CESTAT sets aside Service Tax Demand as Invocation of Extended Limitation under Section 73(1) Not Sustainable [Read Order]
CESTAT set aside the service tax demand on Oswal Cargo Movers, holding extended limitation under Section 73(1) was an unsustainable absence of suppression or intent to evade.
![CESTAT sets aside Service Tax Demand as Invocation of Extended Limitation under Section 73(1) Not Sustainable [Read Order]](https://images.taxscan.in/h-upload/2025/08/26/2080571-cestat-sets-service-tax-demand-taxscan.webp "CESTAT sets aside Service Tax Demand as Invocation of Extended Limitation under Section 73(1) Not Sustainable [Read Order]")
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the appeal filed by Oswal Cargo Movers and set aside the demand of service tax, interest, and penalty, holding that the invocation of the extended period of limitation under section 73(1) of the Finance Act, 1994, was not sustainable as the necessary ingredients such as fraud, collusion, suppression of facts, or intent to evade payment of tax were absent.
The assessee, Oswal Cargo Movers, was engaged in providing cargo handling services. A Show Cause Notice dated 05.10.2012 was issued to the appellant alleging that the appellant was providing ‘cargo handling service’ and not ‘transportation of goods by road service’, and therefore sought to demand service tax by invoking the extended period of limitation.
The Commissioner, while confirming the demand, invoked the extended period under section 73(1) of the Finance Act, 1994, on the ground that the assessee had failed to discharge service tax liability on the taxable receipts.
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Challenging the order, the assessee argued before the Tribunal that all receipts were properly recorded in the books of accounts and were available to the Department for verification.
The assessee contended that there was no suppression, misstatement, or any intention to evade tax, and therefore, the extended period of limitation could not have been invoked and also relied on judicial precedents that the extended period is available only where deliberate intent to evade payment of service tax is established.
The Tribunal observed that the Department had not brought on record any material evidence to show that the assessee had suppressed facts or had any intent to evade payment of tax.
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The bench comprising Justice Dilip Gupta (President) and Hemambika R Priya (Technical Member) noted that the mere failure to pay tax cannot justify the invocation of the extended limitation period. Since the normal period had already expired, the SCN issued by invoking the extended period under section 73(1) was held to be unsustainable.
Accordingly, the CESTAT bench set aside the demand of service tax, interest, and penalty confirmed by the Commissioner and allowed the appeal filed by Oswal Cargo Movers. The appellant was represented by B. L. Narsimahan along with Ashutosh Choudhary, while Aejaz Ahmad represented the revenue.
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