2012 (4) TMI 131 - AT - Service Tax

Application for stay - The facts of the case are that the appellant are engaged in the activity of selling of SIM cards and registered with the service tax department - It is contended on behalf of the appellant that on the same activity of selling of SIM cards they have to pay VAT to the State Government and under bona fide belief, service tax was also paid under the same challans - it is true that the appellant has paid the service tax regularly but under the State Government challans which was later transferred to the Central Government account, and that, as the appellant could not appear before the adjudicating authority, therefore, these facts were not considered by that authority - Appeal is allowed by way of remand to original adjudicating authority

Summary

Issues involved:
1. Stay application and appeal filed by the appellant.
2. Payment of service tax to State Government instead of Central Government.
3. Adjudication of demand for service tax, interest, and penalties.
4. Request for remand back to original adjudicating authority for fresh consideration.

Analysis:
1. The appellant filed a stay application and appeal before the Appellate Tribunal CESTAT, Mumbai. The Tribunal noted that although only the stay application was listed, both sides agreed to dispose of the appeal without the pre-deposit of interest and penalties since the service tax had already been paid by the appellant. Therefore, the Tribunal proceeded to take up the appeal for final disposal.

2. The case revolved around the appellant, engaged in selling SIM cards, paying service tax to the State Government instead of the Central Government. This led to a show cause notice being issued for the demand of service tax, which was adjudicated ex-parte due to the appellant's failure to respond to the notices. The impugned order confirmed the demand for service tax, interest, and penalties under the Finance Act. The appellant contended that they had paid service tax regularly under a bona fide belief, along with VAT to the State Government, resulting in a mistake on their part.

3. The Tribunal acknowledged that the appellant had indeed paid the service tax regularly, albeit through State Government challans that were later transferred to the Central Government account. Due to the appellant's inability to appear before the adjudicating authority, these facts were not considered during the adjudication process. Consequently, the Tribunal found it necessary to remand the matter back to the original adjudicating authority for a fresh consideration of the submissions made by the appellant.

4. As a result of the above observations, the Tribunal remanded the matter to the original adjudicating authority for a de novo adjudication of the case, providing the appellant with an opportunity to be heard. The appellant was directed to appear before the original adjudicating authority to schedule a hearing date. With these directions, the appeal and stay application were disposed of by the Tribunal.

This detailed analysis of the judgment highlights the key issues, arguments presented by the parties, and the Tribunal's decision to remand the matter back for fresh adjudication, ensuring a fair opportunity for the appellant to present their case.