Issuance of Show Cause Notice for demanding service tax beyond the normal period of limitation of one year - co-operative society VS. commercial concern.

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....ssuance of Show Cause Notice for demanding service tax beyond the normal period of limitation of one year - co-operative society VS. commercial concern. <br>News and Press Release<br>Dated:- 18-4-2008<br><BR>Sub-Section (3) of 73 of Chapter V of Finance Act, 1994 (Service Tax), provides that, before issuance of SCN, beyond the normal period of limitation, revenue has to prove that the assessee has....

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.... evaded service tax with mala-fide intention. In case, the assessee has genuine reasons for not payment of service tax, the service tax notice can not be issued for raising demand beyond one year from the relevant date. But, it is the common practice of the department to issue show cause notice by invoking the extended period of limitation of five year without satisfying the requirements of sec....

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....tion 73(3) of the Act. In the present case also the honorable tribunal has struck down the demand by observing that: Since the first Appellate Authority has given a finding that the appellants had a bona fide doubt with regard to their liabilities. On that ground he had set aside the penalties. In such circumstances, the longer period could not have been invoked. Therefore, on this ground alone,....

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.... the impugned demand is not sustainable. Further, in this case, the appellant was a co-operative society. It has also argued that it is not a commercial concern for the purpose of levy of service tax under the category of "Security Agency Services" Tribunal has answered this issue as under: It is a fact that the appellant is a co-operative society, registered under Karnataka Co-operative Socie....

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....ty Act and it was registered for the welfare of the Ex-servicemen. It is also recorded under Section 4 of the Karnataka Co-operative Society Act, 1954 that a commercial concern is debarred from being registered as a Co-operative Society. From this, it follows that the appellant is not a commercial concern, yet the Commissioner has confirmed the demand. Therefore, even on merit the demand is not su....

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....stainable. (For full text of judgment - visit 2008 -TMI - 3609 - CUSTOMS, BANGALORE)<BR> News - Press release - PIB....