2010 (12) TMI 977 - AT - Service Tax

Security services - appellant collecting service charge but not paying the service tax - actual amount received towards service tax had been suppressed - appellants produced evidence to show that they had received service amounts not only for providing security personnel but also providing labour for doing labour work & also submitted that even in the show-cause notice it was mentioned that the appellants have provided labour services apart from security services - Held that - In the absence of agreements relating to the amounts payable and received and in the absence of supporting documents, mere submission of statement cannot be said to be sufficient. However since even the statement given by the appellant has not been got verified and even the show-cause notice also as mentioned above recognizes the fact that appellant was providing different types of services, this is a matter which is required to be verified since it has an implication in the quantum of service tax payable - order is set aside and the matter is remanded to the original adjudicating authority who shall give an opportunity to the appellant to present their case once again and pass a well reasoned order.

Summary

Issues:
1. Non-payment of service tax by the appellant.
2. Imposition of penalties under sections 76, 77, and 78 of the Finance Act, 1994.
3. Appeal against the original adjudicating authority's decision.
4. Verification of services provided by the appellant.

Analysis:

1. The appellant, engaged in providing security services, had failed to pay service tax despite collecting service charges. The proprietor admitted to evading service tax and had paid a portion of the amount owed. The original adjudicating authority confirmed the demand for service tax, interest, and penalties under various sections of the Finance Act, 1994. The Commissioner (Appeals) upheld the penalty under section 76 but waived the penalty under section 78 due to excess payment made by the appellant.

2. The matter faced multiple adjournments due to the appellant's absence or adjournment requests. The appellate tribunal, considering the repeated delays, proceeded with the decision-making process.

3. The appellant argued that they provided both security and labor services, supported by evidence of segregation of amounts received for each service. However, the lack of detailed agreements and supporting documents led to uncertainty regarding the nature of services provided and the corresponding tax liabilities. The tribunal noted discrepancies in the evidence presented and decided to remand the matter to the original adjudicating authority for a thorough review.

4. The tribunal set aside the impugned order and directed the original adjudicating authority to re-examine the case, emphasizing the need for comprehensive documentation and verification of the services provided by the appellant. The appellant was instructed to cooperate fully in the process to facilitate a well-reasoned decision based on verified information.