Appellant's Tax Belief Upheld, Demand Time-Barred

The Tribunal held that the appellant's belief that the date of cheque issuance was relevant for tax purposes was supported by Supreme Court judgments. As there was no willful suppression or intent to evade tax, the extended period of limitation could not be invoked. The Tribunal found the demand time-barred and set aside the Commissioner's order, allowing the appeal.

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Issues Involved:
1. Whether the appellant was entitled to claim exemption from payment of service tax under the Notification effective from 01.07.2010 for advance payments received through cheques issued on or before 30.06.2010 but realized after 01.07.2010.
2. Whether the extended period of limitation could have been invoked in the facts and circumstances of the case.

Summary:

Issue 1: Exemption from Payment of Service Tax
The appellant, engaged in providing construction services, claimed exemption from service tax on advances received before 01.07.2010, as per Notification No. 36/2010-ST. They argued that the cheques dated before 01.07.2010 should be considered as payment received before the cut-off date, despite being honored after 01.07.2010. The department contended that the relevant date for payment receipt is the date of cheque realization, thus denying the exemption. The Additional Commissioner and Commissioner (Appeals) upheld this view, stating that the exemption applies to the amount credited to the government account before 01.07.2010.

Issue 2: Extended Period of Limitation
The appellant argued that the extended period of limitation under the proviso to section 73(1) of the Finance Act should not apply, as there was no willful suppression of facts or intent to evade tax. They believed in good faith that the date of cheque issuance was the relevant date for tax purposes. The department, however, invoked the extended period, claiming suppression of facts detected during an audit.

Findings:
The Tribunal found that the appellant had a bona fide belief, supported by Supreme Court judgments, that the date of cheque issuance was the relevant date for tax purposes. There was no evidence of willful suppression or intent to evade tax. The Tribunal emphasized that suppression must be deliberate and with intent to evade payment of duty, as established in various judicial pronouncements.

Conclusion:
The Tribunal concluded that the extended period of limitation could not be invoked as there was no willful suppression of facts with intent to evade tax. The entire demand confirmed by the Commissioner (Appeals) was within the extended period, and since the necessary conditions for invoking it were not met, the demand was time-barred. Consequently, the Tribunal set aside the impugned order and allowed the appeal.

Order:
The impugned order dated 12.03.2018 passed by the Commissioner (Appeals) was set aside, and the appeal was allowed.

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