Security Service Provider Liable for Service Tax with Interest; Extended Tax Demand Period Not Applicable, No Penalty Imposed.

The Tribunal held that the Appellant, a security service provider, is liable to pay service tax for the normal period of limitation, along with interest, for services rendered from 2001-02 to 2003-04. However, the Tribunal found that the extended period for demanding tax was not applicable since the Appellant did not suppress information and cooperated with the tax authorities. Consequently, demands based on the extended period were deemed unsustainable. No penalty was imposed on the Appellant as there was no evidence of intent to evade tax. The appeal was disposed of accordingly.

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Issues involved:
The appeal against Service Tax demand upheld by the Commissioner of Central Excise, Kolkata.

Issue 1: Liability to pay Service Tax
The Appellant, a security service provider, was demanded service tax for the period 2001-02 to 2003-04. The Appellant argued that they have been registered with the Service Tax department, regularly paying service tax, and providing security services mainly to Government agencies. They claimed that they promptly deposited the service tax collected and tried to recover unpaid taxes from clients. The Tribunal held that the Appellant is liable to pay service tax on the taxable services rendered, as there is no specific exemption for security services to Government agencies.

Issue 2: Invocation of Extended Period
The Appellant contended that the demand made by the department for the period 2001-02 to 2003-04 was barred by limitation as the show cause notice was issued on 11.11.2005. The Tribunal observed that the Appellant had not suppressed any information and had cooperated with the department by raising separate invoices for unpaid service tax. Therefore, the Tribunal held that the extended period cannot be invoked to demand service tax and the demands confirmed based on the extended period were not sustainable.

Decision:
The Tribunal concluded that the demands confirmed by invoking the extended period were not sustainable. The Appellant was held liable to pay service tax for the normal period of limitation, along with interest, but no penalty was imposed as suppression with intent to evade payment of tax was not established. The appeal was disposed of accordingly.

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