Custom, Excise & Service Tax Tribunal
Expeditors International India Pvt Ltd vs Service Tax - Delhi on 10 December, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
New Delhi
PRINCIPAL BENCH - COURT NO. 3
Service Tax Appeal No. 766 Of 2012
[Arising out of Order-in-Appeal No. 64 & 65/Service Tax/DII/2012 dated 29.02.2012
passed by the Commissioner (Appeals) of Central Excise and Service Tax New Delhi]
Expeditors International India Private Limited : Appellant
61, Chimes, 5th Floor, Sector 44, Gurgaon
Vs
Commissioner of Service Tax, Delhi : Respondent
Plot No. 2B, Bhikaji Cama Palace, New Delhi with Service Tax Appeal No. 767 Of 2012 [Arising out of Order-in-Appeal No. 64 & 65/Service Tax/DII/2012 dated 29.02.2012 passed by the Commissioner (Appeals) of Central Excise and Service Tax New Delhi] Expeditors International India Private Limited : Appellant 61, Chimes, 5th Floor, Sector 44, Gurgaon Vs Commissioner of Service Tax, Delhi : Respondent Plot No. 2B, Bhikaji Cama Palace, New Delhi APPEARANCE:
Shri P. K. Sahu, Advocate for the Appellant Shri S. K. Meena, Authorized Representative for the Respondent CORAM :
HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL) HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) FINAL ORDER No. 59860-59861/2024 Date of Hearing:13.09.2024 Date of Decision:10.12.2024 HEMAMBIKA R. PRIYA These 2 appeals have been filed by M/s Expeditors International India Private Limited1 to assail the Order-in-Appeal No. 64 & 1 the appellant 2 ST/766&767/2012 65/Service Tax/DII/2012 dated 29.02.20122 wherein the Commissioner (Appeals) has upheld the demand of Rs. 49,35,060/-
and Rs. 33,18,111/- along with interest and equal amount penalty under Section 78 of the Finance Act, 1994.
2. The brief facts of the case are that the appellant is wholly owned subsidiary of Expeditors International Inc., SEATTLE, USA and engaged in the business of international logistics and freight forwarding, and was registered with the service tax department. The appellant paid Global Account Manager (GAM) expenses to the holding company towards its share of expenses on the employees of the holding company or any of its-other-subsidiaries-who took care of particular global customers, having operations in other countries and whose logistics requirements are being managed by the appellant. The appellant had also paid certain amount towards sharing of expenses on leased circuits provided by foreign service providers between the headquarters of the holding company and other cities around the globe. A show cause notice dated 21.04.2009 was issued to the appellant wherein service tax was demanded on Global Account Manager (GAM) expenses for the period 01.10.2003 to 31.03.2008 under the category of 'Business Auxiliary Service'. Subsequently, the appellant received another show cause notice dated 16.10.2009 wherein service tax demanded for being recipient of service for the period 01.04.2008 to 30.06.2009 under the category of 'Business Auxiliary Service' and leased line charges, relying upon the earlier show cause notice dated 21.04.2009. The same were adjudicated and the demand of service tax was confirmed along with imposition of 2 the impugned order 3 ST/766&767/2012 equal amount of penalty. Aggrieved by the said order, the appellant filed appeals before the Commissioner (Appeals) who rejected their appeals. Hence, the appellant has filed the present appeals.
3. Learned Counsel for the appellant submitted that the Global Account Managers (GAMs) are the employees of the holding company or any of its other subsidiaries who are coordinating management of logistics requirements of particular customers globally and leased circuits provided by Foreign Service providers between the headquarters of the holding company, and other cities around the globe. He further stated that the service tax has been demanded on royalty payments made to its holding company on the ground that such payment has been made for receiving business know-how which was taxable under the category of management consultancy service. He also submitted that service tax has been demanded on the amount shown under the head of "Other Expenditure" in the books of account paid to its holding company alleging that such payment for "software license access and maintenance expenses" to its holding company was taxable under the category of "Online Information and Data Base Access or Retrieval Services". The demand has been confirmed by holding that the appellant had failed to produce the details of such payments.
3.1 The learned counsel for the appellant further submitted that the sharing of expenses with group companies was not for any service. He stated that the Global Account Manager coordinates the management of logistics for transportation of goods belonging to customers located outside India and activities of operational or administrative assistance in any manner are classifiable as "business support service" w.e.f. 01.05.2011. Hence, demand under the category of "Business Auxiliary 4 ST/766&767/2012 Service" is not sustainable. In support of his submission, he relied upon the decision of the Tribunal in the case of Emerald System Engineering Limited vs. Commissioner of Service Tax, Mumbai- II3.
3.2 On the issue of Lease Circuit Service, the learned counsel for the appellant submitted that the leased line service has been included under the category "Telecommunication Service" u/s 65(105) (zzzx) of the Act. Consequently, this service is not taxable under this category as it has not been provided by "Telegraph Authority". In support his submission, he relied upon the decision of Tribunal Mumbai in the case of TCS E-Serve Ltd. vs. Commissioner of Service Tax, Mumbai4. On the issue of Service Tax on Royalty basis, the learned counsel relied upon the decision in the case of Castrol Limited vs. Commissioner of Central Excise, Raigad5 in support of his contentions.
3.3 Learned Counsel further submitted that this was purely a cost sharing arrangement for mutual benefit of the companies participating in the common facility. There is community of interest, wherein each participant undertakes to pay the cost of the facility relatable. The process does not involve any transaction between a service provider and recipient of its service. In support of his submission, he relied upon the following decisions: -
Gujarat State Fertilizers and Chemicals Limited vs. Commissioner of Central Excise6 M/s Historic Resort Hotels Private Limited vs. CCE, Jaipur-I7 3 2016 (43) STR 545 (Tri.-Mumbai) 4 2014 (33) STR 641 (Tri.-Mumbai) 5 2007 (8) STR 254 (Tri.-Mumbai) 6 2016 (45) STR 489 (S.C.) 5 ST/766&767/2012 Reliance ADA Group Pvt. Ltd. vs. Commissioner of Service Tax, Mumbai-IV8 He further submitted that the Commissioner had ignored the details of various payments made under the head "Others" provided by the appellant which has been noted in the impugned order. A bare perusal of the activities for which payment had been made, would indicate that the same is liable to be taxed as "Online Information and Data Base Access and Retrieval Services". Learned Counsel further submitted that the intention of Section 66A is to shift the burden of tax from the service provider to the recipient of service. However, these activities take place outside India and therefore, such services are not taxable in the hands of the foreign service providers or in the hands of the appellant. In support of his submission, he relied upon the following decisions:-
All India Federation of Tax Practitioners vs. Union of India 9 Commissioner of Central Excise and Service Tax vs. Reliance Industries Limited10 M/s Carborandum & Co. vs. CIT, madras11 3.4 In respect of the extended period of limitation and penalty, the learned counsel submitted that the appellant was under bonafide belief that no service tax was payable. The Commissioner has wrongly held that intention to evade payment of service tax is implied and there is suppression which includes failure to speak. He further contended that the demand made in the show cause notice dated 20.04.2011 for the period upto 30.09.2009 is time barred. There is no justification for levy of any penalty on the appellant and extending the period of 7 2017 - TIOL-3660-CESTAT DEL.
8 2016 (43) STR 372 (Tri.-Mumbai) 9 2007 (7) STR 625 (S.C.) 10 2016 (45) STR 341 (S.C.) 11 1997 (2) SCC 862 6 ST/766&767/2012 limitation when the appellant was under bonafide belief that no service tax was payable by it on the services received outside India.
4. Learned Authorized Representative for the Department while reiterating the findings of the impugned order, submitted that the Global Account Manager are the employees of the parent company and are rendering services to the clients of the appellant. Therefore, the said services are squarely covered under Business Auxiliary Services. The appellant was using the said leased lines to communicate with the parent company and other Group companies to render services to its clients. Thus, in this case, the holding company has not only provided the facility of telecommunication between the appellant and the other group companies, but also their services to facilitates the rendering of services to the clients.
4.1 Learned Authorized Representative further submitted that the services in question are 'Business Auxiliary Service' referred to in sub- clause (zzb) and 'Business Auxiliary Service' referred to in sub-clause (zzzq) and are, thus, covered in clause (iii) of the Rule 3 of Taxation of Service (Provided from outside and received in India) Rules, 2006. The said services have been received by the appellant for use in business or commerce and therefore, the said services are provided from outside India and received in India. The place of performance has no relevance.
4.2 Learned AR further contended that the appellant has never disclosed the facts to the Department, these facts came to the notice of the Department only on the basis of specific information. The appellant did not assess the correct amount of service tax and have also not shown the actual amount in the relevant ST-3 returns, thus violated the provisions of section 70 of the Act. They have wilfully 7 ST/766&767/2012 suppressed the facts from the Department with intention to evade the payment of service tax. Therefore, extended period and penalty under Section 78 is invokable. In view of above, he prayed that the present appeals may be dismissed.
5. We have heard both sides and perused the case on records. The issues before us for consideration are as follows:-
i. Services of Global Account Managers as the employees of the holding company or any of its other subsidiaries who are coordinating management of logistics requirements of particular customers globally.
ii. Leased circuits provided by Foreign Service providers between the headquarters of the holding company and other cities around the globe.
iii. Service tax on Royalty payments made to its holding company for receiving business know-how & taxable under the category of management consultancy service. iv. Service tax on Misc. payments under the head of "Other Expenditures" in the books of account paid by it to its holding company for "software license access and maintenance expenses" to its holding company was taxable under the category of "Online Information and Data Base Access or Retrieval Services". The demand has been confirmed by holding that the appellant failed to produce the details of such payments.
6. Before we proceed to consider the submissions, one would have to take note of the definition of BAS/BSS during the relevant period:
"Business Auxiliary Service" means any service in relation to,
(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or
(ii) promotion or marketing of service provided by the client; or [Explanation - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "service in relation to 8 ST/766&767/2012 promotion or marketing of service provided by the client" includes any service provided in relation to promotion or marketing of games of change, organised, conducted or promoted by the client, in whatever form or by whatever name called, whether or not conducted online, including lottery, lotto, bingo;]
iii) any customer care service provided on behalf of the client; or
(iv) procurement of goods or services, which are inputs for the client; or [Explanation -- For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client;]
(v) production or processing of goods for, or on behalf of the client; or
(vi) provision of service on behalf of the client; or
(vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any activity that amounts to "manufacture" of excisable goods.
Explanation -- For the removal of doubts, it is hereby declared that for the purposes of this clause, --
(a) "Commission Agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person --
(i) deals with goods or services or documents of title to such goods or services; or 9 ST/766&767/2012
(ii) collects payment of sale price of such goods or services; or
(iii) guarantees for collection or payment for such goods or services; or
(iv) undertakes any activities relating to such sale or purchase of such goods or services;
(b) "Excisable Goods" has the meaning assigned to it in clause (d) of Section 2 of the Central Excise Act, 1994;
(c)"Manufacture" has the meaning assigned to it in clause (f) of Section 2 of the Central Excise Act, 1944;
Support Services of Business or Commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation --For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security;
Section 65(104c) of the Finance Act, 1994 "Taxable Service"
means any service provided or to be provided to any person, by any other person, in relation to support services of business or commerce, in any manner;
(Section 65 (105) (zzzq) of the Finance Act, 1994)
10 ST/766&767/2012
7. It has been alleged by the Department that the Global Account Manager are the employees of the parent company and are rendering services to the clients of the appellant. Therefore, the said services are squarely covered under Business Auxiliary Services. The appellant was using the said leased lines to communicate with the parent company and other Group companies to render services to its clients. Thus, in this case, the holding company has not only provided the facility of telecommunication between the appellant and the other group companies, but also their services to facilitates the rendering of services to the clients. The Ld Counsel has submitted that the Global Account Manager coordinates the management of logistics for transportation of goods belonging to customers located outside India and activities of operational or administrative assistance in any manner are classifiable as "business support service" with effect from 01.05.2011. Hence, demand under the category of "Business Auxiliary Service" is not sustainable. In this context, we note that the functions of the Global Accounts Manager was to maintain communications between their clients and the Corporate Headquarter of the holding company. Vital information about the customers and freight movements organised by the appellant are passed on to their clients by these Global Account Managers. In view of the nature of the work of the said Global Account Managers, we are of the view that the said task is more appropriately classifiable under Business Support Services, which clearly covers the nature of the services being provided by the Global Accounts Managers. We find that the Show Cause Notice has proposed to classify services received by the appellant under 'Business Auxiliary Service', which according to our opinion does not cover the nature of the activity undertaken by the 11 ST/766&767/2012 appellant. We observe that a specific description is to be preferred over general description for classifying a service as per Section 65A(2)(a). Accordingly, we concur with the Ld Counsel's submissions that the said service is appropriately classifiable under the category of business support services. In this context, we take note of the decision of the Tribunal in the case of Emerald System Engineering Limited vs. Commissioner of Service Tax, Mumbai-II. The relevant para is reproduced hereinafter:-
"7. As regards the Transport Coordination Services Activity, we find that the services rendered in this case is arranging the entire transportation, dispatching of the goods, supervising the loading and unloading of the goods. We find strong force in the contentions raised by the learned counsel that this activity of the appellant is covered under "Business Support Services" from 1 st May, 2006. As per definition of the "Business Support Services"
under section 65, we find that managing distribution and logistics was covered under the said category as one of the goods on which service tax liability arises under "Business Support Services". The said services came to be taxed from 1.5.2006 is not in dispute. In our considered view, the activity undertaken by the appellant under Transport Coordination Services would be covered under "Business Support Services" with effect from 1.5.2006 and will not be covered under "Business Auxiliary Services"; this view is arrived at after considering the clauses in the agreement entered by the appellant with Saurashtra Cement Ltd. In view of this the demand of the tax on this point is unsustainable and liable to be set aside and we do so."
12 ST/766&767/2012 As regards the demand, the Ld Counsel has submitted that the same is taxable as activities of operational or administrative assistance in any manner with effect from 01.05.2011 only. In this context, we note that in the instant case, it is on record that the Global Account Managers were providing customers logistics support, which in our view is taxable from 01.05.2006 itself. We note that the said show cause notices have raised the demand under the head 'Business Auxiliary Service', which cannot be sustained. It is settled law that the decision is to be confined to the allegations in the show cause notice. As the allegation in the show cause notice was to charge tax under a different head, hence the demand cannot be upheld.
8. We now take up the issue of relating to the classification of Lease Circuit Service. We note that the leased line service has been included under the category "Telecommunication Service" u/s 65(105) (zzzx) of the Act. Consequently, as there is a specific classification for the said service, we hold that this service is not taxable under this category as it has not been provided by "Telegraph Authority". We observe that the Ld Counsel has relied upon the decision of Tribunal Mumbai in the case of TCS E-Serve Ltd. vs. Commissioner of Service Tax, Mumbai 2014 (33) STR 641 (TRI.), wherein this Hon'ble Tribunal has held that International leased circuit service from the foreign vendor was not taxable being telecommunication service from a person other than the telegraph authority. It has also been submitted before us that the demand on this account has been dropped for the subsequent period vide Order-in-Original dated 28.08.2012, we hold that the demand for the previous period cannot be sustained.
13 ST/766&767/2012
9. We take up the demand of Service Tax on royalty. It has been submitted by the Ld Counsel that this was merely supply of know-how which has been held as not taxable under management consultancy service. He relied on Castrol Limited vs. CCE, 2007 (8) STR 254 (Tri.) decision wherein the Tribunal has held that transaction for supply of know-how is not taxable as management consultant service. We concur with the submissions of the Ld Counsel in this regard. We also observe that the Tribunal in the case of M/s Max Financial Services ltd. Versus Commissioner Of Central Excise and Service Tax, Chandigarh I [2024 (10) TMI 454 - CESTAT CHANDIGARH] wherein the coordinate bench of this Tribunal held as follows:-
"5. Heard both sides and perused the records of the case. We find that the impugned order records the fact that during the course of audit, it was observed that M/s MGBPL had paid royalty fee and noncompetition fee to the appellants for the use of technical know-how developed by the noticee. On going through the MOU dated 30.06.1997 between the appellants and M/s MGBPL, it is clear that the transaction that has taken place is of sale and the consideration is mentioned under two Heads one being "Purchase Consideration on a slump price basis" and the second being "royalty for use of technical know-how for the period 01.07.1997 to 30.06.2000. We find that there is no mention of any Consultancy Service to be rendered by the appellants. That being the case, it will be incorrect to levy service tax on the same. We find that Tribunal in the case of Bharat Oman Refineries (supra) held that :
8. We have perused the details of agreements submitted by the appellant. These agreements are for supply of technical know-
how , process technology, proprietary technical information and various connected services to the appellant in connection with setting up of their plant in Madhya Pradesh. The Original Authority mainly focused on the engineering services, which are a follow up of the transfer of technical know-how , to conclude that the 14 ST/766&767/2012 appellants received engineering consultancy service only. We are not in agreement with such conclusion. The very fact that all these agreements talk about the foreign companies as "licensor" itself is revealing. In a typical agreement for consultancy service, there will be no licensor or licensee with transfer of licensed process technology or proprietary technical information. The essence of the agreement as could be seen from the narration above is for transfer of technology process. The Tribunal had occasioned to examine similar issues involving technical collaboration and transfer of intellectual property right from foreign companies to Indian recipient. It was held that when the agreement is for transfer of exclusive / nonexclusive technical know-how the consideration received cannot be taxed under consultancy service.
Reference can be made to the decisions in Yamaha Motors (I) Pvt. Ltd. v. CCE, Delhi-IV (Faridabad) reported in 2006 (3) S.T.R. 665 (Tri. - Del.) = 2005 (186) E.L.T. 161 (Tri.), CCE &Cus. Nashik v. Larsen & Toubro Ltd. reported in 2015 (37) S.T.R. 156 (Tri. - Mumbai), CST, Mumbai v. Leibert Corporation reported in 2014 (33) S.T.R. 161 (Tri. - Mumbai) and CST, Delhi v. Suzuki Motor Corporation reported in 2012 (25) S.T.R. 266 (Tri. - Del.).
6. We find that the facts of the above case are identical to the impugned case before us excepting the fact that the case above, service tax was demanded on Reverse Charge Mechanism, in the impugned case before us, the charge is on Forward Basis. We also find that Tribunal in the case of Supreme Industries Ltd. (supra) held that consideration received towards the transfer of technical knowhow cannot be held to be consideration for the services rendered as Consulting Engineer. In view of the same, we find that the impugned order passed in revision is not sustainable and is liable to be set aside".
10. As regards the issue relating to sharing of expenses, the Ld Counsel submitted before us that this was purely a cost sharing arrangement for mutual benefit of the companies participating in the common facility. There is community of interest, wherein each 15 ST/766&767/2012 participant undertakes to pay the cost of the facility relatable. The process does not involve any transaction between a service provider and recipient of its service. We note that the Ld Counsel has relied on several decisions in this regard. We find that the Hon'ble Supreme Court in its judgment in the case of Gujarat State Fertilisers and Chemicals Vs Commissioner of Central Excise & Service Tax (supra) and held as follows:-
"14. We have considered the aforesaid submissions in the light of the material placed on record. We shall advert to the second aspect namely, as to whether the arrangement between GSFC and GACL amounts to providing any services by GSFC to GACL and 50% incineration expenses incurred would constitute charges for providing such services. There is no dispute about the manner in which HCN is received through pipeline from M/s. Reliance Industries Ltd. by GSFC and GACL and then shared in the ratio of 60:40 respectively. GSFC and GACL are public sector undertakings, as already mentioned above. Since HCN is to be received through pipeline, it is abundantly clear that in order to save the expenditure, both the parties agreed that there should be a common pipeline. Once HCN is received through the said common pipeline, it comes first to GSFC's premises and from there it is diverted in the ratio of 60:40, meaning thereby that GSFC receives 60% of the HCN whereas GACL receives 40% of the supply in accordance with their respective requirement. To enable GACL to receive this HCN through common pipeline, arrangement/agreement was entered into between these two parties. For this purpose, handling facilities were installed in the premises of GSFC. However, fact remains, for which there is no dispute, that for installation of these facilities both the parties had contributed towards the investment. Since the said handling facilities are in the premises of GSFC, incineration also takes place at the said premises. Handling facilities expenditure thereof is shared equally by both the parties. That is clearly provided in the agreement/arrangement that was agreed to between the parties
16 ST/766&767/2012 and is reflected in the Minutes dated 06.07.1980. Once these facts are accepted, we find that handling portion and maintenance including incineration facilities is in the nature of joint venture between two of them and the parties have simply agreed to share the expenditure. The payment which is made by GACL to GSFC is the share of GACL which is payable to GSFC. By no stretch of imagination, it can be treated as common 'service' provided by GSFC to GACL for which it is charging GACL."
11. We now address the submissions with regard to the demand of service tax under the head 'Others' in the books of account paid by it to its holding company for "software license access and maintenance expenses" to its holding company was taxable under the category of "Online Information and Data Base Access or Retrieval Services". We note that the impugned order has confirmed the demand on the grounds that the appellant had failed to produce the details of such payments. It has been submitted by the Ld Counsel that the payment towards software license cannot be equated with "Online Information and Data Base Access and Retrieval Services". We concur with this submission. However, we also take note that the demand has been confirmed as the appellant did not submit the requisite documents, it would be appropriate to remand this issue to the original adjudicating authority to re-adjudicate the matter giving an opportunity to the appellant to submit all relevant documents in this regard to their contentions.
12. We now address the last submission of the Ld Counsel challenging the tax imposition under Section 66A of the Finance Act, 1994. The Ld Counsel has submitted that Section 66A does not expand the tax net beyond taxable territory of India. The basic intention 17 ST/766&767/2012 behind this provision is to simply shift the burden of tax from the service provider to the recipient of service. However, he contended that all the activities were taking place outside India and, therefore, such services are not taxable either in the hands of the foreign service providers or in the hands of the appellant. In this context, he relied on the judgment in All India Federation of Tax Practitioners vs. UOI, [2007 (7) STR 625 (S.C.)], wherein the Hon'ble Supreme Court held that principle of equivalence is to be applied between excise duty and service tax and that service tax is levied on services provided in India. In this regard, we take note of the Tribunal's decision in the case of Commissioner of Central Excise vs Reliance Industries Ltd [2016 (45) STR 341(Tri.)] wherein it was held that Taxation of Services(Provided from Outside India and received in India), 2006 would apply only when such services are provided within the territorial jurisdiction of the Act. In the instant case, it is established that no service has been provided within India and hence section 66A is not applicable.
13. As regards the extended period, the learned Counsel has submitted that the revenue had conducted audit of the records of the appellant. In this context we note that it is settled law that mere detection by the audit team is no ground to allege suppression. In the instant case we note that the appellant was registered with the Service Tax department and was filing returns. It is also on record that audit was conducted by the department. We note that in the case of Incredible Unique Buildcon Ltd., vs. Commissioner, Central Excise and Service Tax [2022 (7) TMI 1182(CESTAT)] it was held that 18 ST/766&767/2012 "16. If a tax is chargeable, in order to recover the service tax not paid or short paid a notice has to be issued under Section 73 of the Act. This is the only remedy available to the Revenue. The notice can be issued within the normal period of limitation only unless the elements of fraud or collusion or wilful statement or suppression of facts or contravention of any provisions of the Act or Rules with an intent to evade payment of service tax is established. If any of these elements are established in any case, the demand can be raised within an extended period of limitation of 5 years. ....................................................................................................
17. ...............................................Once the returns are filed, if Revenue was of the opinion that the self-assessment of service tax and the classification was not correct, it could have scrutinized the returns and issued notices within time. The show cause notice was issued on 30 September 2015 for the period covered October 2010 to June 2012, which is clearly beyond the normal period of limitation. Therefore, although Revenue is correct on merits, the demand is time barred and, therefore, cannot sustain. For the same reason, the penalties imposed upon the appellant under Sections 77 and 78 also cannot be upheld."
13.1 In view of the above settled position of law, we hold that the extended period cannot be upheld.
14. Consequently, we pass the following order:
(i) Demand in respect of Global Account Manager is set-aside.
(ii) Demand in leased circuit is set-aside.
(iii) Demand in respect of royalty payment is set-aside.
(iv) Demand in respect of income indicated as 'other' is remanded to the original authority to provide opportunity to the 19 ST/766&767/2012 appellant to submit relevant invoices/documents to substantiate their claim.
(v) All penalties are set-aside.
(vi) Extended period cannot be invoked
15. Accordingly, the impugned orders are set-aside and the appeals stand allowed, except on the limited issue. The appeal is remanded to the adjudicating authority.
(Order pronounced in the open Court on 10.12.2024) (BINU TAMTA) MEMBER (JUDICIAL) (HEMAMBIKA R. PRIYA) MEMBER (TECHNICAL) G.Y.