Mrs. Archana Wadhwa, Judicial Member. - After hearing both sides, we find that the appellant was paying service tax as a provider of Telephone Services. Their accounting-system was that Accounts Officer located at various places collect cash received at their counters and make entries in a cash book on daily basis under different heads of account. At the end of each month, each Accounts Officer sends a Cash Account Current (CAC) summary to the Accounts Officer of the Telecom District Accounts Office, who complies this monthly account summary to prepare a consolidated statement i.e. Cash Account Current (CAC) of the Telecom District. CAC contains the actual bookings made on each day i.e. the date on which credits are received. Part of the collection are received from banks and post offices and accounted in the following month. A separate accounting is done by the computer section of the Telecom District, which obtains vouchers from all the counters and segregates the revenue receipts, they include the amounts paid through the post offices and designated banks by cheque. On the basis of these revenue receipts, they prepare a summary statement i.e. Sub Ledger Revenue (SLR). The differences between CAC and computer accounts SLR are different and are reconciled. The service tax was paid and returns filed on the basis of the CAC figures.

2. They were issued show-cause notices on 10-9-2002 and 24-3-2003 alleging short payment of service tax during the period August, 1995 to March, 1997 and April, 1997 to December, 2001 on the ground that the reconciliation of CAC and SLR, the actual amount of service tax received by them from their customers as reflected vary from the amount of service tax paid by them as shown in the CAC. The said demand so raised by the show-cause notices was confirmed by the Original Adjudicating Authority, vide his order dated 30-12-2004, he also confirmed interest and imposed penalty. The said order was upheld by the Commissioner (Appeals).

3. The learned Advocate has assailed the impugned order on the point of limitation. He submits that they have followed the prescribed procedure and submitted that there could be no mala fide on their part for non-payment of tax and it was only due to method of accounting and computation of service tax adopted by them, might have resulted in short payment of tax, though he submits that there is no actual shortage as all the receipts were accounted for though in subsequent months and tax stands paid accordingly.

4. We agree with the above contention. The notices were issued in September, 2002 for the period August, 1995 to March, 1997 and in March, 2003 for April, 1997 to December, 2001. As such, it is seen that they were beyond the normal period of limitation and in one case, show-cause notice has been issued after a period of five years. M/s. BSNL, being a PSU of Government of India, cannot be attributed with, any mala fide intention to evade payment of duty. As such, by holding the demand to be barred by limitation, we set aside the impugned order and allow the appeal with consequential relief to the appellant, without going into the merits of the case.