No concealment of facts or malicious intent can be invoked in disputes over the interpretation of the law: CSETAT, Ahmedabad.

In one case, the Ahmedabad Customs, Excise and Services Appeal Court recently ruled that disputes over the interpretation of the law cannot be alleged to be fraudulent or obscure. According to the facts, a company (complainant) that supplies workers to various industrial associations in accordance with the agreements with the service recipients. In the matter at hand, it was established in fact that the applicants would charge 10 percent of the actual wages to be paid to workers hired as service costs. The company has thus treated wages as reimbursable costs and relieved the service tax on the ten percent service fees.

In May 2011, the company was served an issuance notice demanding service tax for the period from 2005-06 to 2009-10 as the company was required to pay service tax on the gross value that includes wages paid to workers. On the other hand, the company argued that wages were clearly the reimbursable costs and, since they were not withheld, they could not be subject to service tax.

In view of all the facts and circumstances of the case, the court ruled that the time of dispute, ie 2005-06 to 2009-10, and the notice of the reason was published on May 19, 2011. It is also noted that the complainant submitted her ST-3 report for the period October 2009 to March 2009 on April 27, 2010. According to the aforementioned facts, the total demand is outside the normal period and below the extended limitation period. In accordance with the discussion above and the findings supported by the various limitation judgments. Therefore, the entire demand is statute-barred.

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