2016 (3) TMI 903 - AT - Service Tax

Quantification of Service tax amount - Service tax on GTA services - Appellant contended that amount of service tax ₹ 38,694/- has already been paid by transporter, consignor and supplier of building material certified by the CA, so, cannot be demanded once again - Held that - in the impugned order the Adjudicating authority has brushed aside the submission of the appellant only on the ground that no documentary evidence was produced. Once the appellant have claimed that certain amount of service tax has already been paid and C.A. also certified the same, if the Ld. Adjudicating authority is not satisfied, he could have very well asked for the additional evidence which he failed to do so. Therefore, the Adjudicating authority is directed to re-verify the submission, documents and C.A. certificate provided or to be provided by the appellant and arrive at correct liability of service tax in respect of GTA service. Demand of Service tax - Management, Maintenance or Repair services of building collected from Flat owner - Held that - the collection of such maintenance charges is under the statutory provision of MOFA, 1963. According to which it is mandatory on the part of the builder that before handing over the building to the society the builder that before handing over the building to the society the builder has to maintain the building for which the builder engaged various service providers and payment made to such service providers was taken as re-imbursement from the flat owner. In this fact, the appellant is not liable for service tax as held in the case of Kumar Beheray Rathi vs. C.Ex, Pune-3 2013 (12) TMI 269 - CESTAT MUMBAI , therefore, the service tax demand on Management, Maintenance or Repair service is clearly unsustainable. Imposition of penalty - Section 78 of the Finance Act, 1994 - Service tax on GTA service - Held that - the appellant, after knowing about non payment of service tax on GTA, promptly paid the service tax alongwith interest which is much before the issuance of show cause notice. Therefore, penalty is not imposable in terms of section 73(3) of Finance Act, 1994, according to which if the amount of service tax alongwith interest is paid then no show cause notice should have been issued. Also the appellant have made out a case of reasonable cause, accordingly they are also not liable for penalty under Section 80. Therefore, the penalty related to service tax on GTA is waived off. - Appeal disposed of

Summary

Issues:
1. Service tax demand on Transport of Goods by Roads Service and Management, Maintenance, or Repair Service.
2. Discharge of service tax on GTA service and Management, Maintenance, or Repair service charges.
3. Documentary evidence for service tax payment.
4. Statutory obligations under MOFA, 1963 for maintenance charges.
5. Imposition of penalty under Section 78.

Analysis:
1. The appeal challenged an Order-in-Original confirming service tax demands under Transport of Goods by Roads Service and Management, Maintenance, or Repair Service. The appellant contested the total demand raised in the show cause notice, arguing for a reduction based on payments made by transporters, consignors, and suppliers. The appellant also disputed the service tax on Management, Maintenance, or Repair service, citing statutory obligations under MOFA, 1963. The appellant relied on a previous judgment to support their case. The penalty under Section 78 was also contested on grounds of no intention to evade service tax.

2. The Adjudicating authority dismissed the appellant's submissions on the lack of documentary evidence. The Tribunal directed a re-verification of the submissions and documents provided by the appellant regarding service tax on GTA service. The Adjudicating authority was instructed to determine the correct liability of service tax in this regard. The Tribunal remanded this issue to the original authority for further review.

3. Regarding the service tax on Management, Maintenance, or Repair services, the Tribunal found the demand unsustainable due to statutory provisions under MOFA, 1963. The Tribunal set aside the service tax demand on this service. Additionally, the penalty under Section 78 related to GTA service was waived considering the appellant's prompt payment of service tax and interest before the show cause notice. The Tribunal also noted the appellant's reasonable cause for the penalty waiver under Section 80.

4. In conclusion, the Tribunal ordered the re-quantification of service tax and interest on GTA service by the Adjudicating authority. The demand for service tax on Management, Maintenance, or Repair service, along with related interest and penalty, was set aside. The appeal was disposed of based on the above terms, with the order pronounced in court on a specified date.