Relief to Bharat Electronics: CESTAT Quashes Service Tax Demand for Receiving Overhauling Charges under Repair and Maintenance services on ground of Limitation

The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to Bharat Electronics by quashing the service tax demand for receiving the overhauling charges under repair and maintenance services on the grounds of limitation. 

Bharat Electronics Limited, the appellant assessee received service charges from Heavy Vehicle Factory (HVF), Avadi for overhauling parts of the gun control stabilizer under Repair and Maintenance service. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand for Service tax on the amounts received towards Repair and Maintenance service and on the amounts received towards liquidated damages and appropriate interest under Section 75 of the Finance Act, 1994. 

Raghavan Ramabadran, the counsel for the assessee contended that the assessee was mired in litigation and interpretation of law; the undisputed fact was also that the assessee was a public sector undertaking and hence, there was no scope to allege suppression to evade tax. Therefore, the invoking of an extended period of limitation was without any justification. 

Harendra Singh Paul, the counsel for the department relied on the decisions made by the lower authorities and contended that the revenue was rightly invoked the extended period of limitation and the demand raised was as per the law and liable to be sustained. 

The Bench observed that the invocation of an extended period by the department was not in order and was liable to be deleted. 

The two-member bench comprising Dinesha (Judicial) and Ajit Kumar (Technical) quashed the service tax demand while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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