Auscan Consultants India Ltd Vs Commissioner of Central Excise and Service Tax (CESTAT Chandigarh)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, decided two appeals challenging a common order dated 28.08.2019 passed by the Commissioner (Appeals), CGST Chandigarh. The impugned order had confirmed demand of service tax along with interest and penalties, including ₹10,000 under Section 77 of the Finance Act, 1994 and ₹50,000 on the Managing Director.
The appellant was engaged in providing services to overseas educational institutions and received commission under agreements with foreign colleges and universities. The Department alleged that the appellant provided “intermediary services” under Rule 2(f) of the Place of Provision of Services Rules, 2012 (POPS Rules), read with Rule 9, and that the place of provision was the location of the appellant, making the services taxable in India. A show cause notice dated 02.06.2017 was issued alleging liability for the period 01.04.2012 to 31.03.2016. The Joint Commissioner confirmed the demand by order dated 06.04.2018, and the Commissioner (Appeals) upheld it.
Before the Tribunal, the appellant contended that the issue was settled by several decisions of the Tribunal holding that similar services did not qualify as “intermediary services” but constituted export of services. Reliance was placed on multiple decisions of CESTAT Chandigarh, New Delhi, Mumbai, and Hyderabad. It was also argued that the amendment to Rule 2(f) by Notification No. 14/2014-ST effective 01.10.2014 was prospective, and therefore demand for prior periods was unsustainable. On limitation, it was submitted that extended limitation under Section 73(1) was wrongly invoked as the appellant had informed the Department by letter dated 10.10.2012 seeking clarification regarding taxability, demonstrating absence of suppression. Judicial precedents were cited in support of limitation and bona fide belief.
