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December 2011

Assessee provided space at their authorised service station to financial institutions — Qualified as Business Auxiliary Services — Assessee did not approach Revenue seeking clarification — Held assessee cannot be charged with willful intent to evade duty on the basis of non-approaching for clarification, longer period of limitation inapplicable.

By Puloma Dalal, Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Facts:

The assessee provided space at their authorised service station to financial institutions. The service provided by the assessee to the financial institutions amounted to Business Auxiliary Services according to the Revenue. The Revenue contended that the assessee did not pay service tax at the required time and thus was liable to be charged with willful intent to evade duty as they did not approach the Revenue seeking clarification and the Department discovered only during investigation by the Department.

Held:

It was established that mere non-approaching the Revenue seeking clarifications cannot be a valid reason for applying extended period of limitation unless the same is done, with a willful intent to evade payment of duty. The demand was held as barred by limitation.

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