2006 (9) TMI 32 - AT - Service Tax

Tribunal Rehearing Emphasizes Proof for Extending Tax Demand Periods

The Tribunal recalled Final Orders setting aside demands for a larger period due to insufficient invocation in the show cause notice. Emphasizing the need ... Demand(Service tax )-Limitation-Alleged that appellant intentionally not filing the service tax return accordingly larger period invokable –After considering all the facts impugned final order recalled by authority Issues:1. Invocation of larger period for demands in show cause notice.Analysis:The Revenue filed ROM Applications against Final Orders that set aside demands for a larger period due to the non-invocation of provisions for the larger period in the show cause notice. The Tribunal considered the grounds in both ROMs together. The Revenue argued that the show cause notice clearly stated the appellants' failure to file returns periodically and their mala fide intention to evade service tax, which should save the limitation period.The learned JDR contended that the show cause notice invoked relevant Sections, making the larger period applicable. However, the learned Counsel argued that merely quoting Sections was insufficient, emphasizing that all necessary ingredients for invoking the larger period, including intentional evasion of duty, must be demonstrated by the Revenue.In response, the learned JDR referred to Sections 73A & B of the Finance Act, stating that the failure to file returns is adequate to indicate demands for up to 5 years under the Service Tax provisions, unlike the criteria in the Central Excise Act or the Customs Act for invoking a larger period. After careful consideration, the Tribunal found the Revenue's point meriting reconsideration. Consequently, both Final Orders were recalled, and the appeals were scheduled for rehearing on a specified date.This judgment highlights the importance of clearly establishing all necessary elements for invoking a larger period in demand cases under the Service Tax provisions. It clarifies that the mere mention of relevant Sections in a show cause notice may not suffice, and the intentional evasion of duty must be substantiated to justify extending the limitation period for demands.