Custom, Excise & Service Tax Tribunal
Cce, Allahabad vs M/S.S.C.I. Coaching on 6 August, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Court-III
Appeal No.ST/486/2009-CU (DB)
ST/CO/57/2010
Date of Hearing/Order: 06.08.2015
(Arising out of Order-in-Appeal No.23-ST/ALLD/2009 dated 31.3.2009 passed by the CCE (Appeals), Allahabad)
Honble Mr.R.K.Singh, Member (Technical)
Honble Ms.Sulekha Beevi C.S., Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
no
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
no
3.
Whether their Lordships wish to see the fair copy of the order?
seen
4.
Whether order is to be circulated to the Department Authorities?
yes
CCE, Allahabad Appellant
Vs.
M/s.S.C.I. Coaching Respondent
Present for the Appellant: Shri B.B.Sharma, DR Present for the Respondent: None Coram: Honble Mr.R.K.Singh, Member (Technical) Honble Ms.Sulekha Beevi C.S., Member (Judicial) FINAL ORDER NO.52720/2015 PER: R.K.SINGH Revenue is in appeal against Order-in-Appeal dated 31.3.2009 which set aside the Order-in-Original dated 28.5.2008 in terms of which the service tax demand of Rs.99,406/- alongwith interest and penalty was confirmed under category of commercial training or coaching service on the ground that the appellant did not pay service tax on the amount received in advance from service recipients during the months of May and June, 2003 though the service became taxable with effect from 1.7.2003.
2. The Revenue has contended that it was clarified by CBEC vide its circular No.65/14/2003 dated 05.11.2003 that where the value of taxable services has been received by the service provider in advance for services which became taxable subsequently, the tax has to be paid on the value of the service which may be worked out on prorata basis. Indeed in Rule 6(1) of the Service Tax Rules, 1994 was amended with effect from 9.7.2004 by way of inclusion of an Explanation thereto which is as follows:-
For the removal of doubt it is hereby clarified that in case of the value of taxable services is received before providing the said service, service tax shall be paid on the value of service attributable to the relevant month or quarter, as the case may be. In the circumstances, the respondent was required to pay service tax which it did not do. It also suppressed the information with regard to the value of service received in advance and therefore extended period is also invokable.
4. Nobody appeared on behalf of the respondent though notice of hearing was timely issued and no request is received for adjournment.
5. We have considered Revenues contentions and perused the cross objections filed by respondent. It is not in dispute that the service tax has been demanded on the amount received in the months of May and June, 2003 for providing commercial training or coaching service while the said service became taxable only from 1.7.2003. The CBECs clarificaitory circular No.65/14/2003 was issued on 5.11.2003. Rule 6(1) of the Service Tax Rules, 1994 was amended with effect from 9.7.2004 by way of inclusion of the Explanation quoted above. The said Explanation begins with the words For the removal of doubt which shows that there was doubt about the taxability of such advance received prior to the date when the service became taxable and the doubt was of such gravity that Govt. had to add an Explanation to sub-rule (1) of Rule 6 of Service Tax Rules. In the circumstances, without going into legal aspect whether the said amendment of Rule 6(1) had retrospective effect, it is quite reasonable on the part of the respondent to entertain a belief regarding non taxability of the amount received prior to the date when the said service became taxable, especially when there is no evidence produced by Revenue to establish that there was wilful suppression of facts on the part of the respondent. Regarding the contention of Revenue, that the respondent did not include the advance received in the month of May and June, 2003 in its ST-3 returns for April ,2003 to September 2003 which proved suppression on its part, it needs to be mentioned that service became taxable from 1.7.2003 and so it is rather unreasonbel to require (or expect from) the respondent to file ST-3 return from April, 2003 onwards. We find that the Commissioner (Appeals) has discussed the issue at length. We are in agreement with Commissioner (Appeals) regarding non invokability of extended period of limitation in this case. As the show cause notice was issued on 2.7.2006, the entire demand is beyond the normal period of one year and is therefore fatally hit by time-bar.
6. In view of foregoing discussion, we do not find the impugned demand sustainable. The appeal is dismissed. The cross objections are also disposed of.
(Dictated and Pronounced in the open court) (SULEKHA BEEVI C.S.) (R.K.SINGH) MEMBER (JUDICIAL) MEMBER (TECHNICAL) mk 5