2011 (11) TMI 219 - AT - Service Tax

Mis-declaration in ST-3 returns of the gross value of the service provided - difference in figures in the balance sheet and the figures reflected in the ST-3 returns Held that - The balance sheet figures are the income figures on accrual basis while the figures shown in ST-3 return were of actual receipt of payment. Therefore, without expressing any opinion on the merits of the case, the impugned order is set aside and matter is remanded back to adjudicating authority to reconsider the issue afresh. Appeal allowed by way of remand to adjudicating authority.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of amount under Finance Act, 1994.
2. Differential Service Tax confirmed by adjudicating authority.
3. Discrepancy in figures between balance sheet and ST-3 returns.
4. Mis-declaration of gross value of service provided.
5. Reconciliation of figures to determine differential duty liability.
6. Need for reconsideration by adjudicating authority.
7. Principles of natural justice to be followed in reconsideration.

Analysis:
The case involved a Stay Petition seeking waiver of pre-deposit of a specified amount under the Finance Act, 1994. The differential Service Tax was confirmed by the adjudicating authority due to a discrepancy in figures between the balance sheet and ST-3 returns filed by the assessee. The first appellate authority upheld the decision, leading to the appeal before the Tribunal. The Tribunal noted the mis-declaration of the gross value of the service provided and the need for a thorough examination of the issue. The Chartered Accountant representing the assessee highlighted discrepancies in the figures, explaining the basis for the tax calculation in the ST-3 returns. The Tribunal, after considering the submissions and records, found it necessary for the adjudicating authority to reevaluate the matter.

The Tribunal emphasized the importance of reconciling the figures to determine the actual liability and directed the adjudicating authority to reconsider the issue afresh. It was noted that the balance sheet figures represented income on an accrual basis, while Service Tax liability should be based on the actual receipt of payment for services provided. The Tribunal refrained from expressing any opinion on the merits of the case but stressed the need for the adjudicating authority to follow the principles of natural justice during the reconsideration process. The Chartered Accountant was instructed to cooperate with the adjudicating authority and present all necessary submissions during the personal hearing. Ultimately, the Stay Petition and appeal were disposed of by remanding the case back to the adjudicating authority for a fresh review, ensuring a fair and just determination in accordance with the law.