2014 (6) TMI 312 - AT - Service Tax

CENVAT Credit - Management Consultancy Service, Maintenance and Repair Service and Renting of Immovable Property Service - Held that - There is a need for fresh appreciation of Balance Sheet, Profit & Loss Account and documents and evidence which the appellants have produced to consider whether the tax liability arises prior to 1.6.2007 and whether reimbursable expenses can be considered as expenditure category, etc. Each and every submission made by the appellant is required to be dealt with and we find that both the lower authorities failed to do so. Since we find that the appellant s claim that substantial income from Renting of Immovable Property was not leviable to tax and further expenses like electricity charges, water charges, insurance and property tax of the building, etc. incurred should not suffer service tax, in our opinion, an amount of more than Rs. 10 lakhs deposited by the appellant is sufficient for the purpose of pre-deposit and since we feel that in view of the above observations, the matter should be remanded to the original adjudicating authority so that the evidence and documents produced by the appellants are appreciated properly and conclusion is arrived at. Accordingly, the impugned order is set aside and the matter is remanded to the original adjudicating authority, keeping all the issues open, with a request to ensure that all the submissions, documents and evidences made by the appellant are considered and dealt with and conclusion is arrived at in accordance with law. Needless to say that the appellant shall be given reasonable opportunity to present their case, documents and evidence. - Decided in favour of assessee.

Issues:
1. Service tax liability on 'Management Consultancy Service', 'Maintenance and Repair Service', and 'Renting of Immovable Property Service' for the period April 2005 to September 2009.
2. Irregular availing of Cenvat credit of Rs. 13,29,844.
3. Discrepancy between income shown in the Balance Sheet, Profit & Loss Account, and ST-3 return.

Issue 1: Service tax liability on various services
The judgment addresses the service tax liability related to 'Management Consultancy Service', 'Maintenance and Repair Service', and 'Renting of Immovable Property Service' for the period April 2005 to September 2009. The lower authorities confirmed a demand for service tax and penalties based on the assumption that there was a difference in income figures between financial documents. The appellant argued that the demand was unjust as it relied on assumptions and presumptions. The appellant also contended that 'Renting of Immovable Property Service' was not taxable before a specific date, a claim overlooked by the authorities. The tribunal noted that the lower authorities did not adequately consider the evidence and documents provided by the appellant, leading to a lack of proper assessment. The tribunal remanded the matter to the original adjudicating authority for a fresh review of the evidence and documents to determine the tax liability accurately and consider reimbursable expenses as legitimate deductions.

Issue 2: Irregular availing of Cenvat credit
The judgment highlighted the irregular availing of Cenvat credit amounting to Rs. 13,29,844. The appellant's failure to produce sufficient evidence regarding the Cenvat credit was noted. The tribunal emphasized the need for a thorough examination of the evidence to ensure proper consideration of the appellant's submissions. The matter was remanded for a reevaluation to determine the legitimacy of the Cenvat credit availed.

Issue 3: Discrepancy in income figures
The discrepancy between the income figures shown in the Balance Sheet, Profit & Loss Account, and ST-3 return was a crucial aspect of the case. The appellant argued that the demand was based on flawed assumptions and that the authorities did not consider essential aspects such as the non-taxability of 'Renting of Immovable Property Service' before a specific date. The tribunal emphasized the importance of a detailed review of all submissions, documents, and evidence provided by the appellant to arrive at a conclusion in accordance with the law. The appellant was granted a reasonable opportunity to present their case effectively during the reevaluation process.

In conclusion, the judgment focused on the need for a comprehensive reassessment of the tax liability, Cenvat credit availed, and discrepancies in income figures. The tribunal stressed the importance of considering all evidence and submissions to ensure a fair and accurate determination of the appellant's obligations.

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