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2017 (5) TMI 1303 - AT - Service TaxBusiness Auxiliary Service - commission paid to the overseas agents as a consideration for providing marketing services - reverse charge mechanism - Held that: - a purported revenue neutral situation cannot, by any means, mitigate a tax liability of an assessee, which is otherwise payable in view of clear legal position of charging section and the tax entry, found correctly applicable to the assessee. The whole scheme of CENVAT credit as envisaged by the Cenvat Credit Rules, 2004 will become redundant if the proposition of revenue neutrality is invoked for non-payment of service tax or duty on inputs/input services. Such interpretation of law will be against the very basis of value added taxation and leaves the discharge of tax liability to the discretion of the assessee. Extended period of limitation - Held that: - the tax liability under reverse charge basis itself is a new concept and was subjected to various litigations 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.
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