2017 (9) TMI 794 - AT - Service Tax

Demand of interest - delayed payment of service tax - Security Service - Business Auxiliary Service - CBE&C Circular dated 20/05/2003 - Held that - The said issue has not been decided by both the authorities below and refrain to discuss the merits by giving one reason or the other reason, therefore, the impugned order is set aside and the matter is remanded back again to the Adjudicating Authority to re-examine the issue in the light of remand order dated 31st January 2012 - appeal allowed by way of remand.

Summary

Issues:
1. Demand of interest confirmed in impugned order.
2. Service tax demanded for services provided to a 100% EOU.
3. Correct quantification of interest and verification of tax deposit under wrong head.
4. Lack of documentary evidence for interest claim.
5. Failure to consider the issue of limitation.

Analysis:
1. The appellant appealed against an order confirming interest demand and service tax liability for Security Service and Business Auxiliary Service provided during October 2005 to February 2007. Interest demand of ?3,04,340 was raised due to delayed payment. Additionally, the appellant provided services to a 100% EOU without paying service tax, leading to a demand for service tax for the period 2005-2006 to 2008-2009. The Adjudicating Authority confirmed the demands, which were challenged before the Commissioner (Appeals) who remanded the matter for correct quantification of interest and re-examination of tax deposit issues.

2. The appellant argued that they provided full interest details for the disputed period and had discharged the service tax liability related to services provided to the EOU. The Adjudicating Authority found the appellant liable for tax on other services not part of the notice, which the Commissioner (Appeals) upheld without considering the issue of limitation. The appellant contended that the order should be set aside due to these reasons.

3. The Commissioner (Appeals) remanded the matter to decide issues related to interest liability and tax deposit verification, which were not addressed by the lower authorities. Consequently, the impugned order was set aside, and the matter was remanded to the Adjudicating Authority for re-examination in line with the remand order. The Adjudicating Authority was directed to specify required documents for adjudication, and the issue of limitation was to be considered at the end of the process.

4. The judgment concluded by remanding the matter for denovo adjudication by the Adjudicating Authority as per the directions provided, ensuring compliance with the remand order and consideration of the show cause notice allegations. The issue of limitation was to be kept open for later consideration, and the appeal was disposed of accordingly.