2014 (1) TMI 203 - AT - Service Tax

Appeal allowed: Time-barred claim dismissed for lack of intent to evade tax. Interpreting 'commercial concern' for Service Tax.

M/s Vipra Enterprises Versus CST Ahmedabad

The appellant's appeal was allowed as time-barred since the extended period cannot be invoked when there is no intention to evade Service Tax. The ... Demand of service tax - Business Auxiliary Service - Invokation of extended period of limitation - Bar of limitation - Held that:- extended period cannot be invoked in the present proceedings, because there was a bonafide view, as per CBEC circular and various judicial pronouncements that the word ‘commercial concern’ did not include the services provided by the individuals or proprietary concern. The word ‘commercial concern’ under Section 65(105)(zzb) of Finance Act, 1994 was substituted with the word ‘Any person’ with effect from 01.05.2006. Appellant started paying Service Tax after availing the admissible value based exemption. Even services rendered prior to 01.05.2008 and amount received after 01.05.2006 was not required to be charged to Service Tax. Under the above facts and circumstances, no suppression or mis-statement with intention to evade payment of Service Tax can be attributed on the part of the appellant - Therefore, extended period of five years cannot be invoked - Decided in favour of assessee. Issues Involved:Whether a proprietary concern can be considered a commercial unit for charging Service Tax under 'Business Auxiliary Service' (BAS).Analysis:The appellant contested the demand for Service Tax, arguing that the extended period cannot be invoked due to the belief that the term 'commercial concern' did not cover services provided by individuals or proprietary concerns before 01.05.2006. They relied on CBEC circulars and judicial pronouncements to support their stance. The appellant started paying Service Tax after availing exemptions and argued that services rendered before 01.05.2006 were not taxable. The appellant claimed there was no intention to evade tax, citing precedents like Triveni Engg. Works Ltd and Garden Silk Mills Ltd cases. The CESTAT and Gujarat High Court had previously held that the extended period cannot be invoked in similar circumstances.The Revenue defended the first appellate authority's order and referred to the judgment in the case of CCE Jaipur Vs R.S. Financial Services. The appellant did not contest the issue on merits but challenged the demand based on the belief prevalent before 01.05.2006 that 'commercial concern' did not include services by individuals or proprietary concerns. The term 'commercial concern' was replaced with 'Any person' in the Finance Act, 2006. The appellant argued that no suppression or misstatement was made to evade Service Tax, relying on previous judgments like Triveni Engg. Works Ltd and Garden Silk Mills Ltd cases. The appellant's appeal was allowed as time-barred, following the precedent that the extended period cannot be invoked when there is no intention to evade Service Tax.The judgment highlights the interpretation of the term 'commercial concern' for charging Service Tax under Business Auxiliary Service. It emphasizes the historical context before the amendment in 2006 and the reliance on CBEC circulars and judicial precedents to support the appellant's position. The decision underscores the importance of considering the evolving legal landscape and prior rulings when determining tax liabilities, ultimately leading to the allowance of the appeal on the grounds of being time-barred.