2015 (10) TMI 2229 - AT - Service Tax

Liability of Service Tax Security Agency Service SCN issued to both companies proposing demand of tax short paid by them Penalty under Section 76 and 77 also imposed Appellant contends that certain amount of Service Tax has been paid before issue of SCN and demand made was hit by limitation Revenue appealed to drop demand of Service Tax in respect of services provided to SEZ units, extending of the cum-duty benefit to the appellants, and less demand due to wrong computation Held That - Certain details such as calculation errors, Applicable rate of duty, etc needs to be examined Matter remanded back to Adjudicating Authority for examination without expressing any views.

Summary

Issues Involved:
1. Confirmation of Service Tax liability on two companies.
2. Appropriation of already paid Service Tax against the liability.
3. Demands for interest and penalties under various sections.
4. Appeal by Revenue regarding dropping of demand for services to SEZ units and computation errors.
5. Dispute over remaining amount, limitation, and calculation errors.
6. Applicability of duty rate and inclusion of amounts in the value of services.

Analysis:

Confirmation of Service Tax Liability: The case involved two companies providing security agency services, facing Service Tax demands of Rs. 8.72 Crores and Rs. 1.98 Crores, respectively. The adjudicating authority confirmed these liabilities and appropriated the amounts already paid against them. Interest, penalties under Sections 75, 76, and 77 of the Act were also imposed.

Appeal by Revenue: The Revenue filed an appeal challenging the dropping of demand for services to SEZ units, disputing cum-duty benefit, and pointing out computation errors in quantifying the Service Tax liability. The Revenue argued that extended period invocation was justified due to incomplete ST-3 returns and undisclosed service income.

Dispute over Remaining Amount and Limitation: The appellants contested the remaining amounts, citing reasons such as inclusion of retention amount and penalty in the value of services. They argued against the duty demand citing limitation issues. They highlighted that the Department was aware of their operations, having audited them previously without raising objections.

Remand Order: The Tribunal found that about 90% of the demanded duty was paid before the Show Cause Notice issuance, leaving the dispute over the remaining amount and limitation. Calculation errors, applicable duty rate, and amounts not included in the value of services were also raised. The matter was remanded back to the Adjudicating Authority for a detailed examination, including penalty considerations, with a directive to provide a fair hearing to the appellants.

Conclusion: The impugned order was set aside, and all appeals by both the Appellants and Revenue were allowed by way of remand. The Tribunal emphasized the need for a thorough review of the issues, keeping them open for further examination. Cooperation between the appellants and the Department was encouraged for an early resolution of the matter.