2026-VIL-1210-KAR-ST
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SERVICE TAX High Court Cases

Service Tax - Invocation of extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 where classification of services was disputed - Respondent rendered IT facility management services under agreements with clients and claimed that the services were business auxiliary services and not taxable, whereas the Commissioner held them taxable as management consultant service and invoked the extended period alleging suppression, as the nature of services was not disclosed - The Tribunal upheld the classification on merits but held the extended period not invocable as there was no suppression, the Department being aware of the services through trial balance, audit report and the explanation furnished earlier, and restricted the demand to the normal period - Revenue preferred appeal under Section 35G of the Central Excise Act, 1944 - Whether the Revenue was entitled to invoke the extended period of limitation - HELD - A notice beyond one year from the relevant date can be sustained only if the short payment is by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention with intent to evade payment of tax. The allegation in the SCN that claiming the services as business auxiliary services amounted to suppression has no merit, as the controversy involves only classification of services. The Tribunal found that the services rendered were clearly discernible from the accounts, the audit report and the explanation furnished, and the Revenue did not contest that these documents failed to disclose the services - No infirmity found in the decision of the Tribunal that the extended period was not available and the appeal is dismissed
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