2017 (2) TMI 63 - AT - Service Tax

Misconceived SCN - There was no security service at all provided by the appellant to BSNL. But Revenue issued a show cause notice alleging such service provided by the appellant - Held that - When the show cause notice is read that gives an impression that Revenue has not at all enquired as to what was the service provided by appellant in terms of aforesaid work orders issued by BSNL. It was under mistake of facts - Had there been proper enquiry by Revenue as to the nature of the service provided by appellant, it could have resolved the dispute without issuing a misconceived SCN. Appreciating that the taxes have been paid before issue of show cause notice, there shall be no penalty - appeal allowed - decided in favor of appellant.

Summary

Issues: Delay in filing appeal due to sickness of counsel, Double taxation of services provided to BSNL, Nature of services provided by the appellant, Intervention by Tribunal, Pre-deposit requirement, Proper enquiry by Revenue, Tax payment verification, Penalty imposition, Disposal of appeal and stay application.

The judgment addresses the issue of delay in filing the appeal due to the sickness of the counsel. The consultant for the appellant explained that the delay of 324 days was solely due to the counsel's difficulties, which was supported by an affidavit. The Tribunal, after considering the reasons provided, condoned the delay and admitted the appeal, clarifying that this decision would not set a precedent due to the specific circumstances of the case.

Regarding the issue of double taxation of services provided to BSNL, the appellant argued that the demand arose due to alleged security services provided, which the appellant denied. The appellant contended that any tax paid earlier should be refundable or adjustable against the current demand. The Tribunal noted the discrepancies in the show cause notice and emphasized the need for proper verification of the services provided to avoid unjust taxation.

The judgment delves into the nature of services provided by the appellant to BSNL. It was established that the appellant offered housekeeping and general conservancy services, not security services as alleged by the Revenue. The Tribunal highlighted the importance of a thorough enquiry by the Revenue to ascertain the nature of services before issuing demands to prevent misconceptions and unjust taxation.

In terms of intervention by the Tribunal, both sides presented their arguments, with the Revenue insisting on the demand against security services. However, the Tribunal observed that the Revenue had not properly investigated the services provided by the appellant, leading to a mistaken show cause notice. The Tribunal emphasized the need for the Revenue to verify tax payments based on actual services rendered rather than relying solely on information from BSNL.

The judgment concluded by setting aside the impugned adjudication order, emphasizing that since taxes were paid before the show cause notice, no penalty should be imposed. The appeal was disposed of with directions to verify tax payments accurately and avoid unjust taxation. The stay application was also allowed in light of the appeal's disposal.