2011 (3) TMI 803 - AT - Service Tax

Demand - Rent-a-Cab Services - appellate authority has not looked into the merits and has gone in by the fact that the appellant has accepted their duty liability - Merely because the same was deposited by them before issuance of show cause notice, is no reason to arrive at the finding that appellant is not contesting - Appeal is thus allowed by way of remand

Summary

Issues:
1. Confirmation of service tax under "Rent-a-Cab Services" category.
2. Lack of discussion on merits and duty liability by Commissioner (Appeals).
3. Appellant contesting demand of service tax and penalty imposition.
4. Necessity of remanding the matter for decision on merits.

Analysis:

1. The judgment involves the confirmation of service tax amounting to Rs. 1,04,664 against the appellant, categorized under "Rent-a-Cab Services." The appellant argued that the services provided, involving the supply of vehicles for employee and goods transportation under an agreement with BSNL, do not fall under this category. The Commissioner (Appeals) failed to analyze the terms of the agreement and did not address this issue, focusing solely on the penalty amount without considering the duty liability aspect.

2. The lack of discussion on the merits and duty liability by the Commissioner (Appeals) was acknowledged by the learned DR representing the Revenue. It was accepted that the Commissioner (Appeals) only provided findings on the penalty aspect and did not delve into the substantive issues. Consequently, the matter was deemed necessary to be remanded to the Commissioner (Appeals) for a thorough examination of the merits of the case.

3. The appellant contested the demand of service tax and the imposition of a penalty, asserting that they had paid the service tax before the issuance of the show cause notice, thus arguing against the imposition of a penalty. The Tribunal noted that the appellant had indeed contested the confirmation of the service tax demand, despite making a partial payment of Rs. 40,000 before the notice was issued. This led to the conclusion that the Commissioner (Appeals) erred in assuming that the appellant had accepted their duty liability, warranting a remand for a detailed consideration of the case.

4. In light of the above issues and discrepancies in the Commissioner (Appeals) order, the Tribunal set aside the impugned order and remanded the matter back to the Commissioner (Appeals) for a fresh decision on the merits, emphasizing the need for a comprehensive review based on the precedent decisions of the Tribunal. The appeal was allowed on the grounds of remand, highlighting the importance of a detailed examination of the case to ensure a just and accurate determination.