Demand invoking extended period unsustained as notice issued after two years of departmental knowledge

Commissioner Service Tax Vs Spicejet Ltd (CESTAT Delhi)

CESTAT Delhi held that entire demand invoking extended period of limitation unsustainable as show cause notice was issued after more than two years of the facts coming to the knowledge of the department.

Facts- This appeal has been filed by the department to assail the order dated 31.03.2016 passed by the Commissioner of Service Tax, Delhi-III, Commissionerate, New Delhi by which the demand of service tax of Rs. 4,01,27,641/- in respect of the excess baggage charges recovered from the passengers by M/s. Spicejet Ltd. has been dropped and the respondent has been allowed CENVAT credit of Rs. 21,54,80,008/-.

Conclusion- Held that the audit of the statutory records of the respondent was conducted from 02.05.2012 to 08.05.2012. The same issues and demand were suggested in the audit report. The respondent had also been filing ST-3 returns. However, the show cause notice was only issued on 21.10.2014, i.e. after more than two years of the facts coming to the knowledge of the department. The department could have issued the show cause notice within the normal period of limitation. The extended period of limitation could, therefore, not have been invoked by the department.

FULL TEXT OF THE CESTAT DELHI ORDER

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