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2022 (2) TMI 1009 - AT - Service TaxDemand of service tax - Extended period of limitation - charges received by the appellant from its members - principle of mutuality of interest - HELD THAT:- The appellants are a body constituted by the Karnataka Government to supervise, coordinate the functions of various cooperative milk unions operating at various districts of the State. The appellants are registered under Karnataka Cooperative Societies Act. On going through the objectives of the Federation, we find that KMF is a cooperative apex body in the state of Karnataka representing organisations of milk producers and implementing all round diary development activities and the organisation is three tyred and structured on cooperative principles i.e., dairy cooperative societies at grassroot levels, cooperative milk unions at the district level and federation at the state level, thus it is very clear from the statement of objectives that the appellants are part of the federation. Any activity undertaken by the appellants is to be seen to be in the direction of benefit of its members i.e., themselves. The appellants are registered cooperative society and any such activity rendered by them to their member societies is a service to themselves and there is no service provider – service receiver relationship between the members of the same organisation. The issue before us is squarely covered in favour of the appellants in view of decision in the case of M/S CHIPLUN NAGARI SAHAKARI PATSANSTHA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND VICE-VERSA [2015 (10) TMI 1857 - CESTAT MUMBAI] where it was held that Section 65(25a), Section 65(105)(zzze) and Section 66 of the Finance (No. 2) Act, 1994 as incorporated/amended by the Finance Act, 2005 to the extent that the said provisions purport to levy Service Tax in respect of services purportedly provided by the petitioner club to its members, to be ultra vires. Learned AR places reliance on Kaira District [2002 (11) TMI 97 - SUPREME COURT] the issue discussed therein was whether the apex body and the cooperative societies are related persons within the meaning of Section 4(4)(c) of Central Excise Act, 1944. Therefore, it is very clear that the ratio is clearly distinguishable on facts itself. Therefore, the demand of service tax does not survive on merits. Time Limitation - HELD THAT:- The department instead of giving clarification have decided to investigate the matter after two years and issued show-cause notice after further two years. In place of invoking extended period in cases of suppression of fact with an intent to evade payment of duty or tax, it is found that the department chose to invoke extended period in a case where the appellant has proactively informed the department about their activities and sought clarification. The Revenue had no case to invoke the extended period to issue show-cause notice - the impugned order does not survive on limitation either. Refund of Service Tax - tax paid under a mistake of law - applicability of time limit under Section 11B of CEA - HELD THAT:- the learned Commissioner (A) has not rejected the refund claim on this count. The only ground of rejection appears to be the contention that the refund application is premature as the main issue is pending before the Commissioner for a decision. In view of the same, we find that the Revenue objection is not relevant. Appeal allowed - decided in favor of appellant.
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