Order date – 12 August 2022

Facts – 

• The appellant, M/s. Tide Marketing Private Limited, was issued a Show Cause Notice dated 30.09.2011 by invoking the extended period of limitation demanding Service tax of Rs.5,15,277/- for the period 2006- 07 to 2010-11 under the category of ‘Business Auxiliary Service’ alleging that the amount has been received by the Appellant as commission from Amway and Britt. 
• Demand of Rs.1,98,645/- was confirmed and appropriated from the amount of Rs.5,74,753/- already paid by the assessee. Amount of interest has not been calculated in the adjudication order but the Appellant has paid Rs.1,22,331/- towards liability of interest.
• The Appellant submitted that the commission in respect of volume purchase by second level of distributor for the period from 2006-07 to 2010-11 earned by the Appellant is to the tune of Rs.42,78,252/- and Service tax on the same was Rs.1,98,625/- and the same has been paid along with interest before issuance of Show Cause Notice and therefore the proceedings should have been concluded.
• Aggrieved the appellant filed an appeal.

Issue – 

• Whether the extended period of Service tax demand with penalty and interest is sustainable?

Order – 

• The Tribunal agreed to the contention of the Appellant and held that the proceedings should have been concluded before issuance of the Show Cause Notice. 
• Therefore they set aside the penalties imposed and do not interfere with the Service Tax as confirmed in the Adjudication order. 
• Accordingly, the impugned order is set aside and the Appeal, filed by the Appellant, is allowed with consequential relief, as per law.