TMI Blog2011 (2) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... arthikeyan, J. REPRESENTED BY : Ms. Sudha Koka, SDR, for the Appellant. Shri S. Raghu, Advocate, for the Respondent. [Order]. This is an appeal filed by the Revenue. Respondent M/s. Abharan Motors Pvt. Ltd. Udupi (AMPL for short) are a dealer in Maruti vehicles and an Authorized Service Station for Maruti vehicles. The respondents were found to have rendered services classifiable under Business Auxiliary Services (BAS) and Authorized Service Station (ASS) during the period July 2001 to March 2006 without following statutory formalities including payment of Service Tax due. M/s. Maruti Udyog Ltd. (MUL) had a tie up with Non Banking Finance Companies and Insurance Companies for providing respectively loans and vehicle in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing of the department in August 2005 and show cause notice was issued in June 2006. He found that the department was aware of the transactions, the taxable value and the tax involved and not paid by the assessee for the period from July 2001 to June 2004, in 2004. Yet the notice was issued only in June 2006. The assessee had paid the Service tax found due from them prior to the issue of show cause notice. The Commissioner restricted the demand to one year period finding that no case of suppression of facts etc. was made out against the assessee to invoke larger period of limitation. In taking this view, he followed the Apex Court s decision in the case of M/s. Nizam Sugar Factory as reported in 2008 (9) S.T.R. 314 (S.C.) = 2006 (197) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s [2009 (238) E.L.T. 3 (S.C.)]. As per these judgments, an assessee who evaded excise duty by fraud, wilful misstatement, suppression of facts etc. was liable for equal amount of penalty under Section 11AC of the Central Excise Act. Payment of duty due prior to issue of show cause notice did not absolve the assessee from the penal liability u/s 11AC. The provisions of Section 78 of the Act are pari materia Section 11AC of the Central Excise Act. The ratio of these judgments clearly applied to cases of evasion of service tax. It was settled that when Service tax was found due from a person for any past period, arrears could be recovered along with applicable interest. Provisions of Section 75 of the Act enabled recovery of interest in such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings in the impugned order : The appellants have made a strong case on account of time bar. I find that suppression of taxable value was noticed by Audit in October 2004. A copy of the relevant Audit Report has been made available vide letter dated 7-3-2007 of Central Excise Udupi Division and is now placed on record. I find department did not make a serious effort to follow it up and issue demand notices in time for recovery. Correspondence between Range Superintendent and the appellants subsequent to audit did not result in issue of show cause notices. The Preventive Branch took up the investigation in August 2005 and a show cause notice was issued only in June 2006 demanding evaded duty up to March 2006. From the worksheet attach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is liable to pay interest for the delay in paying the tax. As regards the liability to Service tax on the mandatory services rendered by the assessee as a dealer and authorized service station of Maruti vehicles, there was confusion among the trade for a long time and the same was clarified by the CBEC in 2006 by issue of Circular 87/05/2006-S.T., dated 6-11-2006. In the circumstances, it would appear that the assessee had justifiably held the bona fide belief that no Service tax was payable on the ASS on the value of free services rendered to customers of Maruti vehicles for the reason that the said amounts had formed part of the value of the vehicle and had suffered excise duty, as submitted by the ld. Counsel. As regards th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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