2014 (5) TMI 140 - AT - Service Tax

Waiver of pre-deposit - non-payment of service tax - Freight expenses - reverse charge mechanism - Held that - applicant has produced a chartered accountant certificate dated - 12th November, 2013 before this Tribunal explaining the entire facts. However, the said certificate was not before the Ld. Commr. (Appeal). In view of this, I am of the opinion that the matter may be remitted back to the Ld. Commr. (Appeal) for fresh decision without insisting for any pre-deposit and therefore, the case is remitted back to the Ld. Commr. (Appeals) for fresh decision into the matter after hearing both the sides. The Ld. Commr. (Appeal) after considering the evidences produced by both the parties should decide the issue afresh. - Decided in favour of assessee.

Summary

Issues involved: Application for waiver of pre-deposit of service tax, interest, and penalty imposed on the applicant for non-payment of service tax on GTA under the reverse charge mechanism for the period 2008-2009.

Analysis:
1. The applicant sought a waiver of pre-deposit of Rs.2,57,930, interest, and penalty imposed due to non-payment of service tax on GTA under the reverse charge mechanism for the period 2008-2009. The Chartered Accountant representing the applicant argued that the dispute arose from the Department charging the demand shown in the trial balance towards payment made under the heading 'freight'. The contention was that the amount in the trial balance only reflected a provision made and was not actually paid towards freight during the relevant period. The Chartered Accountant provided evidence, including a certificate from the statutory auditor, to support the claim that the tax on 'freight' expenses was paid during subsequent months, not in the period in question.

2. The Revenue's representative contended that the explanation provided by the applicant was unsatisfactory, as per the findings of the Commissioner (Appeals). The Tribunal, after hearing both sides, found that the appeal could be disposed of finally at that stage. The issue in dispute was the non-payment of service tax on 'freight' expenses for the period 2008-2009 under the reverse charge mechanism. The applicant argued that the discrepancy between the amount reflected in the Service Tax Return and the balance sheet was due to the payment being made in subsequent periods, which was not reconciled by the Commissioner (Appeals). The Tribunal noted that a certificate from a Chartered Accountant, explaining the facts, was presented before them but not before the Commissioner (Appeals). Consequently, the matter was remitted back to the Commissioner (Appeals) for a fresh decision, without requiring any pre-deposit, to consider the evidence from both parties and make a new determination after a hearing.

3. In conclusion, the Tribunal allowed the appeal by way of remand, directing the Commissioner (Appeals) to reconsider the issue after reviewing the evidence from both parties and providing an opportunity for a hearing. The stay petition was disposed of accordingly.