TMI Blog2020 (1) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... s definition and only those specific activities, if carried out, would get covered under Business Support Services. Admittedly, the appellant is nowhere alleged to have provided any of those services which are specified therein, but rather has only asked to keep intact for access whenever required. The exclusive definition of Business Support Service clearly does not cover this service. Further, the Revenue has nowhere endeavoured to bring on record anything as to whether the appellant did provide any other service other than merely agreeing to grant M/s. SFSH or its nominees right to access its branch network and agency force during the period under consideration. Although the consideration appears to be disproportionate, but however, in the absence of any evidence on record, we also cannot go any further - The law as it stood up to the introduction of Negative List did not take under Service Tax the agreement for providing any services and only with effect from 01.07.2012 did such services become taxable. The liability has been wrongly fastened under Business Support Service. Firstly, the definition of Business Support Service did not cover mere agreeing to grant right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H) or its nominees, for keeping intact entire branch network and agency force ready to use whenever requested; that the appellant was liable to pay Service Tax of ₹ 3,99,30,000/-on the consideration received by them during 2006-08, 2008-09 and 2009-10; that the appellant had contravened provisions of Section 68 of the Finance Act, 1994 read with Rule 6 of the Service Tax Rules, 1994; that the appellant had also contravened Section 70 read with Rule 7 ibid by not reflecting the consideration received towards the value of taxable services in their ST-3 returns and that therefore, a proposal was made to demand the above tax along with applicable interest and penalties. 4.1 The appellant filed its detailed reply, mainly contending that the appellant had only agreed to provide services in case the same were required, but had not rendered any services and that mere keeping intact as per the agreement would not ipso facto amounts to rendering of any service. The assessee also contended, inter alia, that in terms of Section 66, Service Tax would only be on services provided or to be provided, but not on the services agreed to be provided; that the taxability on the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduction of Negative List, mere agreeing to provide any service was never a taxable event. He also further emphasized that even the Business Support Service was brought into the statute with effect from 01.05.2006; the first agreement having been entered into on 01.12.2005, the alleged services cannot be taxed since the chargeability was not having retrospective effect, or for the events that happened earlier to the very introduction of the charging Section. 7.2 Ld. Advocate also submitted, without prejudice to his other contentions, that the appellant should have been given the cum-duty benefit, which was not extended by the authorities. He further submitted, pointing to the documents relied on by the Ld. Commissioner for issue of Show Cause Notice, that the very basis inter aliawas the balance-sheet, Profit Loss (P L) Account and ST-3 returns for the period 2005-06 to 2009-10; that the Show Cause Notice dated 19.10.2011 was issued much thereafter, i.e., at least five years after the date of the first agreement entered into during 2005-06, which is beyond the prescribed period of five years. 7.3 He further submitted that the extended period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endeavoured to bring on record anything as to whether the appellant did provide any other service other than merely agreeing to grant M/s. SFSH or its nominees right to access its branch network and agency force during the period under consideration. Although the consideration appears to be disproportionate, but however, in the absence of any evidence on record, we also cannot go any further. The law as it stood up to the introduction of Negative List did not take under Service Tax the agreement for providing any services and only with effect from 01.07.2012 did such services become taxable. 13. In this connection, it is relevant to refer to some of the judgements referred to during the course of arguments. 14.1 The relevant portion in the case of Commissioner of C.Ex., Meerut-I Vs. M/s. Indian Institute of Petroleum reported in 2008 (12) S.T.R. 113 (Uttarakhand) reads as under : 6. Having heard learned counsel for the parties and after going through the record, we are clear about the fact that the letter of intent was issued by NRL to IIP (respondent assessee) much before the Scientific and Technical Consultancy was brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above decisions. 14.3 The common takeaway from these decisions is that the scope of Business Support Service would include only such specific activities which are rendered by the service provider to promote or market to the customers and hence, merely agreeing to grant the right to access as in this case, as per agreement, would not form part of the exclusive definition of Business Support Service . 15. In view of the above discussions, we are of the considered opinion that the liability has been wrongly fastened under Business Support Service. Firstly, the definition of Business Support Service did not cover mere agreeing to grant right to access, which was introduced only with effect from 01.07.2012 and secondly, even on limitation, the Revenue has not been able to establish the suppression in any manner. 16.1 Let us look at the salient features in this regard vis- -vis the settled position of law. The demand for the extended period can be issued and confirmed only in cases where the non-payment of tax is by reason of fraud/collusion/wilful mis-statement/suppression of facts/contravention of any statutory provision with an intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowledge of the Revenue. Accordingly, the pre-conditions for applicability of the proviso to Section 73 (1) ibid. cannot be said to be met. In such eventuality, the extended period of limitation cannot be invoked and the demand to be confined to the normal period of one year. 17.3 In one of the decisions of the Co-ordinate Bench of New Delhi in the case of M/s. Amway India Enterprises Pvt. Ltd. Vs. Commissioner of C.Ex., New Delhi reported in 2017 (3) G.S.T.L. 69 (Tri. Del.), the Ld. Bench while analysing the applicability of larger period in a more or less similar set of facts, has held that the larger period could not have been invoked. The relevant portion of the findings reads as under : 8. In context with issuance of show cause notice, where there is no involvement of suppression on the part of the assessee, the Hon ble Supreme Court in the case of Pragathi Concrete Products Ltd. (supra) have held that extended period of limitation not to be invoked where the show cause notice was issued in 2000 for the period from 1995-1999 as no case of suppression could be made out when the Department had conducted several audits of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be invoked. In the case of Chemphar Drugs Liniments (supra), it has been held by the Hon ble Supreme Court that when the Department had full knowledge and the assessee s non-disclosure was based on its interpretation of the law, the extended period of limitation could not have been invoked. 9. The judgments of Hon ble Supreme Court and High Courts relied upon by the Revenue are distinguishable from the facts of the present case, inasmuch as the assessees in those cases were indulged in suppression, misstatement, fraud, collusion, etc., with intent to evade payment of duty and only on the basis of proceedings initiated by the Department, the desired information/particulars were furnished. In such circumstances, it has been held by the judicial forums that once it is established that pre-conditions of the proviso to Section 73(1) ibid/Section 11A ibid (i.e. fraud, suppression, collusion, wilful misstatement and contravention of any provisions with an intent to evade payment of tax), stand satisfied, then it becomes necessary to determine the date from which the extended period should be computed; and in such eventuality, the extended period of limitation s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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