2007 (1) TMI 503

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..... ry in respect of the amounts of tax and penalties, learned counsel submits that the appellants have a strong case on merits as well as on limitation. Learned SDR opposes this claim on the strength of the findings recorded in the impugned order. After considering the submissions, we find that the above demand of tax is in respect of services rendered by the appellants to three other companies, hereinafter referred to as "the companies", under agreements entered into between the appellants and the companies, during the above period. After a perusal of these agreements, we note that the companies were into the business of giving loans for commercial vehicles and accepting deposits/ debentures and the appellants were to provide misce .....

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..... auxiliary service" to the companies. Learned counsel has also claimed a strong case on the ground of time bar. The show cause notice in this case was issued on May 2, 2006 under section 73 of the Finance Act, 1994 for demanding service tax for the period April 1, 2004 to September 9, 2004. The normal period of limitation under section 73 is one year. The extended period of limitation could be invoked only in a case where suppression of material facts was found against the party. According to the appellants, they did not suppress any material fact inasmuch as they were filing their returns from time to time during the period of dispute and the relevant facts were being verified by the authorities. This claim is also contested by learned .....

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..... services" to the companies on the strength of the terms and conditions of the agreements. They ought to have furnished these agreements to the department at least at the time when, upon receipt of the returns, the assessing authorities were into verification of the records. This did not happen. Apparently, the conduct of the appellants can be termed "suppression" of the kind envisaged under section 73 of the Finance Act, 1994. We have not found prima facie case for the appellants either on merits or on limitation. They should deposit a reasonable part of the tax demanded by the Commissioner. At this stage, learned counsel, under instructions, volunteers to deposit 10 per cent of the tax demanded. Learned SDR would like to h .....

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