The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that to determine service tax liability, the extended period of limitation cannot be invoked in the absence of any finding of willful suppression.
Progeon Global Forwarding Pvt. Ltd, the appellant assessee was engaged in arranging transportation of export and import cargo of their customers in containers by sea/air through the shipping lines/airlines, and the assessee collected charges from their customers as Ocean Freight both in the case of imports and exports.
The assessee appealed against the order passed by the adjudicating authority for confirming the demand for service tax of Rs. 69,97,883/- along with appropriate interest and imposed penalties under section 78 of the Finance Act, 1994.
S. Adithya, the counsel for the assessee contended that the extended period had been invoked only on the ground that they did not declare the taxable value and assess tax correctly with an intent to evade payment of duty.
Also submitted that failure to declare freight in the return was with an intent to evade duty and hence extended period cannot be evoked in the absence of any finding of willful suppression.
Rudra Pratap Singh, the counsel for the department relied on the decisions made by the lower authorities and contended that the department was rightly invoking the period of limitation and the demand raised by the department was as per the law and liable to be sustained.
The Bench observed that the demand was to be restricted to the normal period only as the ingredients to evoke were not demonstrated to be present as per both orders.
The two-member bench comprising P.Dinesha (Judicial) and Ajit Kumar (Technical) Penalties imposed, which are consequential to evoking of the extended period are quashed.
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