The CESTAT, Ahmedabad in C C Chokshi & Co. v. C.S.T., Service Tax, Ahmedabad [Service Tax Appeal No. 10024/2014- DB dated August 03, 2023] held that once a notice has been issued on a particular issue the demand through fresh notice for the same period cannot be invoked.
Facts:
M/s. C C Chokshi & Co. (“the Appellant”) a Chartered Accountant firm provides services as a sub-contractor to the main contractor. The Appellant had not paid any service tax for the period 2005 – 2006 by relying on Circular No. F. No. 341/43/96- TRU dated October 31, 1996 which states that sub-contractor was not required to pay the service tax.
The Revenue Department (“the Respondent”) issued Show Cause Notice demanding service tax on services provided to main contractor along with interest and penalty.
Before the CESTAT Ahmedabad, the Appellant contended that demand of Service tax is hit by limitation and the issues is already settled by the CESTAT, Ahmedabad vide an Order No. A/ 10305/2019 dated January 23, 2019 in favor of Appellant.
Issue:
Whether the Revenue Department can issue notice for the demanding duty for the period for already settled period?
Held:
The CESTAT, Ahmedabad in Service Tax Appeal No. 10024/2014- DB held as under: –
- Noted that, in the instant case there was no dispute of taxability on merit but only on applicability of bar of limitation.
- Observed that, Circular No. F. No. 341/43/96- TRU dated October 31, 1996 was in force and accordingly the Appellant was not required to pay the service tax being a sub-contractor. For this reason, also the Appellant had a bona fide belief that they are not liable to pay any service tax.
- Opined that, the Respondent was not prevented to issue the show cause notice for the subsequent period within a normal time period but cannot invoke extended period.
- Held that, the Appellant was not liable to pay service tax on the services provided as sub-contractors.
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