By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Extended period of limitation cannot be invoked when benefit of section 80 of the Finance Act, 1994 is granted since it meant acceptance of presence of bonafide intentions by the original authority.
Facts:
The SCN was issued on 01-10-2010 for the period 01-04-2005 to 31-03-2010. The appellants pleaded that the extended period of limitation could not be invoked in the present case since the Joint Commissioner did not impose any penalty by invoking section 80 on the ground of reasonable cause. Therefore, it can be conceded that there was no suppression or misstatement with an intent of evasion. Further, there were various Tribunal decisions laying down that in case of nonimposition of penalty with the finding that there was no intention to evade taxes, the analogy must be drawn with respect to extended period of limitation also.
Held:
Following various precedents, the appeal was allowed on the grounds of limitation by observing as under:
Service tax was not deposited due to unawareness and there was also findings of the Joint Commissioner of Service Tax regarding reasonable cause to extend the benefit of section 80.
Harmonised reading of section 73 and section 80 of the Finance Act, 1994, leads to conclusion that the appellants should be bonafide to take the benefit of section 80 of the Finance Act, 1994. Therefore, once such benefit was extended to the appellants, it was not open for the adjudicating authority to invoke extended period of limitation. As such, the matter was remanded back to the original authority to quantify the service tax demand for the normal period of limitation.
