2012 (7) TMI 472 - AT - Service Tax

Default in payment of Service Tax - Courier Service - M/s. Professional Courier Services made a claim that they were only providing co-loader service and the appellant was the one who had provided courier service to the service receivers - Held that - CA of the appellants submitted a certificate issued by Regional Manager of M/s. Professional Couriers certifying that appellant was working as employees in its branch and income of period 1999-2000 and 2000-2001 was of M/s. Professional Couriers - the appellant became a franchisee w.e.f. March 2001 only and prior to that period they were only employees and the liability had to be discharged by the M/s. Professional Courier Services - as the matter is required to be reconsidered the impugned order is set aside and the matter is remanded to the original adjudicating authority.

Summary

Issues:
1. Liability for service tax on courier service provided by the appellant.
2. Dispute resolution scheme and liability acceptance.
3. Claim by the appellant of being an employee before becoming a franchisee.
4. Certificate issued by M/s. Professional Couriers regarding income for 1999-2001.

Analysis:
1. The appellant was held liable for service tax on the amount received for providing courier service, despite M/s. Professional Couriers claiming to provide only co-loader service. The demand was confirmed due to the appellant's failure to pay the service tax. The appellant's participation in the dispute resolution scheme was considered as acceptance of liability. The appeal against the Commissioner (Appeals) was rejected.

2. The appellant submitted a certificate from M/s. Professional Couriers stating that the income for 1999-2001 belonged to the courier service provider. The original adjudicating authority rejected the appellant's claim of being an employee before becoming a franchisee, citing the liability falling on the service provider as per the Board's circular. The appellant alleged that M/s. Professional Couriers orally promised to pay the service tax under the amnesty scheme, but lacked evidence to support this claim.

3. The show cause notice highlighted M/s. Professional Couriers' claim of providing co-loader service and not paying the service tax on the amount received from the appellant. The matter was to be reconsidered in light of the certificate provided by M/s. Professional Couriers, indicating the need for a fresh adjudication by the original authority, allowing both parties to present their cases.

4. The judgment set aside the impugned order and remanded the matter for fresh adjudication, emphasizing the importance of considering the certificate issued by M/s. Professional Couriers. The original authority was instructed to provide an opportunity for both the appellant and M/s. Professional Couriers to present their cases and decide in accordance with the law, without expressing any opinion on the various issues involved.