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2023 (8) TMI 50 - CESTAT KOLKATAExtended period of limitation - Management Consultancy service - Consulting fee (other than Management consulting) - Reimbursable expenses - Sub-contract - Software development - demand alongwith interest and penalty - HELD THAT:- For the Financial Years 2001-02 to 2004-05, the demand is clearly barred by limitation in as much as no allegation of willful suppression, mis-statement, fraud or collusion has been made in the Notice, and hence the impugned order traversed beyond the Notice. It is a settled position of law that in the absence of any such allegation in the Notice, extended period of limitation cannot be invoked. The Appellant has regularly filed ST-3 returns consequent upon obtaining Service tax registration on 17.08.2001. The demand was raised and confirmed solely on the basis of the audit objection raised by the AG (Orissa) during verification of Income Tax Returns, filed by them for the aforesaid period. There was no independent enquiry conducted to ascertain the correctness of the alleged short payment. The impugned order also has not given any finding regarding the invocation of extended period of limitation in this case - In this case the Appellant has filed returns regularly and disclosed all information to the department. Thus, the extended period of limitation is not invocable in this case. Consulting fee (other than Management consulting) - HELD THAT:- To levy of Service tax under Management Consultancy service as defined in Section 65(105)(r) read with Section 65(65) of the Act , the following conditions must be satisfied:- (i) Any service either directly or indirectly in connection with the management of any organization in any manner would be a management consultancy service; (ii) It includes rendering of any advice, consultancy, or technical assistance relating to conceptualizing, devising, development, modification, rectification or up gradation of any working system of any organization; (iii) Such service has to be provided by the service provider to a client. In the present case, none of the above criteria are satisfied in either of the activities undertaken by the Appellant during the period of dispute. The impugned order also has not given any finding as to how the Appellant are liable to pay service tax for the above said services under the category ‘Management Consultancy’. Accordingly, the demand on this account confirmed in the impugned order is liable to be set aside. Reimbursable expenses - HELD THAT:- The impugned order has not brought in any evidence to substantiate the allegation that the reimbursements received were towards rendering of any taxable service rendered by the Appellants to their clients. In the absence of any such evidence, it is held that the demand on this count is not sustainable. Sub-contract - HELD THAT:- The service rendered by the Appellant to the main contractor was not liable to service tax during the material period. Presently it has been specified that service provided by “any person” to “any other person” are liable to service tax, which was not the case during the relevant period. Hence, the contention of the Appellant is agreed upon that the services rendered by the sub contractor to the main contractor was not liable to service tax during the material period. Accordingly, the demand on this count is liable to be set aside. Software development - HELD THAT:- Services rendered in the nature of software development provided by the Appellant was exempted from payment of Service tax in terms of Notification No. 16/2004-ST dated September 10, 2004. Accordingly, no service tax was payable on the amount received towards software development. The demands confirmed in the impugned order are not sustainable on merit as well as on limitation. Since, the demand itself is not sustainable, the demand of interest and imposition of penalty is also not sustainable. Appeal allowed.
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