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of <h1>Appellant's Service Tax Demand Limited under STGS Classification</h1> <h3>M/s Escorts Limited Versus CST, New Delhi</h3> M/s Escorts Limited Versus CST, New Delhi - TMI Issues Involved:1. Classification of the service provided by the appellant.2. Applicability of the extended period of limitation for raising service tax demand.3. Validity of the service tax demand beyond the normal time limit under the second show cause notice.Issue-wise Detailed Analysis:1. Classification of the Service Provided by the Appellant:The central issue in this case is whether the appellant's activity of providing helicopter services falls under 'Supply of Tangible Goods Service' (STGS) under Section 65(105)(zzzzj) or 'Transportation of Passengers by Air' under Section 65(105)(zzzo) of the Finance Act, 1994. The appellant contended that their services should be classified under 'Transport of Passenger by Air Service' since they provided non-scheduled air transport services. However, the Department argued and the lower authorities concurred that the services fall under STGS because the helicopters were chartered out with the crew, and the effective control and possession remained with the appellant. The Tribunal upheld this view, referencing a similar case, Global Vectra Helicorp Ltd. vs. CC (Import) Mumbai, where it was determined that such services should be classified under STGS. The Tribunal emphasized that the appellant provided the entire helicopter on hire, not individual seats, and the control remained with the appellant, aligning with the characteristics of STGS.2. Applicability of the Extended Period of Limitation:The appellant challenged the invocation of the extended period of limitation under Section 73 for the service tax demand covering May 2008 to March 2010. The original authority justified the extended period, and the appellate authority upheld this view. The Tribunal agreed, noting that the extended period was rightfully invoked due to the nature of the case involving classification issues and the appellant's failure to pay the appropriate service tax under the correct category.3. Validity of the Service Tax Demand Beyond the Normal Time Limit:The second show cause notice dated 24.04.2012 covered the period April 2010 to March 2011. The Tribunal noted that the normal time limit for raising service tax demand was one year at the relevant time (up to 28.05.2012). Consequently, any demand falling beyond this one-year period under the second show cause notice was not sustainable and was set aside by the Tribunal.Conclusion:The Tribunal classified the appellant’s service under STGS and upheld the service tax demand on merit. However, it restricted the demand to one year for the show cause notice dated 24.04.2012, setting aside any demand beyond this period. The appeal was disposed of accordingly.
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