2008 (2) TMI 44

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....epartment issued a show-cause notice on 30-11-06 requiring them to show cause why service tax should not be demanded under the proviso to Section 73(1) of the Finance Act, 1994 in respect of the above royalty which was allegedly paid for "Intellectual Property Service". The notice also demanded interest on service tax under Section 75 of the Act. The amounts already paid by the party were sought to be appropriated towards these demands. Penalties under Sections 76, 77 and 78 of the Act were also proposed. The extended period of limitation was sought to be invoked on the ground of alleged suppression of material facts by the noticee. The allegations were denied and the demands were contested on factual and legal grounds. In adjudication, ld.....

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....ax and Education Cess (with interest)' for the present period of dispute. Ld. Counsel submits that, when the department themselves had taken the stand that transfer of technology was a service in the category of "Consulting Engineer's Service" for the earlier period, it was not open to them to allege that the appellants had suppressed facts with intent to evade payment of service tax and, therefore, the extended period of limitation was not invocable against the appellants. It is, further, submitted that the appellants are entitled to take Cenvat credit of the service tax paid for the period of dispute and, therefore, on the principle of revenue-neutrality, it can be reasonably contended that the larger period of limitation was not invocabl....

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....e appellants' own case, the department sought to recover service tax in the category of "Consulting Engineer's Service" in respect of transfer of technical know-how for an earlier period and that dispute is still pending before the lower appellate authority. This conduct of the department was enough to create confusion in the mind of the appellants as to which of the two taxable services would cover the present case of transfer of technology. In Final Order No. 1159 ibid [2008 (9) S.T.R. 34 (Tribunal)], we had observed thus: "By taking different views at different points of time as regards the nature of the service rendered by the appellants to IBM during the material period, the Departmental authorities themselves landed the assessee in....