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2023 (10) TMI 1254 - AT - Service TaxRecovery of service tax alongwith interest and penalty - failure to discharge tax on guarantee commission under reverse charge mechanism - non-declaration of the said guarantee commission in the periodical ST-3 returns filed - period prior to 01.04.2016 - invocation of extended period of limitation - penalties - HELD THAT:- There are no merit in the argument of the appellant, in as much as reading the definition of “ service” and “support service” in juxtaposition, it is clear that the said definition of ‘support service’ is exhaustive and takes in its fold all activities of infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract etc. - the appellant is liable to discharge service tax on the Guarantee commission paid to Government of Karnataka during the period 01.07.2012 to 31.03.2016 for providing unconditional and irrevocable guarantee in raising funds from the debt market. Extended period of limitation - HELD THAT:- The extended period of limitation could be invoked only when evidence collected lead to an inference that there has been fraud, collusion, suppression, misdeclaration or contravention of any of the provisions with intent to evade payment of duty. In the present case, the Department has failed to place on record evidence indicating that there has been intention not to discharge service tax on the guarantee commission even though the appellant has been aware of the legal position that service tax is payable on guarantee commission paid to the State government of Karnataka for providing irrevocable guarantee in raising funds from debt market. Moreover, the appellant is a public sector undertaking and in the absence of specific evidence to support that there has been intentional evasion of service tax, extended period cannot be invoked merely on finding the failure on their part to discharge service tax. The demand is confirmed for the normal period of limitation with interest. Penalties imposed are set aside - Appeal disposed off.
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