Penalty not payable for service tax not paid on debatable issue

PSL Limited Vs C.C.E. & S.T. Rajkot (CESTAT Ahmedabad) Learned Counsel argued that they had a bonafide belief that activity of coating of pipelines do not qualify as Business Auxiliary Service as neither the said activity amounted to “production” of goods nor it was conducted “on behalf of client”. It was argued that there was no suppression and none of the ingredient on Section 73 of the Finance Act, 1994 are present to invoke extended period of limitation. It is apparent that the revenue was fully aware of the activities carried on by the respondent. In the circumstances, as righ...