2017 (11) TMI 35 - AT - Service Tax

Quantification of tax liability - security and manpower supply service - Held that - the quantification as arrived at by the impugned order is to be based on documents maintained by the assessee/appellant and as cross verified by the Jurisdictional officer. Further, various claims made by the assessee/appellant were not discussed for a conclusion. Adjustment towards service tax already paid - Held that - the impugned order did not elaborate the basis on which such adjustment is made - In any case for both quantification of tax liability as well as adjustment towards already paid tax basic verification with the connected documents by the Jurisdictional officer is a basic requirement - Since, the issue involved is basically about factual verification and quantification, it is fit and proper to set aside the impugned order and to remand the matter to the Original Authority for a fresh decision. Appeal allowed by way of remand.

Summary

Issues:
Quantification of tax liability, penalty under Section 78, penalty under Section 76, adjustment of service tax already paid.

Quantification of Tax Liability:
The dispute in this case revolved around the service tax liability of the appellant, who provided taxable services under security and manpower supply. The Original Authority confirmed a tax liability of ?28,52,227, along with penalties under Section 78, 76, and 77 of the Finance Act, 1994. On appeal, the Commissioner (Appeals) re-determined the tax liability to ?27,08,614, upholding the penalty under Section 78 but setting aside the penalty under Section 76. The appellant contended that the quantification of tax liability was not properly done, claiming that the reduction in tax amount was not adequately explained, and their submissions were not considered. The appellant argued that their total service tax liability was ?13,64,925, of which they had already paid ?15,04,479. The Tribunal found that the order lacked supporting details for the quantification of tax liability and directed a fresh decision based on proper verification and consideration of the appellant's claims.

Penalty under Section 78:
The penalty under Section 78 of the Finance Act was a point of contention in the appeal. The Commissioner (Appeals) had upheld this penalty, which was equivalent to the confirmed tax liability. The appellant challenged this penalty, arguing that the penalty under Section 78 was unjustified. The Tribunal did not delve into the specifics of this penalty but remanded the matter for a fresh decision, emphasizing the need for proper factual verification and consideration of all relevant evidence before determining any penalties.

Penalty under Section 76:
The penalty under Section 76 of the Finance Act, imposed by the Original Authority, was set aside by the Commissioner (Appeals). The Revenue contested the dropping of this penalty, claiming that it should have been maintained. However, the Tribunal did not provide a detailed analysis of this penalty but focused on the overall lack of supporting details in the order. The Tribunal's decision to remand the case for a fresh decision encompassed a review of all penalties, including the penalty under Section 76, ensuring proper examination and consideration of the appellant's submissions.

Adjustment of Service Tax Already Paid:
The issue of adjusting the service tax already paid by the appellant was raised by both the appellant and the Revenue. The appellant argued that the adjustment made in the impugned order was not adequately explained, and the Revenue contended that the adjustment included taxes paid for periods not covered by the dispute. The Tribunal found that the basis for such adjustments was not elaborated in the order and emphasized the need for thorough verification by the Jurisdictional officer. The Tribunal concluded that proper verification and consideration of documents were essential for both quantifying tax liability and adjusting taxes already paid. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Original Authority for a fresh decision, allowing the appellant to submit all necessary evidence.

In summary, the Tribunal allowed the appeals by way of remand, highlighting the necessity for detailed verification, consideration of evidence, and proper quantification of tax liability and penalties. The decision emphasized the importance of supporting details and thorough examination by the Jurisdictional officer before reaching any conclusions regarding the appellant's tax liability and adjustments.