Cheques Honored Post-01.07.2010 Set as Payment Date, Exemption Denied; No Fraud Found, Demand & Penalty Overturned.

The Tribunal determined that for cheques received before 30.06.2010 but honored on or after 01.07.2010, the date of honoring is considered the date of receipt of payment, disqualifying the appellant from the exemption. Regarding the extended limitation period under Section 73 of the Finance Act, 1994, the Tribunal found it inapplicable due to the absence of suppression or fraud, as the issue involved interpreting a notification. Consequently, the demand, penalty, and interest were not upheld, and the appeal was allowed.

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Issues:
1. Determination of the date of receipt of consideration of services in case of cheques received before 30.06.2010 but honoured on or after 01.07.2010 for availing exemption.
2. Invocability of the extended period of limitation under Section 73 of the Finance Act, 1994.

Issue 1:
The appellant, engaged in various construction and renting services, was found to have not paid service tax on receipts up to 30.06.2010, received via cheques honored on or after 01.07.2010. The Adjudicating Authority held that advance payment refers to consideration received for taxable services, deposited in the party's account by the bank. The Appellate Authority affirmed this decision. The Tribunal upheld that in the case of cheque payments, the date of honoring the cheque should be considered as the date of receipt of advance payment. As the appellant received the amount post 01.07.2010, they were not entitled to the exemption.

Issue 2:
Regarding the extended period of limitation under Section 73, a show cause notice was issued for the period October 2009 to September 2011, beyond one and a half years from the demand period. The appellant argued that the demand for the period before October 2011 was time-barred due to no suppression or fraud. They believed they were exempt under the notification due to cheques dated pre-1.7.2010. The Tribunal agreed that as there was no suppression of facts and the issue was about interpretation of the notification, the extended limitation period was not applicable. Citing a previous decision, it was noted that if returns were regularly filed, the extended period of limitation cannot be invoked. Thus, the demand, penalty, and interest were not upheld, and the appeal was allowed.

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