2022 (7) TMI 875 - AT - Service Tax

Tribunal allows appeal, overturns service tax order due to lack of evidence of misconduct.

The Tribunal allowed the appeal in favor of the appellant, setting aside the Order-in-Original demanding service tax for a specific period. The Tribunal ... Time Limitation - belated demand of service tax - manufacture of S.S. Utensils which are dutiable - suppression of facts or not - revenue neutrality - recovery of service tax alongwith interest and penalty - reverse charge mechanism - HELD THAT:- Admittedly, the transaction, on which the service tax was demanded belatedly, was found on record in the books of account. Further, the service tax has been demanded under Reverse Charge Mechanism. The appellant, being a manufacturer of dutiable goods, is entitled to Cenvat credit of such service tax. Thus, situation is wholly revenue neutral. In this view of the matter, it is held that there is no case of any suppression of facts, misstatement or contumacious conduct on the part of the appellant. Accordingly, the extended period of limitation is not available to Revenue. Appeal allowed - decided in favor of appellant. Issues Involved:1. Whether the show cause notice demanding service tax for a specific period is barred by limitation.Analysis:The appeal in question pertains to a show cause notice dated 7-1-2020 concerning the demand of service tax for the period April, 2016 to December, 2016, and the primary issue is whether this demand is time-barred. The appellant, registered under Service Tax and engaged in manufacturing dutiable goods, received the notice requiring them to explain why service tax, interest, and penalty should not be imposed. The appellant contested the notice, leading to an Order-in-Original confirming the demand along with interest and penalty. Subsequently, the appellant appealed to the Commissioner (Appeals), who upheld the original order, prompting the appellant to approach the Tribunal.Upon hearing both parties, the Tribunal considered the facts and contentions presented. It was noted that the transaction triggering the belated service tax demand was recorded in the appellant's books of account, and the tax was demanded under the Reverse Charge Mechanism. Given that the appellant, as a manufacturer of dutiable goods, could avail Cenvat credit for such service tax, the situation was deemed revenue neutral. The Tribunal concluded that there was no evidence of suppression of facts, misstatement, or contumacious conduct by the appellant, leading to the determination that the extended period of limitation was not applicable to the Revenue.Based on the above analysis, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. Consequently, the appellant was granted consequential benefits as per the law. The decision was announced in open court, with the appeal being allowed, thereby resolving the issue of limitation regarding the service tax demand for the specified period.