Mere Non-Payment of Service Tax and Non-Filing of Returns Not sufficient to Extend Period of Limitation: CESTAT [Read Order]

The Chandigarh bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that mere non-payment of service tax and non-filing of returns is not sufficient to extend the period of limitation. The Tribunal has been taking a consistent view that a mere non-payment of service tax and non-filing of Returns would not be a sufficient reason to extend the period of limitation.

M/s Teradata India Pvt. Ltd, the appellants have registered themselves under Service Tax and GST as applicable during the relevant periods for payment of tax; on the conduct of audit of the accounts of the appellants from July 2019 to October 2019, the appellants have paid the service tax along with interest as pointed out by the audit;

After lapse of around eight months, Revenue issued a show-cause notice to the appellants demanding service tax of Rs.65,34,464/- along with interest of Rs.44,20,422/-; Commissioner vide Order-in-Original dated 29.01.2021 confirmed the demands with interest and appropriated the amounts already paid by the appellants; he further imposed penalty of Rs.10,000/- under Section 77 and penalty of Rs.9,80,170/- under Section 78 of the Finance Act, 1994.

Shri Krishna Rao, Counsel for the appellant, submitted that the appellant has submitted detailed reply dated 29.09.2020 to the Commissioner stating inter alia that SCN is time-barred and extended period in terms of proviso to Section 73(1) of the Act is not invocable and that as per Section 73(3), SCN cannot be issued in respect of service tax and interest already paid by the appellant before the issuance of SCN.

He argued that there was no suppression of fact with intent to evade payment of duty on the part of the appellant and no evidence to invoke extended period on that count has been adduced by the Department. Further submitted that the period involved in the case is from April 2014 to June 2017; for some periods, the SCN is beyond for years even with an extended period; the last date for issuance of SCN for the normal period also expired on 14.02.2020. 

It was contended that the appellant has maintained all the statutory records; they have submitted details/ documents as and when called for by the audit; the data required for issuance of show cause notice was taken out from their statutory records only; under the circumstances, it cannot be alleged that the appellant has suppressed facts with intent to evade payment of duty.

The appellant submitted that there was no suppression of facts on their side with intent to evade payment of duty and for that reason, the extended period cannot be invoked. On going through the impugned order and the show-cause notice.

A single member bench of Mr P Anjani Kumar, Member ( Technical ) found that except for stating that the show-cause notice has been issued only after the conduct of the audit and that the appellants have suppressed the material facts, no evidence has been put forth in the show-cause notice or in the impugned order to show that there has been a positive act of suppression on the part of the appellants to evade payment of duty.

Further held that the Tribunal has been taking a consistent view that a mere non-payment of service tax and non-filing of Returns would not be a sufficient reason to extend the period of limitation.

The CESTAT set aside the impugned order while allowing the appeal with consequential relief, if any, as per law. Shri Krishna Rao appeared for the Appellant and Ms. Shivani appeared Authorised Representative for the Respondent

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