Space provided in Authorised service station to various financial institutions - demand raised by invoking larger period of limitation

PJ/Case Laws/2011-12/1280

Case: M/s AADISHWAR MOTORS PVT LTD Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Citation: 2011-TIOL-428-CESTAT-AHM

Issue: - Space provided in Authorised service station to various financial institutions – demand raised by invoking larger period of limitation – no mala fide intention or intent to evade duty – larger period of limitation cannot be invoked.

Brief facts:- Appellant are authorized service station. They had given space in their premises to various financial institutions. It was alleged that they had provided service to various financial institutions and service tax was payable under Business Auxiliary services. Appellant is challenging the impugned order.

Appellant’s Contention: Appellants submits that the show cause notice issued on 10.08.2007 for the period July 2003 to Dec 2005 is barred by limitation.

Appellant draws attention to the Board Circular No. 87/05/2006-ST dated 06.11.2006, wherein by taking note of the fact that there were certain doubts in respect of the activities undertaken by various motor vehicle dealers and service stations, the Board has observed that such promoting market of such financial institutions by the Automobile dealers would be covered under business auxiliary services. The said circular was taken note of by the Tribunal in the case of Maheshwari Bajaj vs. CCE, Rajkot [2010 (19) STR 905 (Tri. Ahmd.)]and the demand was held to be barred by limitation.

Respondent’s Contention: - Revenue submits that the appellant never approached the Revenue for clarification and it was only as a result of investigations conducted by the department that the activities of providing business auxiliary services came to the notice of the department.

Reasoning of the Judgment: - The Tribunal found that as observed in the Board circular, there were doubts in the field as regards such activities being chargeable to service tax. If that be so, no malafide can be attributed to the appellants with intent to evade payment of duty. Mere non-approaching the department or non seeking of clarification, by itself cannot be made a ground for invocation of longer period of limitation, unless the same is associated with a willful intent to evade payment of duty. The Tribunal has also taken note of the said circular in the relied upon decision of M/s. Maheshwari Bajaj. It was held that the demand raised beyond the normal period of limitation against the appellant is clearly barred by limitation. Impugned order set aside.

Decision:- Appeal allowed with consequential relief.

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PJ/Case Laws/2011-12/1280

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