2016 (10) TMI 769 - AT - Service Tax

Recovery of service tax - levy of interest and penalties u/s 77 and 78 of FA, 1994 - security services - decision of Central Government Industrial Tribunal in the case of New Industrial Security Force 2006 2005 (9) TMI 657 - CESTAT NEW DELHI relied upon - Held that - the decision of Central Government Industrial Tribunal may be relevant and the facts mentioned therein need to be verified and examined by the original adjudicating authority. The said decision was passed after the Order-in-Original was issued and therefore, the same has not been examined by the original adjudicating authority. Matter remanded to the original adjudicating authority to decide the case afresh - appeal disposed off.

Summary

Issues:
1. Recovery of service tax on security services provided.
2. Imposition of penalties under different sections of the Finance Act.
3. Introduction of additional evidence by the appellant.
4. Contesting the issue on limitation grounds.
5. Interpretation of relevant legal provisions.
6. Verification and examination of facts by the original adjudicating authority.
7. Decision on remand to the original adjudicating authority.

Analysis:
1. The appellants, a security services provider, were issued eight show-cause notices for the recovery of service tax. The Commissioner confirmed a demand of &8377; 4,40,54,401/- along with interest and imposed penalties under Sections 77 and 78 of the Finance Act, 1994. The appeal was filed by both the revenue and the appellant, who also sought to introduce an additional decision as evidence.

2. The appellant argued that they had not collected service tax for most of the period in question and paid up when the investigation began. The period involved was from 1998 to 2008. The appellant contested the issue mainly on limitation grounds, citing confusion in the field until 2005. Reference was made to a Tribunal decision regarding the assessable value for service tax calculation and the employment status of personnel.

3. The Revenue relied on the impugned order, highlighting discrepancies in the invocation of penalty sections. The Commissioner confirmed penalties under Section 78 instead of Section 76 of the Finance Act for a specific show-cause notice.

4. The Tribunal found the decision of the Central Government Industrial Tribunal relevant and directed the original adjudicating authority to verify and examine the facts mentioned therein. The Tribunal noted that the decision was made after the original order and had not been considered by the adjudicating authority.

5. In the interest of justice, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a fresh decision. The case required a reevaluation based on the additional evidence and relevant legal provisions.

This judgment reflects a detailed analysis of the issues raised by both parties, focusing on the recovery of service tax, penalties imposed, introduction of additional evidence, contesting on limitation grounds, and the need for proper verification and examination of facts by the adjudicating authority. The decision to remand the case underscores the importance of a thorough reconsideration based on all relevant aspects and legal provisions.