2026-VIL-346-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Non-payment of service tax, Invocation of Extended Period of Limitation - Appellant had paid the entire service tax demand along with interest before the issuance of the show-cause notice. However, the Adjudicating Authority invoked the extended period of limitation under Section 73(4) of the Finance Act, 1994 and confirmed the demand along with penalties - Whether the invocation of the extended period of limitation and the consequent demand of service tax, interest and penalties were legally tenable – HELD - The show-cause notice did not contain any specific allegation of fraud, collusion, willful misstatement or suppression of facts with the intent to evade payment of service tax, which is a mandatory requirement for invoking the extended period of limitation under Section 73(4). Mere non-payment of taxes is not equivalent to collusion or willful misstatement, and something more needs to be shown to construe the acts as fit for the applicability of the proviso to Section 73(1) - Further, the appellant had paid the entire service tax demand along with interest before the issuance of the show-cause notice. The Revenue has not brought anything on record to evidence that the appellant's explanation was incorrect or deserved to be disbelieved. In such a scenario, the proceedings should have been concluded under Section 73(3) of the Finance Act, 1994, and the invocation of the extended period of limitation is untenable - The impugned order is set aside and the appeal is allowed
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