The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the service tax demand thereby granting relief to M/s. Central Registry of Securitisation, Asset Reconstruction and Security Interest of India (CERSAI), the appellant.
The appellant has filed the appeal to assail the order passed by the Commissioner, Service Tax, Delhi which the demand has been confirmed with interest and penalty by invoking the extended period of limitation contemplated under Section 73 of the Finance Act 1994.
The issue involved in the present appeal relates to demand of service tax on the fees received by the appellant from banks/financial institutions for registration of transactions of securitization, asset reconstruction and security deposits under the category of business support service and online information and database access or retrieval service.
The department, however, believed that the appellant had failed to pay service tax in respect of such services provided by it and, accordingly, a show cause notice proposing a demand of service tax of Rs. Five crores along with interest and penalties.
Two principal submissions have been made by the counsel for the appellant for setting aside the impugned order. The first is that to the extended period of limitation under the proviso to Section 73(1) of the Finance Act could not have been invoked in the facts and circumstances of the case and the second is that service tax cannot be proposed and confirmed under two different heads of service for one single activity.
The Coram comprising Justice Dilip Gupta, President and Hemambika R Priya, Technical Member noted that “The appellant is a government company and, therefore, there is a rebuttable presumption regarding non-existence of any of the ingredients mentioned in the proviso to Section 73(1) of the Finance Act. The show cause notice does not rebut the presumption. As the entire demand that has been confirmed is for the extended period of limitation, the order confirming the demand cannot be sustained.”
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