2026-VIL-1325-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax – Demand invoking Extended Period of Limitation – Appellant-EOU providing business auxiliary services, sub-contracted data capturing and data processing services to its wholly owned subsidiary. The Department issued a Show Cause Notice on July 24, 2009, for the period 2004-05 to 2006-07, demanding service tax on the basis that the subcontracted activities constituted taxable business auxiliary services - Whether the extended period of limitation under Section 73(1) can be invoked when the Appellant did not file returns or register for the service and the activity was sought to be taxed based on the Appellant's own books of account with no suppression of facts - HELD - Limitation is a jurisdictional issue that goes to the root of the authority's power to issue the notice and decide on the merits. The extended period can be invoked only upon establishing willful and deliberate intent to evade payment of service tax. Mere non-registration, non-filing of returns or failure to disclose an activity does not automatically constitute suppression if the Appellant held a bona fide belief that the activity was not taxable under the law - In the present case the Appellant did not suppress facts as the disputed activity was recorded in its own books of account. The evidence did not establish a willful and deliberate intent on the part of the Appellant to evade the tax. The Show Cause Notice issued after the expiry of the normal limitation period is without jurisdiction and void. The demand is time-barred and unsustainable - The impugned order is void, and a nullity in the eye of law – The appeal is allowed
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