Service tax demand fails as extended limitation period cannot be invoked without suppression or fraud

CESTAT Hyderabad held that extended period of limitation cannot be invoked against appellant for non-payment of service tax on cleaning, housekeeping, cooking, and fleet management services for 2011-12 and 2012-13. The appellant regularly filed returns without any misstatement or suppression of turnover. Revenue's demand was based solely on detailed investigation findings, constituting mere change of opinion rather than suppression, fraud, or contemptuous conduct. Since no case for extended limitation was established, the appeal succeeded on limitation grounds without examining merits. The impugned order was set aside and appeal allowed.

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Issues involved:

1. Taxability of cooking services.
2. Taxability of cleaning services.
3. Taxability of fleet management services.
4. Demand under Reverse Charge Mechanism.
5. Invocation of extended period of limitation.

Summary:

1. Taxability of Cooking Services:
The appellant argued that their cooking services do not fall under the definition of 'outdoor caterer' as they only provide manpower for cooking, with all groceries and gadgets supplied by the recipient institutions. This view is supported by the Tribunal's rulings in Rajiv Kumar Gupta vs CCE, Jaipur and other cases, where similar setups were not considered as outdoor catering services.

2. Taxability of Cleaning Services:
The appellant contended that their cleaning services provided to educational institutions do not fall under 'cleaning activity' u/s 65(24b) as they are non-commercial buildings. This argument is supported by Tribunal decisions in Maltanb Construction Engineers Pvt Ltd vs CCE & ST, Coimbatore and Bombay Intelligence Security (India) Ltd vs CST, Mumbai-II, which held that cleaning services for non-commercial establishments are not taxable.

3. Taxability of Fleet Management Services:
The appellant provided drivers and cleaners, which they argue is not taxable under 'Management, Maintenance or Repair service' (MMRS). They also cited Notification No.14/2004-ST, which exempts 'Business Auxiliary services' related to education. The Tribunal had previously set aside a similar demand under 'Business Support service' (BSS) for Junior Varsity.

4. Demand under Reverse Charge Mechanism:
The appellant claimed that the demand for services like GTA, Legal, and Works Contract under Reverse Charge Mechanism was raised without proper verification of records, making it unsustainable.

5. Invocation of Extended Period of Limitation:
The appellant argued that the demand raised after 39 months by invoking the extended period of limitation was unjustified as they were registered with the department and had been compliant. The Tribunal found no suppression, misstatement, or fraud, indicating that the SCN was issued by way of change of opinion. Hence, the extended period of limitation was not invokable.

Conclusion:
The Tribunal allowed the appeal on the ground of limitation, setting aside the impugned order and entitling the appellant to consequential benefits. The Tribunal did not delve into the merits of the case, as the limitation issue was decisive.

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