Service Tax Notice Issued for F.Y. 2015-16

[Chetan Manek]

Dear All,

Can any one help me out for what is due date for F.Y. 2015-16 to issue Service Tax Notice after considering Extension of Time limit for issuance of notice as per official gazette Notification Dated: 30.09.2020 (Date is extended till 31.12.2021).

In My case, Service Tax Notice is issued as on 23.04.2021 for F.Y. 2015-16 Based Data provided by IT Department (i.e. From Form 26 AS) and then after Service Tax Order is issued as on 31.01.2023.

My Question is, Whether i can put in my defence, the period from 01.04.2015 to 30.09.2015 (6 Months) as Time Barred or whether i can claimed entire Notice is Time Barred??

I also Confirm that it is not a case of Fraud as Appellant File Their IT Return within Time and also Appellant is auditable at that time so they also filed Tax Audit Report with IT Department..

So any One ca Suggest me proper defence against that Order??

[Chetan Manek]

Correction in First Para where (Date is Extended till 31.12.2020) For CORONA Period..

[KASTURI SETHI]

Sh.Chetan Manek Ji,

Yes. You must fight this case on time bar issue. There are case laws in your favour but note that Appeal period is over.

What is the date of receipt of the Order-in-Original ?

Was personal hearing held ?

[Chetan Manek]

Thank You KASTURI SETHI Sir For your Reply...

We have Received OIO (Order in Original) as on 10.03.2023 but Date of Issue of OIO is 31.01.2023..

And also we have filed appeal against that order as on 06.05.2023 and Date of PH (Personal Hearing) was on 23.08.2023 but we filed Adjournment Request as on 23.08.2023 (Date of PH)..

In Our First Appeal Submission we only stated claiming of Exemption & Abatement by generalising Without Going through Detailed Submission..Means in Our Next Appeal Further Submission we will provide detailed Submission..

Because of Appellant don't aware of Time Line and for the sack of our Purpose we have made basic appeal submission as on 06.05.2023 before Hon'ble Commissioner (Appeals) as appellant come to us at very last stage where we have didn't have so much time to study the detailed case..Now came to know we can won the case on the basis of Time Barred Defence...

So can you suggest me how we can go further ?? and on what basis Sir??

[Chetan Manek]

Sh. KASTURI SETHI Sir,

Am i Right where Time limit for issuance of Notice is extended till 31.12.2020..means I already search about that i only find that Government One Time Extended Limit till 31.12.2020 via Official official gazette Notification Dated: 30.09.2020...??

And Also in my case We are not submitted Detailed Defence, So we can Filed detailed Appeal Further Submission with Additional Grounds of Appeal...

[KASTURI SETHI]

I think that the Commissioner (Appeals) has not decided your case so far. If not decided, you can raise a new point before the Commissioner (Appeals) in the course of personal hearing.

[KASTURI SETHI]

If the Commissioner (Appeals) has decided, you can raise new point in the Appeal to the next Appellate Authority i.e. Tribunal (not constituted so far). or before High Court.

[Chetan Manek]

Dear All,

I posted Query on 23.08.2023 & 24.08.2023. Whether am i right that last notification is issued on 30.09.2020 for Extension of Time Limit Due to Covid-19 Time..

Our Case is for Service Tax Appeal Sir..

Or I can put in my defence First Half Year of F.Y. 2015-16 (i.e. from 01.04.2015 to 30.09.2015) for the second half i will claimed Exemption..

Appellant was provided Construction Service to Rural Road & Building Department of State Govt...i studied the case and i find that we can claim Exemption as per Clause (a) of Serial No. 12A of Notification No. 25/2012 -Service Tax Dated: 20.06.2012 Inserted vide Notification No. 09/2016 - Service Tax Dated: 01.03.2016 w.e.f 01.03.2016 & Also As per Section 102 of The Finance Act, 1994..

I also Studied All Work Orders along with Final R.A. Bills and also Department made payment Deduction of TDS. So all payments are reflected in Form 26AS for F.Y. 2015-16..

So Now I have two Options..

1st Option.. I will claimed that entire SCN along with OIO as time barred by saying that department had issued Notice and OIO by invoking Extended Period Considering this is case of Fraud or Suppression of Fact case but Party Conducted Audit under Income Tax Act and also File their IT Return along with Audit Report with IT Department so question of Supression of Fact or Fraud Does not arise..

2nd Option. I will claimed First Half Year as time barred and claimed exemption as per above mentioned serial no...

If any One have this type of Situation then kindly Suggest me what option should be Best Defence....??

(For Information Purpose, as i said i already checked all work orders appellant provided Construction Service (Related to Building Construction/Alteration/ Renovation of Mamlatdar Kacheri/ Variuos Government Department Office used for General Public) to Department that is sure. as a proof we have work order along with tender and final R.A. Bills and Material Purchase bills for Providing Construction Service and that is also reflected in 26AS)

[KASTURI SETHI]

Sh.Chetan Manek Ji,

Q. no.1 .Whether am I right that last notification is issued on 30.09.2020 for Extension of Time Limit Due to Covid-19 Time..

Ans. Last notification was issued on 5.7.22. Notification No.13/22-CT dated 5.7.22 effective from 1.3.2020. This notification excludes the period from 1.3.20 to 28.2.22. It amends Notifications No. 35/20CT dated 03.4.2020 and 14/21-CT dated 01.5.2021

Q.No.2 Can I put in my defence first half year of F.Y. 2015-16 (i.e. from 01.04.2015 to 30.09.2015) as time barred and for the second half I will claim exemption vide Notification No. 25/12-ST dated 20.6.12 (effective from 1.7.12) and Notification No.9/16-ST dated 1.3.16 effective from 1.3.16 for entry no.12 (A) ?

Ans. Extended period cannot be invoked and demand for normal period is not covered under the extension granted from 01.3.2020 to 28.2.22 vide Notification no.13/22-CT dated 05.7.22 effective from 1.3.20. From 28.5.12 to 13.5.16, normal period consisted of 18 months and from 14.5.2016 onwards normal period consisted of 30 months under Section 73 of the Finance Act, 1994. After enactment of Finance Bill, 2016 i.e. 14.5.16, the department may consider normal period of 30 months for issuing demand SCN for the whole year of 2015-16 but this will not be correct. For the demand from April, 2015 to September, 2015 normal period of 18 months will be computed from due date of filing return i.e. 24.10.15 (if return not filed) and if return filed from the actual date of ST-3 return filed. Similarly, for demand for the period from Oct. 15 to March, 16, normal period of 18 months is to be computed from 24.4.16 (if return not filed) and if return filed from the actual date of return filed. Hence time barred case.

If we take 30 months as normal period for the whole year 2015-16, even the demand will be time barred.

Q.No. 3 The Appellants provided Construction Service to Rural Road & Building Department of State Govt.. I studied the case and find that we can claim Exemption as per Clause (a) of Serial No. 12A of Notification No. 25/2012 -Service Tax Dated: 20.06.2012 as amended vide Notification No. 09/2016 - Service Tax Dated: 01.03.2016 w.e.f. 01.03.2016 & also as per Section 102 of The Finance Act, 1994..

Ans. Yes the Appellants are entitled to exemption.

Q.No. 4 So now I have two Options..

1st Option.. I shall claim that entire SCN along with OIO is time barred.

2nd Option..I shall claim first half year as time barred and claim exemption as per above mentioned serial no...

If any One have this type of situation then kindly Suggest me what option should be the best defence....?

Ans. First option (ground) should be preferred to second option (ground). However, as extra precaution, you are to contest on both grounds i.e. on merits as well as time limitation. The issue of option is not in picture. It is Hobson's choice.

Case laws in your favour on time limitation.

(i) Demand cannot be confirmed on the basis of Form 26 AS Vs. ST-3 returns without proper basis. Demand set aside---CESTAT Chandigarh in the case of Raj Mohan, Yamunanagar Vs. Commissioner, ST & CE Panchkula 2022 (8) TMI 832 - CESTAT CHANDIGARH.

(ii) Demand on the basis of Form 26 AS/TDS is not sustainable in the case of Forward Resources (P) Ltd. Vs. CCE & ST - 2022 (7) TMI 716 - CESTAT AHMEDABAD.

There are so many case laws. You can easily trace out.

[Chetan Manek]

Thank You Sir For your Reply with Detailed Description & Solutions for Each and every Questions..

AI Summary

Time-bar defence can invalidate service tax demands where statutory limitation computation and COVID exclusions bar the notice. The document advises that notices for FY 2015-16 are time barred after proper computation of the normal limitation periods: April-September 2015 attracts an 18 month normal period computed from the return due date or actual filing date, and October 2015-March 2016 is likewise computed; applying those rules (and even if a 30 month period were assumed) the present demand is time barred. The taxpayer may also claim exemption for construction services under the relevant service tax notification, and the recommended defence is to plead time bar primarily while contesting merits and exemption as alternative grounds.