2009 (6) TMI 42 - AT - Service Tax

Internet cafe service, leased circuit service, franchise service, advertisement agent service, online information and database access/retrieval service Demand of Rs. 1,86,23,877/- plus interest and penalty - Scrutiny of the ST-3 returns and the records maintained by Sify indicated that they had not discharged their tax liability in full for the period October 2005 to March 2006. After due process of law the Commissioner confirmed the impugned demand finding that the assessee had not paid tax due on the entire taxable value recorded in the ST-3 returns filed for the material period appellant contented that entire demand is based on incorrect figures furnished by the staff of the appellants in the ST-3 returns; where the taxable value was required to be furnished, erroneously, the amount inclusive of service tax had been furnished. This error had arisen on account of the introduction of a revised format of ST-3 return under Notification No. 31/2005-ST dated 20.10.2005 Matter remanded.

Summary

Issues:
1. Waiver of predeposit of dues and early hearing application.
2. Demand of service tax, interest, and penalty.
3. Incorrect figures in ST-3 returns leading to short-payment of service tax.
4. Discrepancies in figures furnished by the appellants.
5. Request for remand for reconciliation of errors.

Analysis:
1. The appellants filed an application for waiver of predeposit of dues and early hearing of the appeal. The Commissioner of Service Tax demanded a sum towards differential service tax for a specific period and imposed penalties under the Finance Act, 1994. After considering both sides, the Tribunal allowed the application for waiver and early hearing, proceeding to take up the appeal.

2. The Tribunal noted that the appellants had not fully discharged their tax liability for the period in question. The demand was based on incorrect figures in the ST-3 returns, where the taxable value was erroneously furnished inclusive of service tax due to a revised format. The appellants, being high service tax payers, highlighted the complexities of their transactions involving partial realizations against bills, necessitating accurate tracking and payment of service tax. The appellants requested a remand to reconcile errors and demonstrate no short-payment of tax.

3. The appellants provided details of tax paid on disputed services and their service tax liability. Discrepancies arose in the figures furnished at different times, attributed to difficulties in providing correct data. The Commissioner raised the demand without verifying the correct figures or undertaking necessary reconciliations. The Tribunal observed variations in figures but noted that the demand was raised without addressing all discrepancies.

4. The learned counsel for the appellants emphasized that errors in reporting led to the issue, which could be reconciled with proper verification. The appellants expressed willingness to reconcile the errors and requested setting aside the impugned order for a full-scale reconciliation. The learned Joint Commissioner of Central Excise and Customs agreed with the appellants' submissions, indicating no objection to remanding the matter.

5. After careful consideration of the case records and submissions, the Tribunal concluded that justice required setting aside the impugned order and remanding the matter for fresh adjudication. The Tribunal allowed the appeal by way of remand, providing the appellants with an opportunity to present their case adequately and reconcile the errors for a fair resolution.