The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad held that no demand can be made for extended period of limitation when no intention to evade payment of service tax.
M/s. Southern Power Distribution Company of Andhra Pradesh Ltd, the appellant has filed the appeal to assail the order dated passed by the Commissioner of Central Tax, by which the demand has been confirmed and an order for recovery from the appellant under the proviso to action 73(1) of the Finance Act, 1994 with interest and penalty.
This appeal has been filed against demand of service tax on amount received by the appellant against activities performed during the period from 01.07.2012 to 30.06.2017, for which show cause notice dated 28.04.2018 was issued alleging suppression of facts with intent to evade payment of service tax.
The Commissioner has confirmed the demand of service tax on the amount collected from the penalties under section 66E(e) of the Finance Act by holding that the same is a consideration received by the appellant ‘for tolerating an act’. The Commissioner has confirmed the demand of service tax on wheeling charges and cross-subsidy charges treating them to be a declared service.
The Commissioner has also confirmed the demand of service tax on supervision/incidental charges, transformer and meter testing charges and the rental amount collected from contractors by holding that the same is for a service contemplated section 65B(44) of the Finance Act.
The Bench consisting of Justice Dilip Gupta, President and P V Subba Rao, Technical Member held that “In the present case, the Department could not establish conclusively that the appellant had suppressed material facts with an intention to evade payment of service tax. Only a general statement has been made by the Commissioner that the appellant had willfully mis-stated that the consideration received by the appellant for providing the services was not leviable to service tax. Thus, it is not possible to sustain the demand made for the extended period of limitation.”
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