2011 (7) TMI 552 - AT - Service Tax

Centralized registered accounting system - various units located in India and the service tax payment in respect of GTA service received by the Kutch unit - No registration was taken by the Kutch unit of the appellant and no centralized registration was also obtained - Appellant had committed a procedural error by not taking the registration in respect of their Kutch unit - Even before the learned Commissioner (Appeals), copies of the challans were produced but a full reconciliation statement showing that service tax has been paid in respect of their Kutch unit was not produced - since the reconciliation statement could not be produced before the lower authorities, the matter may be remanded to the original adjudicating authority before whom they would produce full reconciliation statement and satisfy that the tax has been paid by their Gurgaon unit and lapse is only procedural.

Summary

Issues involved:
Failure to obtain registration for a unit leading to non-payment of service tax, appeal for remand based on procedural error, request for submission of reconciliation statement to prove tax payment, acceptance of pre-deposit for appeal consideration.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad, involved a case where an appellant had a centralized registered accounting system for various units in India. The issue arose when the Kutch unit failed to obtain registration and did not pay service tax from January 2005 to October 2005. The service tax payment for GTA service was made by the head office, leading to an audit revealing the non-payment by the Kutch unit. The impugned order demanded service tax with interest and imposed a penalty due to this non-compliance.

The appellant, represented by an advocate, admitted to a procedural error in not obtaining registration for the Kutch unit. During the appeal, the advocate submitted that although challans were produced, a full reconciliation statement proving service tax payment for the Kutch unit was not presented. The advocate argued that reconciliation for two months had been done, indicating full payment by the head office for the Kutch unit. The appellant aimed to reconcile and demonstrate that the head office's payments covered those of the Kutch unit, framing the lapse as a procedural error rather than tax evasion. The advocate requested a remand to the original adjudicating authority to provide a comprehensive reconciliation statement and prove tax payment.

In response to the submissions, the impugned order was set aside, and the matter was remanded to the original adjudicating authority. The appellant was instructed to produce relevant documents, including a reconciliation statement, to establish service tax payment. The original adjudicating authority was directed to reconsider the issue in light of the submissions made during the appeal. The tribunal clarified that no opinion was expressed on the contentions presented. Additionally, the appellant assured that no refund claim would be filed for the amount already deposited until the original adjudicating authority made a decision. Both the stay petition and appeal were resolved based on the terms outlined in the judgment.