Limitation barred service tax demand on transaction fees and turnover charges amid conflicting taxability positions.

Service tax demand on transaction fees and turnover charges was held unsustainable because the notice was issued beyond the normal limitation period. The record showed genuine confusion on taxability: an earlier view had treated such charges as not liable to service tax, while a later circular clarified their inclusion in taxable value. The Tribunal also noted that no service tax would arise where the assessee acted as a pure agent under Rule 5(2) of the Service Tax (Valuation) Rules, 2006. In these circumstances, the extended period was not available and the demand failed on limitation.

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Issues: Whether the service tax demand on transaction fee and turnover charges could be sustained when the proceedings were initiated beyond the normal period of limitation.

Analysis: The levy on transaction fees was treated as contentious, and the Tribunal noted that an earlier view had held such charges not liable to service tax. It also noted the Board's circular dated 17.09.2010 clarifying inclusion of such charges in taxable value, while recognising that no service tax would arise where the assessee acted as a pure agent under Rule 5(2) of the Service Tax (Valuation) Rules, 2006. In these circumstances, the record showed confusion on taxability, and the notice was issued after the normal limitation period.

Conclusion: The demand could not be sustained on limitation and the appeal was allowed in favour of the appellant.

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