was aware of the assessee s activities on 16.06.2005 and thereafter took more than 2 years for issuing show cause notice, the same is clearly barred by limitation of time. 21. Per contra, the ld. Member (T) has held that since multi-system operators service had become taxable with effect from 10.09.2004, the respondent cannot plead ignorance of law for non-payment of the service tax. He also relied on the Larger Bench decision of this Tribunal in the case of Jay Yuhshin Ltd. Vs. CCE, New Delhi 2000 (119) E.L.T. 718 (Tribunal-LB) to state that revenue neutral situation is applicable only in those cases, where any tax payable by an assessee is immediately available to him as cenvat credit and not to another person. Thus, the ld. Member (T) concluded that longer period of limitation is available to the Revenue; on the ground that non-payment of service tax was deliberate, with the inten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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