2010 (5) TMI 481 - AT - Service Tax

Security Agency Services - bona fide belief - Co-operative society consisting of ex-servicemen - Commissioner (Appeals) while setting aside the demand confirmed by the Adjudicating Authority has not considered the point of tax is due only on the amount of value of services, which has been collected by them from their service receivers - no reasoning given by the learned Commissioner (Appeals) for coming to such a conclusion by setting aside the Order-in-Original - order set aside and matter remanded back to the learned Commissioner (Appeals) to reconsider the issue afresh after following the principles of natural justice

Summary

Issues:
Appeal against Order-in-Appeal No. 31/2008 - Service Tax liability on Security Agency Services - Non-speaking order of the Commissioner (Appeals) - Lack of reasoning in setting aside the demand - Consideration of tax due only on the value of services collected - Remand for reconsideration.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore was filed by the Revenue against Order-in-Appeal No. 31/2008 concerning the Service Tax liability on 'Security Agency Services' provided by a co-operative society. The respondents had received a significant amount on contract bills during a specific period, leading to a demand for Service Tax. The respondents did not reply to the notice adequately, although oral submissions were made, indicating partial payment towards the demand. The Additional Commissioner confirmed the demand after observing that the amounts paid were already considered. The Commissioner (Appeals) later set aside the Order-in-Original, allowing the appeal based on a previous Tribunal decision. The Revenue challenged this decision, arguing that the Commissioner (Appeals) provided no reasoning in the non-speaking order, unlike the detailed findings in the Order-in-Original.

The Appellate Tribunal noted the absence of the respondent during the proceedings but proceeded with the appeal due to the narrow issue at hand. Upon reviewing the submissions and records, the Tribunal referred to a previous Final Order where it was established that the respondent, a co-operative society of ex-servicemen, had not paid Service Tax based on a genuine belief. The Tribunal emphasized that tax liability should only apply to the value of services collected from service receivers. Critically, the Tribunal found that the Commissioner (Appeals) lacked reasoning for setting aside the Order-in-Original, which necessitated a remand for reconsideration following the principles of natural justice.

Given the non-speaking nature of the Order-in-Appeal, the Tribunal refrained from expressing an opinion on the case's merits. Consequently, the impugned order was set aside, and the matter was remanded back to the Commissioner (Appeals) for a fresh consideration, emphasizing the need for a reasoned decision and adherence to natural justice principles.