2018 (8) TMI 1979 - AT - Service Tax

Demand of Service Tax - difference between value as per the Profit Loss A/c. and the value as declared in ST-3 Returns in respect of claim of payment of outward freight, loading/unloading, rail freight, clearing and forwarding and the amount paid by the Transporters - period 2009-2010 and 2010-2011 - HELD THAT - Even though the liability to pay service tax as per Rule 2(1)(d)(v) of the Service Tax Rules and Notification No. 36/2004-ST has been shifted on the category of persons who have received the services and are liable to pay under the Reverse Charge Mechanism but the Tribunal has consistently held that once the assessee has paid the service tax to the service provider he cannot be made liable to pay service tax all over again. It is deemed appropriate to remand the matter to the Adjudicating Authority to verify the claim as made by the appellant in their grounds of appeal and pass order in accordance with law - appeal allowed by way of remand.

Issues involved:
1. Demand of service tax based on discrepancy in value declared in ST-3 Returns.
2. Imposition of penalties under Sections 77 and 78 of the Finance Act, 1994.
3. Reconciliation of expenditure for the years 2009-2010 and 2010-2011.
4. Refund under Reverse Charge Mechanism.
5. Exemption of service tax on certain charges.
6. Liability of service tax on transportation of goods by own vehicles.
7. Liability of service tax on import cargo.

Analysis:

Issue 1: Demand of service tax based on discrepancy in value declared in ST-3 Returns
The Adjudicating Authority confirmed the demand of service tax along with penalties. The Commissioner (Appeals) upheld the decision. The appellant argued that a detailed summary of expenditure reconciles the differential service tax amount to be miniscule. The Tribunal observed discrepancies in the value of expenditure declared in the Profit & Loss A/c. and ST-3 Returns. However, it remanded the matter to the Adjudicating Authority for further verification.

Issue 2: Imposition of penalties under Sections 77 and 78
The Adjudicating Authority imposed penalties under Sections 77 and 78 of the Finance Act, 1994. The Commissioner (Appeals) upheld the penalties. The appellant's argument regarding the reconciliation of expenditure also applied to the penalties. The Tribunal did not address the penalties specifically in its remand order.

Issue 3: Reconciliation of expenditure for the years 2009-2010 and 2010-2011
The appellant provided detailed reconciliation statements for the years 2009-2010 and 2010-2011. The statements highlighted discrepancies in freight charges, loading/unloading charges, and other expenses. The appellant argued that certain charges had service tax already paid by the service providers, exempting them from further liability.

Issue 4: Refund under Reverse Charge Mechanism
The appellant claimed a refund under the Reverse Charge Mechanism for a specific amount. The Tribunal did not provide a final decision on the refund but remanded the case for further verification.

Issue 5: Exemption of service tax on certain charges
The appellant argued for exemptions from service tax on specific charges like loading/unloading, clearing and forwarding charges, and railway freight. The Tribunal acknowledged the exemptions and directed the Adjudicating Authority to verify the claims during the remand process.

Issue 6: Liability of service tax on transportation of goods by own vehicles
The appellant contended that transportation of goods by their own vehicles does not attract service tax liability as no service is received or provided. The Tribunal did not provide a conclusive decision on this issue but directed cooperation in further proceedings.

Issue 7: Liability of service tax on import cargo
The appellant argued against the liability of service tax on import cargo, stating that the tax had already been collected by the clearing and forwarding agency. The Tribunal acknowledged this argument and directed verification during the remand process.

In conclusion, the Tribunal remanded the case to the Adjudicating Authority for further verification and ordered cooperation from the appellant in the denovo proceedings. The detailed reconciliation statements provided by the appellant will be crucial in determining the final outcome of the case.

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