Facility charges not taxable under Finance Act, assessee wins appeal.

The Tribunal held that the fixed facility charges received by the Appellant do not fall under Business Support Services and are outside the purview of the Finance Act, 1994. The cum-duty benefit is available to the assessee, and the extended period of limitation was not invocable due to the absence of suppression of facts. Consequently, the demand of service tax confirmed by the Adjudicating Authority was set aside, the appeal filed by the Department was dismissed, and the appeal filed by the assessee was allowed with consequential relief.

---

---

Issues Involved:
(a) Whether the fixed facility installed by the Appellant assessee in the present case is outside the purview of the Finance Act, 1994.
(b) Whether cum-duty benefit is available to the assessee.
(c) Whether the extended period is invocable.

Detailed Analysis:

(a) Whether the fixed facility installed by the Appellant assessee in the present case is outside the purview of the Finance Act, 1994:
The Department contended that the fixed facilities installed by the Appellant for uninterrupted supply of gas fall within the purview of Business Support Services and are therefore liable to service tax. The term "Support service of business or commerce" as defined in Section 65(104c) of the Act does not categorize the provision of gas supply. The explanation to the definition clause specifies that infrastructural support services should include office utilities and other facilities for smooth office operations. The main activity of the appellant is the manufacture and supply of gas, and the installation of fixed facilities is for continuous gas supply, not for providing 'infrastructure support service' or 'business support services'. The Tribunal referenced Circular No. 334/4/2006-TRU, dated 28-2-2006, which clarified that Business Support Services are meant for outsourced activities. The Tribunal concluded that the fixed facility charges are outside the purview of Business Support Services and hence, not liable to service tax.

(b) Whether cum-duty benefit is available to the assessee:
The Tribunal noted that as per Section 67(2) of the Finance Act, 1994, where the gross amount charged is inclusive of service tax, the value of the taxable service should be computed backward by treating the total receipts as inclusive of service tax. The Appellant had not charged service tax separately from the client, and thus, the service tax should have been computed backward. Reliance was placed on precedents such as Service Tax, Bangalore Vs Prompt Smart Security and others.

(c) Whether the extended period is invocable:
The Show Cause Notice was issued on 04.02.2013 for the period August 2009 to November 2012. The extended period of limitation can only be invoked if there is intent to evade tax due to fraud, collusion, willful misstatement, or suppression of facts. The Tribunal found no suppression of facts as the Department was aware of the Appellant's activities. The Appellant had a bona fide belief that the fixed facility charges were not liable to service tax. Therefore, the invocation of the extended period was not justified, and the demand of service tax was not sustainable.

Conclusion:
The Tribunal concluded that the fixed facility charges received by the Appellant do not fall under Business Support Services and are outside the purview of the Finance Act, 1994. The cum-duty benefit is available to the assessee as the service tax should be computed backward. The extended period of limitation was not invocable due to the absence of suppression of facts. Consequently, the demand of service tax confirmed by the Adjudicating Authority was set aside, and the appeal filed by the Department was dismissed while the appeal filed by the assessee was allowed with consequential relief.

---