2014 (3) TMI 818 - AT - Service Tax

Non-payment of service tax - difference in the gross taxable value as declared in their ST-3 Returns and the amount reflected in their Debtors ledger - Held that - Appellant was given sufficient opportunities of hearing between 18th May, 2011 and 2nd September, 2011. The Appellant sought adjournments on one pretext or the other. We find from the observation of the ld. Commissioner that even though the Appellant had given re-conciliation statement, they have not adduced proper evidences explaining the discrepancies as claimed by them. Thus, there has been no proper adjudication of the case due to non-participation of the Appellant. However, from the submissions of the ld.C.A. for the Appellant, we find force in his arguments that they could furnish relevant documents in support of their claim that the differential value between ST-3 Returns and Debtors ledger, were on account of receipts attributable to non-taxable activity and or adjustments. In these circumstances, we are of the opinion that it is an appropriate case for remand to the adjudicating authority for re-appreciation of the facts and evidences on record. - Decided in favour of assessee.

Summary

Issues:
Application for waiver of predeposit of service tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
The appellant, a management consultant service provider, sought waiver of predeposit of service tax and penalty. The appellant claimed that the Department alleged non-payment of service tax based on discrepancies between the taxable value in ST-3 Returns and Debtor's ledger. The appellant argued that they submitted a reconciliation statement to the adjudicating authority, which was not considered, resulting in an ex-parte order confirming the demand. The appellant offered to deposit 10% of the service tax amount and requested a remand for a full consideration of evidence. The Department contended that the appellant failed to appear despite opportunities and could not provide relevant documents to explain the discrepancies. The Tribunal noted that the appellant sought adjournments during previous hearings and did not provide proper evidence to support their claims. However, the Tribunal found merit in the appellant's argument that the differences were due to non-taxable activities or adjustments. Consequently, the Tribunal decided to remand the case to the adjudicating authority for a fresh decision after the appellant deposits 10% of the service tax within four weeks. The Tribunal directed the Commissioner to adjudicate the issue promptly, with both parties given the opportunity to present evidence.

The Tribunal emphasized the need for timely adjudication and directed the appellant to cooperate without unnecessary adjournments. The entire adjudication process was mandated to be completed within three months from the date of the directed deposit. Ultimately, the Tribunal set aside the impugned order and allowed the appeal by way of remand, disposing of the stay petition. The decision aimed to ensure a fair consideration of evidence and a prompt resolution of the dispute, balancing the interests of both the appellant and the Revenue.