2015 (11) TMI 528 - AT - Service Tax

Repair and maintenance services - Penalty u/s 76, 77 & 78 - Bonafide belief of non payment of service - evasion of service tax - Held that - Commissioner (Appeals) in his order categorically held that the entire value of service tax is liable for service tax however service tax can be recovered only on the amount which was received till date of passing of this order. He also held that amount of service tax which not received till that date no service tax is paid. He also held that the amount which was not received and as and when the same is received it will be liable for service tax and at the same time Ld. Commissioner directed superintendent to verify correctness of the service tax and also directed to recover balance of service tax interest if found short paid. In view of the above order of the Ld. Commissioner (Appeals), I do not find any infirmity in the order and there cannot be any grievances of the Revenue because entire service tax leviable has been ordered to be recovered subject to receipt of service charges. Therefore I am of the view that impugned order is proper and legal and does not require any interference and hence the same is upheld - Decided in favour of assessee.

Summary

Issues:
1. Confirmation of demand of Service tax under the category of Management or Business Consultancy Services.
2. Quantification of actual service tax liability by the Commissioner (Appeals).
3. Confirmation of interest without determining the service tax demand amount.
4. Challenge by the Revenue regarding the legality and correctness of the impugned order.

Analysis:
1. The appeal was against the Order-in-Appeal confirming the demand of Service tax under Management or Business Consultancy Services for a specific amount provided during 2005-06 to 2007-08. The Commissioner upheld the demand for the entire received amount, exempting the unpaid sum until the date of the order. The Commissioner directed that service tax would become payable upon receipt of the outstanding amount. Interest under Section 75 was confirmed, but the penalty under Section 78 was set aside due to the appellant's consistent payment of Service tax since 2005-06.

2. The Revenue challenged the order on the grounds that the Commissioner failed to quantify the exact service tax liability despite having the authority to do so under section 85(4) of the Finance Act, 1994. The Revenue contended that the order was inadequate and legally incorrect as the Commissioner did not determine the precise service tax liability, leading to an abstract confirmation of interest. The Revenue argued that the order should have specified the service tax liability along with interest, making the order-in-appeal legally flawed.

3. The Revenue's representative argued that the Commissioner's failure to quantify the actual service tax amount rendered the order improper and legally questionable. The Commissioner was criticized for not exercising the power under section 85(4) to determine the accurate service tax liability, leading to the infirmity in the order. However, the Tribunal found no fault with the Commissioner's order, which clearly outlined the liability for service tax on the received amounts and directed the verification and recovery of any outstanding balance.

4. The Tribunal dismissed the Revenue's appeal, upholding the Commissioner's order as proper and legal. The Tribunal found no infirmity in the order, as it comprehensively addressed the service tax liability based on the amounts received by the appellant. The Tribunal emphasized that the entire service tax leviable had been ordered for recovery upon receipt of service charges. Therefore, the Tribunal concluded that the impugned order did not require any interference and upheld the decision, dismissing the Revenue's appeal.