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2025 (5) TMI 938 - AT - Service TaxRectification of mistake under Section 86(6A) of the Finance Act 1994 - Error apparent on the face of record or not - impugned order has failed to consider that the show cause notice had been issued beyond the normal period and was time barred - HELD THAT - In the instant case it is seen that the show cause notice was issued on 19.06.2014 invoking the extending period demanding service tax for the period 1.4.2012 to 31.03.2013. As per the proviso to section 73(1) the demand can be raised for a period of five years from the relevant date. The demand in the instant case was for the period 1.4.2012 to 31.03.2013 raised vide show cause notice dated 19.06.2014. Vide the impugned final order the demand has been upheld for the normal period. There is no error apparent on record. Consequently the instant application stands dismissed.
1. ISSUES PRESENTED and CONSIDERED
- Whether the Tribunal erred in rejecting the appellant's appeal by holding that the Commissioner (Appeals) upheld the demand for service tax for the normal period only, when in fact the show cause notice (SCN) was issued invoking the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994. - Whether the extended period of limitation under the proviso to Section 73(1) could be invoked for issuing the SCN dated 19.06.2014 for the period 01.04.2012 to 30.06.2012, given the limitation timeline. - Whether the Order-in-Appeal dated 30.11.2018 is sustainable in law in light of the limitation period and the Tribunal's earlier order dated 25.05.2017 restricting demands to the normal period only. - Whether there is any apparent error on the face of the record in the impugned order dated 26.07.2024 passed by the Tribunal. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Whether the Tribunal erred in holding that the Commissioner (Appeals) upheld the demand for the normal period only, ignoring the invocation of extended period in the SCN. The appellant contended that the Tribunal failed to consider that the Commissioner (Appeals) upheld the demand under the extended period of limitation and not the normal period. The appellant relied on the Tribunal's earlier order dated 25.05.2017, which held that the extended period under the proviso to Section 73(1) could not be invoked for the appellant's case, thereby restricting demands to the normal period only. The appellant demonstrated that the SCN was issued on 19.06.2014, which was beyond the 18-month normal limitation period ending on 25.04.2014 (18 months from the last date of filing return on 25.10.2012). Therefore, the demand raised for the period 01.04.2012 to 30.06.2012 was time barred if the extended period could not be invoked. The appellant's counsel emphasized that the power to issue SCN is conferred by Section 73(1) of the Finance Act, 1994, which allows issuance within eighteen months from the relevant date, except where the extended period under the proviso applies. The Tribunal noted that the SCN explicitly invoked the extended period under the proviso to Section 73(1), as reflected in the SCN's paragraph 8(i), demanding service tax for the period 01.04.2012 to 31.03.2013 under the extended period. Thus, the Tribunal recognized that the SCN was issued invoking the extended period, contrary to the appellant's submission that the Commissioner (Appeals) upheld the demand only for the normal period. Issue 2: Whether the extended period of limitation under the proviso to Section 73(1) could be invoked for issuing the SCN dated 19.06.2014 for the period 01.04.2012 to 30.06.2012. Section 73(1) of the Finance Act, 1994, provides that the Central Excise Officer may issue a notice within eighteen months from the relevant date for recovery of service tax not levied or paid. The proviso extends this period to five years where the tax was not paid due to fraud, collusion, willful misstatement, suppression of facts, or contravention with intent to evade tax. The relevant date in this case was the last date for filing the return for the disputed period, i.e., 25.10.2012. Therefore, the normal limitation period expired on 25.04.2014. The SCN was issued on 19.06.2014, beyond this date. The Department argued that the SCN was rightly issued invoking the extended period due to suppression of facts by the appellant, as recorded in the SCN. The Tribunal examined the SCN and found that it explicitly invoked the extended period under the proviso to Section 73(1), alleging suppression of facts and demanding service tax accordingly. Thus, the issuance of the SCN beyond the normal period was legally permissible if the conditions for invoking the extended period were satisfied. Issue 3: Whether the Order-in-Appeal dated 30.11.2018 is sustainable in law in light of limitation and the Tribunal's earlier order dated 25.05.2017. The appellant relied on the Tribunal's earlier order dated 25.05.2017, which held that the extended period could not be invoked for the appellant's case and restricted the demand to the normal period only. The appellant argued that the Order-in-Appeal, which upheld the demand, was unsustainable because it ignored this binding precedent and allowed demand under the extended period. However, the Tribunal in the impugned order dated 26.07.2024 rejected the appeal, holding that the Commissioner (Appeals) had upheld the demand for the normal period only, which the appellant disputed. On examination, the Tribunal found no error apparent on the record in the impugned order and noted that the demand was upheld for the normal period following the Supreme Court decision (though the specific Supreme Court decision is not detailed in the text). Therefore, the Tribunal concluded that the Order-in-Appeal was sustainable and that the extended period invocation was justified. Issue 4: Whether there is any apparent error on the face of the record in the impugned order dated 26.07.2024 passed by the Tribunal. The appellant claimed an error apparent on the face of the record because the impugned order failed to consider that the SCN was issued beyond the normal period and was time barred. The Tribunal analyzed the SCN, the limitation provisions, and the submissions of both parties. It found that the SCN was issued invoking the extended period under the proviso to Section 73(1) due to suppression of facts, which legally extended the limitation period to five years. Therefore, the Tribunal held that there was no error apparent on the record in the impugned order and dismissed the application for rectification. 3. SIGNIFICANT HOLDINGS "Therefore M/s Krishi Upaj Mandi Samiti, Sawai Madhopur (Raj.) were called to show cause as to why:- (i) Service Tax amounting Rs.5,74,245/- during the period from 01.04.2012 to 31.03.2013 under the category of "Renting of Immovable Property Service' should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994; (ii) Interest at the appropriate rate should not be recovered from them under Section 75 of the Act ibid on the Service Tax & Education Cess not paid which will be computed till the actual payment of Service Tax: (iii) Penalty should not be imposed upon them under the provisions of Section, 76, 77 and 78 of the Finance Act, 1994 for contravention of provisions of Section 66, 67, 68 and 70 of the Finance Act, 1994 and Rule 4,5,6 & 7 of the Service Tax Rules, 1994." Core principles established include:
Final determinations:
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