2023 (5) TMI 567 - AT - Service Tax

Non-payment of Service Tax - Business Auxiliary Service - receiving service of foreign agents - section 66 A of the Finance Act, 1994 read with Section 65 (19) of the Finance Act, 1994 and Section 65 (105) (zzb) of the said act - extended period of limitation - Suppression of facts or not - HELD THAT:- The show cause notice should have been issued during the normal period of demand as show cause notice dated 17.03.2008 has already been issued under the provision of Section 73 (1) of the Finance Act, 1994 alleging suppression of facts with intention to evade payment of service tax and invoking larger period of demand.

Tribunal in the case of M/S. MARCK BIOSCIENCE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, AHMEDABAD [2019 (7) TMI 653 - CESTAT AHMEDABAD] held that in case of sales commission to overseas commission agent under reverse charge mechanism, the extended time proviso is not invokable.

With regard to the second show cause notice dated 20.03.2009 where under the adjudicating authority has confirmed the demand of Rs. 10,96,848/- also invoking relevant penal provision. In this regard, that show cause notice has been issued on 20.03.2009 demanding the duty for the period April, 2007 to March, 2008 by invoking larger period of limitation under Section 73 (1) of the Finance Act, 1994. Since the first show cause notice has already been issued on 17.03.2008 invoking a period of five years and therefore, the second show cause notice should have been for normal period of demand and department should not have invoked the extended time period for demanding service tax.

The second show cause notice dated 20.03.2009 is beyond normal period of limitation and therefore, the matter is remanded back to the original adjudicating authority to re-adjudicate the matter and confirm the service tax for the normal period of demand as provided under Section 73 (1) of the Finance Act, 1994.

Appeal allowed in part.