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Issues involved: Demand of service tax and education cesses for the period from October 2008 to March 2010, alleged short payment due to rounding off, appeal against Commissioner's order.
The judgment addresses the appellant's application seeking waiver and stay against a demand of Rs. 63,14,815/- for service tax and education cesses u/s the impugned demand on telecom service. The demand was based on short payment of service tax compared to the taxable value declared in the ST-3 returns for the period. The appellant provided services through post-paid and pre-paid modes, with the demand relating to the latter. The issue arose from rounding off amounts on pre-paid cards due to difficulty in collecting fractions of a rupee. An audit revealed a shortfall in service tax payment, leading to the demand. The appellant contested the demand, leading to penalties and the current appeal against the Commissioner's order. The judgment found a prima facie case for the appellant regarding the impugned demand. It noted that the appellant was entitled to round off service tax under relevant legal provisions, including Section 37D of the Central Excise Act and Section 83 of the Finance Act. The CBEC's Supplementary Instructions 2005 also allowed rounding off of duty in invoices. Additionally, a prima facie case was established for the appellant on the ground of limitation in this case. Consequently, waiver of predeposit and stay of recovery were granted in favor of the appellant as requested.
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