2015 (12) TMI 11 - AT - Service Tax

Demand of service tax - Commission received on sale of recharge coupons - Held that - Service tax liability arises on the recharge coupons on the commission received on the sale of recharge coupons by BSNL on merits we find that the assessee has no case and the impugned order to that extent needs to be set aside and we do so. The impugned order to that extent is set aside. The respondent-assessee is liable to pay the service tax liability along with interest. Issue of discharge of service tax liability on the sale of recharge coupons purchased from the telephone service provider was a highly contested issue and was before the higher judicial forum during the relevant period. We are of the view that the respondent could have entertained a bonafide belief as to that they are not laible to discharge service tax liability. - assessee has discharged the entire service tax liability of ₹ 18,98,953/- was reimbursed by BSNL and the same has been appropriated by adjudicating authority. Since the service tax liability stands discharged by the respondent-assessee, we find that this is a fit case for invoking the provisions of section 80 of the Finance Act 1994 and find first appellate authority was correct to that extent. In our view the impugned order does not require any interference in setting aside of penalties. - Decided partly in favour of assessee.

Summary

Issues involved: Service tax liability on commission for sale of recharge coupons of BSNL, Penalty imposition under Sections 76, 77, and 78 of the Finance Act, 1994, Discharge of service tax liability by respondent, Applicability of Section 80 of the Finance Act, 1994, Interest liability on the service tax amount.

Service tax liability on commission for sale of recharge coupons of BSNL:
The appeal was filed by Revenue against the Order-in-Appeal regarding the service tax liability on the commission received for the sale of recharge coupons of BSNL by the respondent. The Bench referred to a previous case where it was held that service tax liability arises on the commission received for the sale of recharge coupons by BSNL. The impugned order was set aside, and the respondent was held liable to pay the service tax along with interest.

Penalty imposition under Sections 76, 77, and 78 of the Finance Act, 1994:
The Revenue claimed that the respondent should be penalized under the specified provisions. However, the Bench noted that during the relevant period, the issue of discharging service tax liability on the sale of recharge coupons was highly contested. It was observed that the respondent might have had a genuine belief that they were not liable to pay the service tax. The Bench found that since the respondent had already discharged the service tax liability, invoking Section 80 of the Finance Act, 1994 was appropriate, and the penalties imposed did not require interference.

Discharge of service tax liability by respondent and applicability of Section 80 of the Finance Act, 1994:
The respondent had discharged the entire service tax liability, which was reimbursed by BSNL and appropriated by the adjudicating authority. The Bench held that this situation warranted the application of Section 80 of the Finance Act, 1994. It was concluded that the penalties imposed did not need to be set aside, as the service tax liability had been duly discharged by the respondent.

Interest liability on the service tax amount:
The Bench directed the appellant to discharge the interest liability on the service tax amount within one month of receiving the certified copy of the order. The appeal was disposed of based on the findings and decisions made regarding the service tax liability, penalties, and interest obligations.