Southern Power Distribution Company of Andhra Pradesh Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad)
CESTAT Hyderabad held that extended period of limitation can be invoked only when there is willful suppression of facts with an intention to evade payment of service tax.
Facts-
The issue involved is whether the charges collected in connection with transmission of electricity even after 01.07.2012 would be subjected to service tax, as according to the Department they would not be exempted under section 66D(k) of the Finance Act, 1994.
Conclusion-
Held that the activities that are related/ancillary to transmission and distribution of electricity would be exempt from payment of service tax since transmission and distribution of electricity is exempted. It is also clear from aforesaid decision that all services related to transmission and distribution of electricity are bundled services, as contemplated under section 66F(3) of the Finance Act, and are required to be treated as a provision of a single service of transmission and distribution of electricity, which service is exempted from payment of service tax.
With regard to extended period of limitation it is held that even when an assessee has suppressed facts, the extended period of limitation can be evoked only when ‘suppression’ is shown to be willful and with an intent to evade payment of service tax.
In the present case, the Department could not establish conclusively that the appellant had suppressed material facts with an intention to evade payment of service tax. Only a general statement has been made by the Commissioner that the appellant had willfully mis-stated that the consideration received by the appellant for providing the services was not leviable to service tax. Thus, it is not possible to sustain the demand made for the extended period of limitation.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
M/s. Southern Power Distribution Company of Andhra Pradesh Ltd.1 has filed this appeal to assail the order dated 16.04.2019 passed by the Commissioner of Central Tax, Tirupati GST Commissionerate, Tirupati2 by which the demand has been confirmed and an order for recovery from the appellant under the proviso to action 73(1) of the Finance Act, 19943 with interest and penalty.
2. This appeal has been filed against demand of service tax on amount received by the appellant against activities performed during the period from 01.07.2012 to 30.06.2017, for which show cause notice dated 28.04.2018 was issued alleging suppression of facts with intent to evade payment of service tax.
3. The details of the demands confirmed in the impugned order and the reasons, in brief, are as follows:
