Revenue's Appeal Dismissed, Service Tax Imposition Set Aside

The Tribunal dismissed the Revenue's appeal, finding that the Show Cause Notices issued to the assessee-appellant were barred by limitation and that the services provided qualified for exemption under Notification No. 25/2012-ST. The Tribunal set aside the order imposing service tax for the period from 01.04.2012 to 30.06.2012, allowing the appeal in favor of the assessee-appellant.

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Issues Involved:

1. Limitation of time for issuing Show Cause Notice (SCN).
2. Applicability of service tax exemption under Notification No. 25/2012-ST.
3. Liability for service tax for the period from 01.04.2012 to 30.06.2012.

Summary:

1. Limitation of Time for Issuing Show Cause Notice (SCN):

The Tribunal examined whether the SCNs issued to the assessee-appellant were barred by limitation. The assessee-appellant had informed the department about their activities and VAT payments as early as 2008. Despite this, the SCN was issued in 2013, almost five years later. Sub-section (1) of Section 73 of the Finance Act, 1994, mandates that SCNs should be issued within eighteen months from the relevant date, extendable to five years only in cases involving fraud, collusion, wilful misstatement, suppression of facts, or contravention of provisions with intent to evade tax. The Tribunal found that the department was aware of the assessee-appellant's activities, and no new facts were presented to justify the extended period. Citing the Supreme Court judgments in Pushpam Pharmaceuticals and Anand Nishikawa, the Tribunal held that the SCNs were barred by limitation, dismissing the Revenue's appeal on this ground.

2. Applicability of Service Tax Exemption under Notification No. 25/2012-ST:

The Tribunal considered whether the services provided by the assessee-appellant qualified for exemption under Notification No. 25/2012-ST, which exempts auxiliary educational services provided to educational institutions. The CBEC Circular No. 172/7/2013-ST clarified that catering services provided to students in educational institutions qualify for this exemption. The Tribunal agreed with the Commissioner (Appeals) that the services provided by the assessee-appellant from 01.07.2012 to 31.03.2013 were exempt under the notification and dismissed the Revenue's appeal on this ground.

3. Liability for Service Tax for the Period from 01.04.2012 to 30.06.2012:

The Commissioner (Appeals) had remanded the matter to the lower authority to compute the service tax liability for this period and consider penalties. The assessee-appellant argued that they were not liable for service tax, citing a similar case involving M/s Asha Caterers, where the Additional Commissioner had dropped the SCN proceedings. The Tribunal found that the order in the Asha Caterers case had not been appealed against and had attained finality. Citing the Supreme Court judgment in Novapan Industries, the Tribunal held that the department cannot adopt a different stance in similar cases. The Tribunal set aside the impugned order to the extent that it imposed service tax for the period from 01.04.2012 to 30.06.2012, allowing the appeal in favor of the assessee-appellant.

Conclusion:

The Tribunal dismissed the Revenue's appeal and allowed the assessee-appellant's appeal, setting aside the impugned order concerning the service tax liability for the period from 01.04.2012 to 30.06.2012. The cross-objection filed by Revenue was disposed of.

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