2016 (4) TMI 365 - AT - Service Tax

Demand of Service tax - Cable Operator Service - Service tax not paid on amounts received from distributor - Held that - it is admitted that the appellant have filed details of amount received from M/s Chanakya Communication Network Pvt. Ltd., Rohtak alongwith the ST-3 returns filed by their Chandigarh office with challans. Due verification could have been made regarding the party s claim instead of rejecting the same as unsubstantiated without specific reason. Also there is an error in the total as submitted by the appellant. The Original Authority had not examined the records submitted by the appellant in support of their claim of discharge of service tax on the gross amount received from the distributor during the impugned period by their Chandigarh office. This can be verified from the documents already submitted by the appellant or calling for additional documents, if required to arrive at the correct conclusion. - Matter remanded back

Summary

Issues:
1. Waiver of pre-deposit of service tax amount and penalties.
2. Disputed service tax demand for Cable Operator Service.
3. Contestation of demand on various grounds.

Analysis:

Issue 1: Waiver of pre-deposit of service tax amount and penalties
The applicant sought waiver of pre-deposit of service tax amount confirmed against them, along with penalties. The Tribunal found that the appeal could be disposed of without pre-deposit as there were contested factual issues requiring verification with source documents. With the consent of both parties, the Tribunal waived the pre-deposit requirement and proceeded to take up the main appeal for disposal.

Issue 2: Disputed service tax demand for Cable Operator Service
The appellants were registered for service tax under Cable Operator Service category, with the demand covering the period from September 2004 to March 2009. The Department alleged non-payment of service tax on amounts received from a distributor agent of the appellant. The grounds of contestation included discrepancies in recalculations, accounting for service tax payments, and submission of relevant documents. The Tribunal noted that the Original Authority had not adequately examined the records submitted by the appellant to support their claim of service tax discharge. As a result, the Tribunal remanded the matter to the Original Authority for proper verification and ordered the appellant to provide all necessary documents for cross-verification before a fresh order is passed.

Issue 3: Contestation of demand on various grounds
The appellant contested the demand on several grounds, including the Original Authority's failure to consider details furnished by the appellant, totaling errors in calculations, and discrepancies in service tax payments. The Tribunal observed that the appellant had submitted relevant documents, but the Original Authority had not properly examined them. The Tribunal emphasized the need for a thorough verification of the appellant's claims and directed the matter to be remanded for a fresh order after cross-verification of documents. The appeal was allowed on remand, providing the appellant with an opportunity to represent their case before a final decision is made.

In conclusion, the Tribunal granted relief to the appellant by remanding the matter for proper verification of service tax payments and documents, highlighting the importance of thorough examination and cross-verification in tax dispute cases.