On Issuance of SCN on Particular Issue has been Issued, no Extended Period can be Invoked on Same Issue for Subsequent Period: CESTAT [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that on issuance of the Show Cause Notice (SCN) on a particular issue has been issued then no extended period can be invoked on the same issue for the subsequent period.

The issue involved in the present case is that whether the chartered accountant service provided by the appellant, C C Chokshi & Co, as a subcontractor to the main contractor M/S. Deloitte Haskins and Sells is liable to service tax and whether the demand of Service tax is hit by limitation, in the fact that for the same service the show cause notices were also issued.

Shrayashree T, counsel who appeared on behalf of the appellant submitted in the present case also the demand is not sustainable on limitation and further submitted that the issue was not free from doubt moreover, it was clarified in the favour of the appellant vide Circular No. F.No. 341/43/96- TRU dated 31.10.1996 according to which the appellant being sub-contractor is not liable to pay the service tax.

G. Kirupanandan, Assistant Commissioner (AR) who appeared on behalf of the Revenue reiterated the finding of the impugned order.

A Coram comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “it is clear that the issue has been raised earlier also by the Revenue therefore, the activity of the appellant was very much known to the department, hence, the department was not prevented to issue the show cause notice for the subsequent period within a normal time period. It is also noted that during the relevant period i.e. 2005 -2006, the board circular dated 31.10.1996 was in force and according to which the appellant was not required to pay the service tax being a sub-contractor.”

Observing that the demand is clearly hit by limitation the Bench relied on the judgment in Nizam Sugars Factory vs. Collector of Central Excise, wherein it was held that once on a particular issue the show cause notice has been issued, on the same issue for the subsequent period no extended period can be invoked as demand for the extended period do not sustain being time bar.

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