The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi Bench ruled that the period of limitation to issue notice increased from 1 year to 18 months for raising demand for non-payment of service tax.
The appellant, M/s Krishi Upaj Mandi Samiti Baran was established by the Rajasthan State Government under the provisions of The Rajasthan Agriculture Produce Markets Act, 1961. To fulfill the obligations of providing necessary facilities of marketing of agricultural produce cast upon the appellant, the appellant let out shops or godowns within the market area and collected an allotment fee from the merchants or agriculturalists.
It is the collection of this amount that led to the issuance of a show cause notice dated 08.05.2014. The show cause notice mentions that the appellant had rented out its immovable properties to various business firms/individuals on periodical rent/lease amount and the services provided by the appellant would fall under the category of ‘renting of immovable properties’ defined under section 65(90a) of the Finance Act, 1994 and made taxable w.e.f. 01.06.2007 under section 65(105)(zzzz) of the Finance Act.
Ms. Bhanu Shree Jain, counsel appearing for the appellant contended that the normal period of limitation for the rising demand for non-payment of service tax as per section 73 of the Finance Act for the period 01.04.2012 to 28.05.2012 is one year from the elevant date. In the present case, the relevant date is the due date of filing of return i.e. 25.11.2012. Thus, the period of limitation will expire on 25.11.2013. The impugned show cause notice has been issued on 08.05.2014. Thus, the demand raised for the period 01.04.2012 to 28.05.2012 is barred by limitation.
Ms. Jain urged that Section 73(1) of the Finance Act was amended with effect from 28.05.2012 and the period of limitation was extended to 18 months. It is settled law that the amendment in the period of limitation cannot revive a dead claim. Thus, the demand for the period 01.04.2012 to 28.05.2012 will be governed by the period of limitation existing before amendment.
The coram headed by the President Justice Dilip Gupta and Technical Member P.V.Subba Rao held that the relevant date in the present case is 25.11.2012. Prior to this date on 28.05.2012, section 73(1) of the Finance Act was amended and it was provided that the Central Excise Officer could issue a notice within eighteen months from the relevant date. The show cause notice was issued on 08.05.2014, which would be within eighteen months from 25.11.2012.
“The Commissioner (Appeals), therefore, committed no illegality in holding that the demand for the period 01.04.2012 to 30.06.2012 was within the statutory period of eighteen months from the relevant date,” the CESTAT observed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
