2013 (9) TMI 427 - AT - Service Tax

Non payment of service tax on Provision of expenses as Balance Sheet of 31.3.2008 - Clearing and Forwarding Agent or Business Auxiliary Services - service tax on GTA service - Held that - The contention of the counsel for the applicant is that the difference between the amount shown in the Trial Balance and ledger account is the unpaid liability towards the GTA Service. But, it is not supported by any evidence. The reconciliation statements annexed to the Chartered Accountant s certificate on various issues are unexplained. It is pertinent to note that the applicant did not produce any evidence to establish that said amount of tax was paid at any point of time from the date of audit till date. Waiver of Pre-deposit - Assesse had failed to make out a prima facie case for waiver of pre-deposit of the entire amount of tax and penalty - assesse was directed to deposit a sum of Rs.1.5 crores stay granted partly.

Summary

Issues: Alleged non-payment of service tax on Clearing and Forwarding Agent service to a company and alleged non-payment of service tax on GTA Service.

The judgment pertains to an applicant engaged in manufacturing excisable goods, accused of not paying service tax to a company for Clearing and Forwarding Agent service and GTA Service during specific periods. The Commissioner confirmed a tax demand of Rs.3,83,48,264/- along with interest and penalty. The applicant's counsel argued that the tax demand on GTA Service was based on the Trial Balance and referred to Accounting Standard (AS-29) to explain the provision for unpaid liability. The counsel also highlighted discrepancies in granting exemption notifications.

Regarding the demand for Clearing and Forwarding Agent service tax, the counsel pointed out clauses in the agreement indicating that the applicant did not provide the service as per the agreement terms. The Revenue's representative supported the Commissioner's findings, emphasizing lack of evidence from the applicant to substantiate their claims, especially related to the ledger accounts and unpaid amounts. The representative also cited legal precedents to support the demand for tax on Clearing and Forwarding Agent service.

The Tribunal, after reviewing the arguments and records, found merit in the Revenue's contentions regarding the tax demand on GTA Service. The applicant failed to provide evidence of payment or substantiate the claimed deductions adequately. However, concerning the tax demand for Clearing and Forwarding Agent service, the Tribunal noted that post a certain date, the applicant had paid tax under a different category, which was not disputed. The Tribunal directed the applicant to deposit a specified amount within a set timeframe, while waiving the remaining dues pending appeal. Compliance was to be reported by a specified date.

In conclusion, the Tribunal upheld the tax demand for GTA Service due to lack of evidence from the applicant but deferred a decision on the demand for Clearing and Forwarding Agent service pending further examination. The applicant was directed to make a partial deposit to proceed with the appeal process effectively.