2014 (6) TMI 68 - AT - Service Tax

Non deposit of service tax - Tax collected from customers - Held that - In the show-cause notice dated 24.07.2005 the only allegation against the respondent is that the respondent has paid the service tax with a delay. Therefore, demand of interest and a penalty was also proposed for the period from April 2002 to October 2003. In the show-cause notice date d03.10.2007 also the demand is for the same period from April 2002 to October 2003, and the allegation is that the respondent has not paid the service tax in time. On perusal of the annexure to the show-cause notice, it appears that there is no short payment made by the respondent. In these circumstances, as there is no short payment of service tax, the show-cause notice dated 03.07.2007 was not required to be issued as for the same period, proceedings against the respondent has already been commenced through a show-cause notice dated 24.07.2005, In these circumstances, I do not find any infirmity with the impugned order and the same is upheld - Decided against Revenue.

Summary

Issues: Appeal against the impugned order setting aside demand due to a show-cause notice being void and illegal.

Analysis:
The case involved an appeal by the Revenue against an order where the demand was set aside by the Commissioner (Appeals) on the grounds that a show-cause notice dated 03.10.2007 was void and illegal. The facts of the case revolved around two show-cause notices issued to the respondent for the period from April 2002 to October 2003. The first notice, dated 24.07.2005, alleged that the respondent collected service tax but did not deposit it on time, leading to a demand for interest and penalty. The second notice, dated 03.10.2007, sought service tax, interest, and penalty for the same period. The Commissioner (Appeals) held that since the first notice covered the delay in payment, interest, and penalty, issuing a second notice for the same period and demand was unsustainable. The Revenue contended that the two notices were for different courses of action, but upon review, the tribunal found that both notices related to the same issue of delayed payment without any short payment of service tax by the respondent. Consequently, the tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal.

In the tribunal's analysis, it was observed that the first show-cause notice focused on the delayed payment of service tax by the respondent, leading to the proposal of interest and penalty for the specified period. Subsequently, the second show-cause notice also targeted the same period, alleging non-payment of service tax on time. However, upon examination of the records, it was evident that there was no indication of any short payment by the respondent. The tribunal concluded that since the proceedings against the respondent had already commenced through the initial notice, there was no necessity for the issuance of the second notice. Therefore, the tribunal found no fault with the decision of the Commissioner (Appeals) and upheld the order, ultimately dismissing the Revenue's appeal.