2023 (3) TMI 695 - AT - Service Tax

Extended period of limitation - Non-payment of service tax - translation services received by the appellant from the various individuals taxable with effect from 01.05.2006, under Business Support Services or not - HELD THAT:- The period of dispute is from 2006-07 to 2010-11 and the tax demand was raised under reverse charge mechanism. Hence, when the tax is paid under reverse charge mechanism, the appellant would be entitled to avail credit of the same, which invariably leads to a revenue neutral situation. Thus, there is no scope to allege fraud, suppression, etc., to invoke the extended period of limitation for non-payment of tax.

The demand is possible only for the normal period. The Show Cause Notice in this case having been issued on 08.05.2014, the demand proposed and confirmed for the period prior to October 2009, is barred by limitation.

It is deemed proper to set aside the above demand by agreeing with the contentions of the Learned Consultant for the appellant that the same is hit by limitation - demand for the normal period upheld - matter remanded to the file of the Adjudicating Authority to the limited extent of working out the demand for the normal period.

Penalty under Section 78 and penalty under Section 77 of the Finance Act, 1994 - HELD THAT:- The Revenue has not made out any case of fraud, suppression, etc., and therefore, the impugned order is set aside to this extent of levying penalty under Section 78 ibid. - there are no allegations as to the violation of any of the provisions of Section 77. Hence, the penalty appears to have been imposed mechanically. Further, the Adjudicating Authority has ordered for appropriation of the amount paid including interest and there is no allegation further as to non-registration, etc., by the appellant. Thus, the appellant has made out a case for intervention for invoking the provisions of Section 80 of the Act, as it stood then. Thus, to this extent also, the impugned order stands set aside and the grounds-of-appeal, stand allowed.

The appeal filed by the assessee allowed in part and part matter on remand.