Court dismisses appeal under Section 35G of Central Excise Act, 1944 on recovery of service tax.

The court dismissed the appeal under Section 35G of the Central Excise Act, 1944, regarding the recovery of service tax for transport activity. The court held that the extended period of limitation was not applicable as the assessee's interpretation of the cargo handling contract with M/s. Manganese Ore India Limited was considered bona fide, indicating no intention to evade tax. The court emphasized the importance of establishing intent to evade tax for invoking the extended period of limitation, which was not proven in this case.

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Issues:
1. Whether the extended period of limitation should be invoked for recovery of service tax.
2. Whether the assessee is entitled to exoneration from the extended period of limitation due to non-wilful supply of information.

Analysis:
1. The appeal under Section 35G of the Central Excise Act, 1944 arose from an order by the CESTAT regarding the recovery of service tax for transport activity. The Revenue contended that the extended period of limitation should have been invoked by the Commissioner to recover the service tax. The CESTAT upheld the decision against the Revenue, stating that the cargo handling activity was subject to interpretation, hence the extended period was not applicable.

2. The Finance Act, 1994 allows a period of twelve months for service tax recovery, but if the tax remains unpaid due to contravention, a five-year period applies. The Revenue argued for invoking the extended period since the service tax was not paid. However, the assessee cited a Supreme Court judgment stating that non-furnishing or suppression of information is not a substantial legal question. The assessee's interpretation of the cargo handling contract with M/s. Manganese Ore India Limited was considered bona fide, indicating no intention to evade tax, thus not warranting the extended period.

3. The Court found that the interpretation of the cargo handling contract was genuine and not an attempt to avoid service tax payment. As there were no substantial legal questions involved, the appeal was dismissed. The judgment highlighted the importance of intention to evade tax for invoking the extended period of limitation, which was not established in this case.

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