2013 (8) TMI 337 - AT - Service Tax

Consultancy services research and development project Service tax demanded - Held that - In the interest of justice earlier order was set aside and remand the matter for fresh consideration after granting reasonable opportunity to the appellants - order of the commissioner does not deal with the various issues raised - correspondences exchanged between the department and the appellants which are sought to be relied upon have not been considered by the commissioner - stay granted - petition allowed in the favour of the assessee.

Summary

Issues:
1. Dispensing with the condition of pre-deposit of service tax and penalty.
2. Applicability of service tax on grant-in-aid received from government sources.
3. Commissioner's failure to consider evidence and correspondence.
4. Distinction between earlier Tribunal decisions.
5. Unconditional stay petition.

Issue 1: Dispensing with the condition of pre-deposit:
The appellants sought to dispense with the pre-deposit of service tax and penalty. The Tribunal noted that the matter had been adjudicated previously, remanded by the Tribunal, and the Commissioner's order did not address all raised issues. Considering the submissions and evidence, the Tribunal set aside the Commissioner's order and remanded the matter for fresh consideration, granting the appellants an opportunity to present evidence within 45 days.

Issue 2: Applicability of service tax on grant-in-aid:
The appellant argued that the service tax demand was based on grant-in-aid from government sources, not on a client-service provider relationship. They contended that the work done for government departments should not be considered a taxable service. The Tribunal acknowledged the submissions and the relevance of additional evidence, which the Commissioner had not considered. The Tribunal found discrepancies in the Commissioner's order and remanded the case for re-evaluation.

Issue 3: Commissioner's failure to consider evidence:
The Tribunal observed that the Commissioner did not address various issues raised or consider the correspondence between the department and the appellants. The Tribunal found that the Commissioner had not taken into account the decision of the Tribunal and the correspondence crucial to the case. Consequently, the Tribunal set aside the Commissioner's order for fresh consideration.

Issue 4: Distinction between earlier Tribunal decisions:
The Commissioner differentiated the present case from an earlier Tribunal decision regarding the applicability of service tax. The Tribunal noted that the Commissioner did not adequately explain the differences between the two cases as required by the remand order. As the Commissioner failed to follow the remand order's directives, the Tribunal granted an unconditional stay petition in favor of the appellant.

This judgment highlights the importance of addressing all issues raised, considering relevant evidence, and following remand orders diligently. The Tribunal emphasized the need for thorough evaluation and clear distinctions between cases to ensure fair adjudication.