The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on management, maintenance, and repair services on the grounds of limitation.
Orient Flight School, the appellant assessee was registered as a Society under the Societies Registration Act, 1816, and is engaged in flight training to students and imparted training to the students like take-off, landing, flying, handling aircraft and ground training and also prepared the students for various skill tests in the Air and Ground examinations conducted by the Directorate General of Civil Aviation (DGCA) to issue Private Pilot License (PPL), Commercial Pilot License (CPL), etc.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand for service tax along with interest and for imposing penalties.
N Vishwanathan, the counsel for the assessee contended that the repair services of aircraft but such services were not done in pursuance of contracts or agreements as there are no contracts/agreements available and submitted that the tax under the head of management, maintenance and repair services cannot be demanded.
Rudra Pratap Singh, the counsel for the department contended that the assessee had rendered repair and maintenance service brought out from invoices/documents, and therefore assessee was liable to pay service tax on this activity.
The Bench observed that there was no specific allegation of suppression of facts brought out against the assessee alleging intent to evade payment of tax. Further, though the show cause notice (SCN) was issued in 2010, the same had been adjudicated with much delay only on 31.12.2021. For these reasons, the SCN issued invoking the extended period cannot be sustained.
The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) deleted the demand raised under Management, Maintenance & Repair Services on the ground of limitation.
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