Court rules appellant not liable for 'business auxiliary service' tax, limits revenue collection to 6 months pre-notice.

The court held that the appellant's activity did not constitute 'business auxiliary service' for service tax purposes. The invocation of the extended period of limitation was deemed unjustified as there was no evidence of intent to evade taxes. The court allowed the appeal in part, ruling that the revenue could only collect service tax dues for the normal six-month period before the show cause notice was issued.

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Issues:
1. Whether the activity performed by the appellant matches the description of 'business auxiliary service'Rs.
2. Whether the invocation of the extended period of limitation is justifiedRs.

Analysis:

1. The appellant argued that introducing potential consumers to the bank and charging commission does not constitute 'business auxiliary service' since banking is not subject to service tax levy. However, during the appeal hearing, the appellant abandoned this argument. The court noted this and concluded that no question of law arises on this aspect.

2. The second issue raised was regarding the invocation of the extended period of limitation for the disputed period between 01/04/2005 and 05/09/2008. The court referred to established legal principles that the revenue cannot claim the benefit of an extended period of limitation without proven allegations of active intent to evade taxes. Citing relevant case laws, including Collector of Central Excise vs. Chempher Drugs & Liniments, the court emphasized that mere omission to pay tax without proof of intent to evade taxes does not warrant the invocation of the extended period of limitation.

3. Consequently, the court held that the invocation of the extended period was unjustified in this case. However, the revenue was deemed entitled to collect service tax dues for the normal period of six months before the issuance of the show cause notice. Therefore, the appeal was partly allowed, granting relief to the appellant on the issue of the extended period of limitation.

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