Tribunal Rules in Favor of Taxpayer in Service Tax Dispute

The Tribunal held that the show cause notice issued by the Department for alleged non-payment of Service Tax amounting to Rs. 67,918 was barred by limitation. The Tribunal found that the appellant's refund claim, though initially rejected, was later allowed by the Commissioner (Appeals). Despite the Department's argument that the appellant should have deposited the disputed tax amount, the Tribunal ruled in favor of the appellant, stating that the payment made, even under a wrong Code, should not incur further liabilities. The Tribunal deemed the Department's allegation of suppression of facts unsustainable, ultimately allowing the appeal in favor of the appellant.

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Issues:
1. Allegation of non-payment of Service Tax by the appellant.
2. Discrepancy in the payment of Service Tax amounting to Rs. 67,918.
3. Refund claim filed by the appellant.
4. Barred by limitation - Extended period invoked.
5. Department's contention of suppression of facts by the appellant.

Analysis:
1. The appellant, engaged in providing various services, was alleged to have not discharged its liability of paying Service Tax amounting to Rs. 67,918 for the period 2010-11. The Department observed a discrepancy in the payment against an incorrect Code No. AAOFA 3157 ESP 001, leading to the issuance of a show cause notice.

2. The appellant contended that the Service Tax amount was deposited in the Central Government's account but under a wrong name and Code due to a clerical error. Despite a refund claim initially rejected, the Commissioner (Appeals) later allowed the refund. The appellant requested to consider the refunded amount as payment, but an audit objection was raised, resulting in the show cause notice.

3. The Department argued that even though the appellant was refunded, the responsibility to deposit the disputed Service Tax remained. The Department contended that the mistake was not voluntarily disclosed by the appellant and was revealed only during an audit, justifying the invocation of the extended period for issuing the show cause notice.

4. The Tribunal noted that the appellant was allowed a refund of Rs. 69,119 for the wrongly deposited amount against a different Code. The appellant claimed the refund was to be adjusted against the liability in question, although no evidence of such adjustment was found. The Tribunal observed that the Department was aware of the mistake since 2011, and the show cause notice issued in 2014 was thus held to be barred by limitation.

5. Relying on a previous legal precedent, the Tribunal held that the payment made, even if under a wrong Code, should not result in further liabilities. The Tribunal found the Department's allegation of suppression of facts unsustainable, given that the mistake was known since 2011. Consequently, the show cause notice was deemed unsustainable, and the appeal was allowed in favor of the appellant.

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