TMI Blog2014 (4) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice' and not under ‘Business Support Service'. Extended period of limitation - Held that:- Appellant did not declare the activity to the Revenue authorities during the relevant period and filed the returns only in October 2006. Only from the returns filed in October 2006, the Revenue came to know about the activity under taken by the appellant. The show-cause notice was issued in June 2007, well within the normal period of one year, from the date of filing returns and, therefore, the demand for the period with effect from 16.6.2005 is clearly sustainable in law. Penalty - As regards the penalty imposed under Sections 76 and 77, as pointed out by the learned A.R. appearing for the Revenue, no mens rea is required to be proved and mere contravention of law would suffice. Therefore the penalties imposed under these sections are sustainable, subject to re-quantification of the amount of the service tax liability from the period w.e.f. 16.06.2005. As regards the penalty imposed under Section 78, it is settled position in law that the said penalty is imposable if any of the elements specified in the said Section i.e. fraud, collusion, suppression, willful mis-statement or contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct these fees and remit the same to the Airport Authority of India. In that sense it is not a service rendered by the appellant but a compulsory activity. He further submits that if the passenger fee collected by the appellant was remitted within a period of 15 days, then the appellant was eligible for a commission and if the payment was made after the period of 15 days, the appellant was liable to pay penal charges and in case the appellant failed to collect the passenger fee, he had to pay the same from his pocket and remit it to the airport authority. From the nature of the payments made and the terms and Conditions for the payments, it cannot be said that he appellant was providing a taxable service during the impugned period. He further submits that with effect from 01.06.2006 when Business Support Services (BSS) was brought under the Tax net, the appellant got themselves registered under the said category and started discharging service tax liability under BSS and the revenue has not disputed such payments made by the appellant. This would imply that prior to 1.6.2006, the appellant was not liable to pay service tax as prior to inception of entry relating to BSS, no service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant to the Airport Authority of India is rightly classified under BAS. 4.1 It is further contended that the explanation only clarifies the position of law as it stood. It does not extend the scope of the service. Therefore, it should be held as retroactive and would apply from the inception of the levy i.e. from 01.07.2003. The learned adjudicating authority has dealt with this matter in detail in para 17 of the order wherein reliance was placed on the decision of the Hon'ble Apex Court in the case of Sulochana Amma v. Narayanan Nair - 1995 (77) ELT 785 (S.C.). Accordingly, he pleads that the order of the adjudicating authority confirming the demand is sustainable in law. 4.2 As regards the invocation of extended period of time, the learned A.R. submits that the appellant had not declared the activity undertaken by them to the department at any point of time and they got registered under Business Support Service only in July 2006. Therefore, the Revenue has rightly invoked the extended period and confirmed the demand. Penalty under Section 76 is for delay in payment of service tax and no mens rea is required to be proved. Similarly, under Section 77 penalty is imposabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that mount to, manufacture' within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944 (1 of 1944) 6.3 An explanation was added to the said definition vide Finance Act, 2005 with effect from 16.06.2005: Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (b) .. (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting authority himself has observed that prior to 10.09.2004, the activity undertaken by the appellant would not come under either sub-clause (iv) or (vii) of the Section 65(19). If that be so, we do not understand as to how the adjudicating authority could have confirmed the demand for the period prior to 10.09.2004 under BAS. We further observe that with effect from 16.6.2005 an Explanation was inserted in Section 65(19) clarifying the scope of commission agent's service mentioned in sub-clause (vii) which starts with the phrase for the removal of doubts, it is hereby declared that . This would imply that prior to 16.06.2005, there were doubts existing about the scope of commission agent's service covered by Section 65(19). Therefore, demands prior to 16.6.2005 cannot be made invoking the extended period of time. With effect from 16.06.2005, the legal position became very clear and nobody could have entertained any doubt about the liability to pay service tax under Commission Agent's Service under BAS. Therefore, the demand for the period from 16.6.2005 onwards is legally sustainable. In the present case we observe that the appellant did not declare the activity to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
