Service Tax - BAS – Promoting Real Estate in the Air – Jetlite wins huge case in Tribunal
THIS case, as they say, had a chequered history – in a short span of time. It all started with a Show Cause Notice dated 28.10.2008. The issue was displaying logo of Sahara Corporation in the Boarding Pass of the then Sahra Airlines, which later became JETLITE. The Department was of the view that this was Business Auxiliary Service and tax was payable. The learned Commissioner confirmed the demand of about Rs . 129 Crores with an equal amount of penalty with attendant interest.
On appeal to the tribunal, the Tribunal ordered pre-deposit of Rs . 100 Crores -
Naturally the assessee rushed to the High Court. The High Court by an order dated 20.08.2010 directed payment of cash of Rs . 60 Crores and a bank guarantee of Rs . 10 Crores and directed the Tribunal to decide the appeal by the end of November. The assessee appealed to the Supreme Court, but did not get any relief.
The Tribunal finally decided the appeal on 20.12.2010, holding that no Service Tax was payable.
Interestingly, the Tribunal made some very valid and relevant observations that ‘the adjudicating authority cannot travel beyond the Show Cause Notice'; that the department has to prove the charge made in the Show Cause Notice and that Failure of the department to prove the charge can neither shift the burden, nor can give any advantage to the department:
The Tribunal emphatically held that it is now settled law that with the introduction of new entry without any bifurcation of the old entry and without disturbance of any old entry would disclose non inclusion of the subject of the new entry in the old existing entries.
Based on this order by the Bench headed by the President, the Government, especially at the lower levels should now stop their idle pursuit of dead issues and concentrate more on collecting Revenue. At least now they should not try to tax works contract under a different service prior to 1.6.2007 and many such other new services. And the Department should be sure about the service under which they want tax their victim, before issuing a Show Cause Notice. In most cases the department is not sure of the classification and their Show Cause Notices allege suppression and intent to evade payment of duty!
In a Departmental test, an Assistant Commissioner was asked, "When can you invoke the five year period to issue a Show Cause Notice?". "When the one year period has lapsed", was the smart reply of the young Assistant Commissioner!
We bring you this order today. Please see Breaking News.