2017 (11) TMI 348 - AT - Service Tax

CESTAT Kolkata Upholds Commissioner's Order on Service Tax for Leased Circuit Service

The Appellate Tribunal CESTAT KOLKATA upheld the Commissioner's order regarding non-payment of service tax for Leased Circuit service. Despite ... Validity of SCN - Time limitation - Held that: - the SCN was issued after a period of 5 years - the Adjudicating Authority has followed the Circular No. 58/2003, dated 20-5-2003. When it is so then we find no need to interfere with the impugned order and the same is sustained. The observations of adjudicating authority on Section 11D is not correct as Section 11D does not provide any rigid time limit. However, show cause notice under Section 11D has to be issued within reasonable period - appeal dismissed - decided against Revenue. Issues:Appeal against Order-in-Original No. 02/ST/ADJ/COMMR/DIB/11 dated 31-3-2011 - Non-payment of service tax for Leased Circuit service - Application of Circular No. 58/2003 - Applicability of Section 11D of the Central Excise Act, 1944.Analysis:The judgment by the Appellate Tribunal CESTAT KOLKATA pertains to two appeals filed by the Department against a common order dated 31-3-2011. The Commissioner's observation was crucial, stating that service tax was paid for Telephone Service but not separately for Leased Circuit service, following Circular No. 58/2003. The Commissioner also noted that Section 11D of the Central Excise Act, 1944 has a time limitation of one year. However, the Tribunal found no need to interfere with the order, as the Circular was correctly applied. The Tribunal disagreed with the Commissioner on the interpretation of Section 11D, mentioning that it does not specify a rigid time limit, citing a case from the Gujarat High Court. Despite this, the Tribunal upheld the Commissioner's order, finding no fault even without considering the Section 11D issue.The Tribunal highlighted that the show cause notice in this case was issued after a significant period of 5 years. Although there was a discrepancy in the Commissioner's understanding of Section 11D, the Tribunal emphasized the importance of issuing such notices within a reasonable time frame, as established by previous legal precedents. Despite the disagreement on Section 11D, the Tribunal ultimately upheld the Commissioner's decision, dismissing both appeals filed by the Department and disposing of the cross objection. The judgment was dictated and pronounced in open court, providing a clear resolution to the issues raised in the appeals.