2007 (2) TMI 107 - Commissioner - Service Tax

Demand ,interest and penalty - Department contended that appellant is engaged in rendering courier service and accordingly demand were made along with interest and penalty - Case remanded to adjudicating authority for considering the issue afresh

Summary

Issues:
1. Demand of service tax not remitted fully to the Government account.
2. Ignoring arguments inconvenient to the Department.
3. Applicability of service tax when acting as co-loaders for other courier agencies.
4. Sustainment of bank statements as evidence.
5. Discrepancy in taxable service value compared to Department's figures.
6. Verification of documents and remand of the case.

Analysis:

1. The appellant, engaged in Courier Service, challenged the demand of service tax not fully remitted to the Government account. The impugned order confirmed the demand of service tax, Education Cess, interest, and penalties. The appellant argued that the order failed to consider their contentions, citing legal precedents to support their claim that a non-speaking order is void. They emphasized that they mainly acted as co-loaders for other courier agencies, relying on a circular by the Central Board of Excise and Customs exempting co-loaders from service tax.

2. The appellant contended that the Department ignored arguments inconvenient to them, which rendered the order void. They presented legal decisions to strengthen their argument. The appellant highlighted that they did not provide direct services to customers in most cases but acted as co-loaders, hence challenging the applicability of service tax based on the nature of their operations.

3. Regarding the sustenance of bank statements as evidence, the appellant argued that it is the Department's duty to prove the correlation between bank transactions and taxable value collected. They referenced legal decisions to support their stance and emphasized the need for proper verification of financial documents to determine the actual service tax liability.

4. The appellant disputed the Department's figures, claiming that the taxable service value and service tax due were lower than estimated based on balance sheet figures. They argued that the Department's calculations were inflated due to financial considerations unrelated to service tax liability, citing legal precedents to support their position.

5. The judgment acknowledged the need for thorough verification of documents and remanded the case to the lower adjudicating authority. It emphasized the importance of considering the appellant's submissions, including the claim of exporting finished goods. The decision highlighted the necessity of following the Board's circular in reevaluating the case, ensuring cooperation from the appellant in providing all required documents for a fair and lawful decision-making process.