2008 (12) TMI 87 - AT - Service Tax

Short payment of tax - reconciliation of Cash Account Current & Sub Ledger Revenue shows that service tax received from customers is varying from service tax paid - appellant submitted that there is no mala fide - non-payment or short payment of tax was only due to method of accounting and computation of service tax adopted by them - M/s. BSNL, being a PSU, can tt be attributed with, any mala fide intention to evade payment of duty demand is held time-barred, without going into merits of case

Summary

Issues: Limitation period for service tax payment, reconciliation of CAC and SLR, mala fide intention, method of accounting

In this case before the Appellate Tribunal CESTAT, Ahmedabad, the appellant, a provider of Telephone Services, was paying service tax based on a specific accounting system involving Cash Account Current (CAC) and Sub Ledger Revenue (SLR) statements. The issue arose when show-cause notices were issued alleging short payment of service tax during specific periods. The appellant's contention was that the difference in service tax paid and received was due to their accounting and computation method, not mala fide intentions. The Original Adjudicating Authority and Commissioner (Appeals) upheld the demand for payment, including interest and penalty.

The main issue raised by the appellant was the limitation period for the service tax payment. The notices were issued beyond the normal limitation period, with one notice issued after five years. The Tribunal acknowledged that being a PSU of the Government of India, the appellant could not be attributed with mala fide intentions to evade payment of duty. Therefore, the Tribunal set aside the impugned order, ruling that the demand was barred by limitation and allowed the appeal without delving into the merits of the case.

The Tribunal's decision focused on the procedural aspect of the case, emphasizing that the demand for payment of service tax was beyond the statutory limitation period. The Tribunal accepted the appellant's argument that the discrepancies in service tax payment were due to their accounting method, not intentional evasion. By considering the limitation period and the absence of mala fide intentions, the Tribunal provided consequential relief to the appellant without examining the substantive issues of the case, ultimately ruling in favor of the appellant based on the limitation aspect.