Tribunal allows appeal, setting aside service tax demand. No penalty imposed. Appellant's tax liability discharged on time.

The tribunal allowed the appeal, setting aside the demand for recovery of allegedly short-paid service tax for the disputed period. It was determined that the appellant had discharged the tax liability within the proper timeframe, despite confusion in the issuance of the show cause notice. The tribunal also ruled out the imposition of penalty, citing confusion surrounding tax liability and concluding that the Department could not invoke the extended period of limitation. The appeal was allowed for verification of payments made by the appellant within the normal one-year period.

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Issues:
1. Recovery of allegedly short-paid service tax.
2. Appellant contesting tax liability for the disputed period.
3. Imposition of penalty by the Department.

Analysis:
1. The Department observed that the appellant collected service tax at the full rate from customers but deposited only the differential service tax after deducting the amount paid to other air travel agents. A show cause notice (SCN) was issued proposing the recovery of service tax, which was confirmed by the original adjudicating authority. The Commissioner (Appeals) partially allowed the appeal, reducing the amount of service tax. The appellant argued that a prior SCN had been served, and the impugned SCN was issued due to confusion. The appellant maintained that the tax liability for the disputed period had been discharged within the proper timeframe, even though the format for providing details did not mention the tax paid. The tribunal noted that the documents provided by the appellant prove the discharge of liability, and the demand confirmed was set aside.

2. The tribunal considered the confusion regarding the appellant's tax liability for the disputed period. The appellant contended that the tax liability had been clarified as per a TRU letter, and the amount had been paid on time with regular filing of returns. The range superintendent's letter, which caused confusion, did not request details of tax paid by the appellant. The tribunal emphasized the need to verify the documents provided by the appellant to prove the discharge of liability for the disputed period. It was concluded that the demand beyond the normal period of limitation was barred by time, and the imposition of penalty was set aside.

3. Regarding the imposition of penalty, the tribunal noted that a prior SCN had been served on the appellant, indicating that the Department was aware of the situation. The tribunal highlighted the confusion prevalent about the taxability of ticket booking agents using the Central Reservation System. Citing existing judgments, it was concluded that the confusion could not be seen as an intention to evade duty. The tribunal held that the Department was not entitled to invoke the extended period of limitation and set aside the penalty. The adjudicating authority was directed to verify the payments made by the appellant for the normal period of one year. The appeal was allowed for this limited purpose.

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