2018 (8) TMI 420 - AT - Service Tax

Tribunal Confirms Service Tax Demands, Penalties Set Aside

M/s Wave Infratech Pvt. Ltd. Versus Commissioner of Central Excise & S.T., Lucknow

M/s Wave Infratech Pvt. Ltd. Versus Commissioner of Central Excise & S.T., Lucknow - TMI Issues Involved:1. Demand under Advertising Agency Services.2. Demand under Renting of Immovable Property.3. Demand under Rule 6(3) of Cenvat Credit Rules.4. Imposition of penalties.5. Invocation of extended period of limitation.Detailed Analysis:1. Demand under Advertising Agency Services:The demand of Rs. 8,75,135/- was confirmed towards Advertising Agency Services for the period 2007-08 to 2010-11. The appellant argued that the show cause notice was vague and did not specify how the services rendered fell under 'Advertising Agency Services'. They contended that the activity amounted to 'Sale of Advertising Space,' which was not taxable during the relevant period. The Tribunal acknowledged the confusion in the field and the lack of clear allegations in the show cause notice. Despite the appellant not challenging the service tax confirmation, the penalty was set aside due to the incorrect categorization and the invocation of the extended period of limitation.2. Demand under Renting of Immovable Property:A demand of Rs. 92,20,054/- was confirmed under the category of Renting of Immovable Property. The appellant argued that the show cause notice initially raised a demand for Rs. 43,67,983/- for two years without proposing tax for 2007-08 and 2008-09. They contended that there was confusion regarding the taxability of rental income during the relevant period, as supported by Tribunal decisions. The appellant had paid the entire service tax along with interest and challenged only the penalty. The Tribunal found that the confusion in the field justified a bona fide belief on the part of the assessee, leading to the setting aside of the penalty while confirming the demand.3. Demand under Rule 6(3) of Cenvat Credit Rules:A demand of Rs. 2,12,77,262/- was confirmed under Rule 6(3) of the Cenvat Credit Rules. The appellant argued that the activities in question (sharing of film revenue, sale of eatables, and parking charges) did not constitute 'services' and thus could not be classified as 'exempt services'. The Tribunal agreed, citing various judgments and Board circulars that supported the appellant's contention. It was held that the demand was unsustainable as the activities did not fall within the realm of service, and Rule 6(3) was not applicable. The Tribunal also noted that the demand was barred by limitation due to the lack of evidence of suppression or misstatement by the appellant.4. Imposition of Penalties:The appellant challenged the imposition of penalties across various demands. The Tribunal found that the penalties were unjustified due to the confusion in the field, incorrect categorization of services, and the bona fide belief of the appellant. Consequently, all penalties imposed were set aside.5. Invocation of Extended Period of Limitation:The appellant argued that the show cause notice issued on 11.12.2012 for the period 2007-08 to 2010-11 was beyond the permissible period and lacked evidence of suppression or misstatement. The Tribunal agreed, citing precedents that mere non-description or non-payment of duty does not justify invoking the extended period. The Tribunal concluded that the appellant had maintained proper accounts and disclosed all necessary information, thus the extended period was not applicable.Conclusion:The Tribunal confirmed the service tax demands but set aside all penalties and the demand under Rule 6(3) of the Cenvat Credit Rules. It also ruled that the extended period of limitation was not applicable due to the absence of suppression or misstatement by the appellant. The appeal was disposed of in these terms.