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2021 (6) TMI 679 - HC - Service TaxIntent to evade service tax or not - activities during the period 16.07.2001 to 31.03.2005 - advances received during the period 16.06.2005 to 31.12.2005 - justification for invocation of extended period of limitation for demanding of service tax, as contended? - HELD THAT:- The respondent had applied and obtained registration under various categories of services as guided by the authorities of the appellant-Revenue. It is also evident that the authorities, who informed the respondent that its activities would get covered by photography service, scientific or technical constancy service and commercial training and coaching service etc., are guided by Revenue considerations alone and they have not kept in mind the nature of activity undertaken by the respondent- NRSA and area of operation of its activities, apart from the important role it plays in the affairs of this nation. The appellant-Revenue authorities initially directed the respondent-NRSA to obtain registration under the three categories which was duly adhered to by obtaining registration on 14.02.2005. Upon obtaining registration, the appellant-Revenue saddled the respondent-NRSA with the show cause notice for the period prior to registration by invoking the provisions of Section 73(1)(a) of the Finance Act. To justify the action of invocation of extended period of limitation, it has been stated that since, the respondent has been rendering taxable service and failed to observe statutory provisions for registration and payment of service tax, there was suppression of material fact - the Tribunal held that the extended period of limitation cannot be invoked in this case and the demand if any, can only be survived within the normal period of limitation. There is no incentive for the respondent-NRSA to resort to evasion of tax which could result either in the profits soaring higher or any individual being benefited. On the other hand if there existed a liability, the respondent could have factored the same in its budget proposals and sought for release of more funds from the Government to discharge its liability. Thus, it is only flow of funds from one pocket to the other pocket of the Government and would not result in any gain either to the organization or to any individual. In this view of the matter, it is absurd to even suggest that the respondent had suppressed facts with an intent to evade payment of tax, and mulct it with payment of service tax by invoking the extended period of limitation. The focus of the organizations like the respondent-NRSA is definitely not on either resorting to tax evasion or tax planning which would benefit the establishment, but is focused in its core activity of research and assisting the other agencies of Government in various projects. The said fact was completely lost sight by the appellant-Revenue while passing the Order-in-Original, which however, has been rightly taken note by the Tribunal. This court is of the view that in the given facts and circumstances, the Tribunal has given cogent reasons for holding that the extended period of limitation under Section 73(1)(a) of Finance Act, 1994 would not be invocable - the order of the Tribunal waiving all penalties by invoking Section 80 of the Finance Act, is also rightly justified. Appeal dismissed.
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