2023 (5) TMI 656 - AT - Service Tax

Levy of service tax - business auxiliary service - invocation of extended period of limitation contemplated under section 73(1) of the Finance Act, 1994 - penalty - HELD THAT:- The issue decided in the case of M/S TEAM HR SERVICES LTD. VERSUS CST, DELHI [2018 (2) TMI 1680 - CESTAT NEW DELHI] where it was held that we have no doubt that the appellant did market the services provided by the client bank. It will not be correct to state that the appellant only provided operational assistance in such marketing. No such words were used in the terms of the agreement and in fact the agreement directly refers to the appellant as a service provider “to mark its products (ICICI Bank)” and the appellants are in fact engaged in promotion and marketing activity of the financial products of the client bank.

The aforesaid decision of the Tribunal was confirmed by the Delhi High Court in the appeal filed by the Department in COMMISSIONER OF CENTRAL TAX GST DELHI EAST VERSUS TEAM HR SERVICES LTD. [2018 (10) TMI 406 - DELHI HIGH COURT]. The observations made by the Delhi High Court dismissing the appeal filed by the Department against that part of the order of the Tribunal holding that the extended period of limitation could not have been invoked.

In view of the aforesaid decision of the Tribunal and the Delhi High Court, it has to be held that extended period of limitation could not have been invoked. As the entire demand is for the extended period of limitation, the order passed by the Commissioner holding that the extended period of limitation was correctly invoked deserves to be set aside and is set aside. The imposition of penalty also deserves to be set aside and is set aside.

Appeal allowed.