Airport parking services treated as taxable airport service, with suppression sustaining extended limitation and penalty.

Parking facility services at airports were treated as airport service under the Finance Act, 1994 because the assessee provided car and scooter parking under an agreement with the Airports Authority of India and received consideration during the disputed period. Non-payment of service tax and failure to disclose the activity to the Department were held to amount to suppression with intent to evade tax, so the extended period under section 73 was upheld. On penalty, once suppression was established, no reasonable cause for non-payment was found; penalty under section 78 was therefore attracted and waiver under section 80 was denied.

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Issues: (i) Whether the demand of service tax on management of car and scooter parking facilities at airports was sustainable, including invocation of the extended period of limitation; (ii) Whether penalty was leviable and the benefit of waiver under section 80 was available.

Issue (i): Whether the demand of service tax on management of car and scooter parking facilities at airports was sustainable, including invocation of the extended period of limitation.

Analysis: The service was held to fall within airport service under section 65(105)(zzm) of the Finance Act, 1994, as the assessee was providing parking facility services at the airport under an agreement with the Airports Authority of India. The assessee had received consideration during the disputed period and had not disclosed the taxable activity to the Department. The Court found that non-payment of tax and failure to disclose the material facts constituted suppression with intent to evade tax, attracting the extended period under section 73 of the Finance Act, 1994.

Conclusion: The demand of service tax and invocation of the extended period were upheld against the assessee.

Issue (ii): Whether penalty was leviable and the benefit of waiver under section 80 was available.

Analysis: Once suppression and evasion were found, there could be no reasonable cause for non-payment of tax. The finding of suppression was inconsistent with grant of waiver from penalty. The Court therefore disagreed with the refusal to impose penalty and held that penalty under section 78 of the Finance Act, 1994 was attracted.

Conclusion: Penalty was held leviable and the benefit of section 80 was denied.

Final Conclusion: The assessee's challenge failed, while the Revenue succeeded on the question of penalty, leaving the adjudication in substance in favour of the Revenue.

Ratio Decidendi: Suppression of taxable activity and non-disclosure of material facts justify invocation of the extended period and disentitle the assessee to penalty waiver under section 80.

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