2012 (10) TMI 449 - AT - Service Tax

Credit of service tax on the services provided by a security agency - Held that - Proposal to give an opportunity to the appellant to submit a detailed worksheet to the adjudicating authority so that he can submit a verification report to prove or disprove the claim of the appellant that they have fully discharged taxes payable. This report will be taken into account at the time of final disposal of this appeal before the Tribunal. Interest on delayed payment - Held that - The appellants produced on record a compilation record including the document which are required to be verified at the original adjudicating authority level. The appeal is being remanded, the issue of payment of interest would also be re-decided by the adjudicating authority.

Summary

Issues:
1. Credit of service tax on services provided by a security agency.
2. Service tax on unrealized invoice value.
3. Interest on delayed payment of service tax.

Analysis:

Issue 1: Credit of service tax on services provided by a security agency
The appellant claimed credit for service tax on services provided by a security agency based on the assumption that the service provider had paid the tax. However, the invoices did not clearly indicate the actual payment of service tax. The learned DR argued that without evidence of payment, credit cannot be allowed. The tribunal agreed with the DR, stating that a mere statement in the contract or invoice is not sufficient proof of tax deposit. Therefore, credit was denied in this regard.

Issue 2: Service tax on unrealized invoice value
The appellant had not provided a detailed worksheet showing the actual liability based on realization during adjudication. The tribunal decided to give the appellant an opportunity to submit a detailed worksheet to the adjudicating authority for verification. The verification report would be considered during the final disposal of the appeal. The appellant was given a chance to prove that they had fully discharged the taxes payable.

Issue 3: Interest on delayed payment of service tax
The tribunal directed the appellant to pay the required interest amount within a specified timeframe. Upon compliance with the payment, the balance of the demand was waived, and a stay was granted until the appeal's disposal. The adjudicating authority was instructed to submit a report within 30 days of receiving the worksheet from the appellant. The appeal was remanded for re-decision on the interest payment issue along with a re-examination of the documents by the lower authorities.

In conclusion, the appeal was disposed of by way of remand, with various directions given for further proceedings and verification of the relevant documents and payments.