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2022 (3) TMI 593 - AT - Service TaxNature of activity - service or not - business support services or not - Instalation of fixed facilities in the premise of customer/buyer - uninterrupted supply of gas - prior to 01.07.2012 - cum-duty benefit is available to the assessee or not - invocation of extended period of limitation - penalty - HELD THAT:- In the present case, it is an admitted fact that the appellant assessee is engaged in the manufacture and sale of oxygen gases. They have entered into agreement with customer/buyer for sale of such industrial gases and as per the agreement the Appellant assessee have to ensure uninterrupted supply of gas in the factory of the customer/buyer for which they have installed fixed facilities in the premise of customer/buyer. Thus in the present case the Appellant assessee has not undertaken any service activity for the customer/buyer by installing fixed facilities. Therefore, no question of outsourcing of any activity by the customer/buyer to the Appellant assessee arises in this case. Thus, charges received by the Appellant-assessee in respect of fixed facility are outside the preview of the Business Support Services. To fall within the ambit of Business Support Services it is essential that activity should be supportive to the main activity undertaken by the client. Where as in the present case, the activity of installing and maintaining fixed facility undertaken by the Appellantassessee for supplying oxygen gas manufactured by it to the buyer/client. Thus, in this case the fixed facility installed by the Appellant-assessee is used by the Appellant-assessee itself and it is in no way construed as supporting activity for the buyer/client of the Appellant-assessee. Given this, fixed charges received by the Appellant-assessee from the buyer/client cease to fall within the ambit of business support services. Therefore, demand of service tax confirmed by the Ld. Adjudicating Authority is not sustainable and is liable to be set aside. In the present case it is admitted by the Department that the Appellant assessee has not charged service tax separately from the client. Given this, the service tax should have been computed backward by treating the total receipts as inclusive of service tax. Extended period of limitation - HELD THAT:- The Appellant has not discharged service tax on the fixed facility charges being of bonafide belief that the said fixed facility is installed for the Appellant's use and benefit and they are not providing any service to the client and the activity of installing and maintaining fixed facilities for supplying of oxygen to the client do not fall under any category of service defined during the period prior to 01.07.2012 i.e. before introduction of negative list. Further, after introduction of the Negative list as the scope of service was much widened, the Appellant started paying service tax after 01.04.2012 - the demand of service tax confirmed by the Ld. Adjudicating Authority by invoking extended period is not sustainable and liable to be set aside. It is held in plethora of judgments that where the facts were in the knowledge of the Department, in such situation, extended period cannot be invoked. In case of MAHESHWARI MILLS LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [2003 (12) TMI 390 - CESTAT, NEW DELHI] the Tribunal has held that suppression of fact cannot be alleged when facts were within the knowledge of the department. Penalty - HELD THAT:- The ingredients for invocation of extended period of limitation under Section 73(1) of the Act and imposition of penalty under Section 78 of the Act are identical. Once the extended period of limitation cannot be invoked in the facts of the present case, there is no question of imposition of any penalty under Section 78 of the Act. Appeal dismissed - decided against Revenue.
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