2018 (2) TMI 1038 - AT - Service Tax

Business Auxiliary Service - short payment of service tax - tax liability on the Overriding Commission received for cargo bookings undertaken by them for Airlines not discharged - Held that - the adjudicating authority has not recorded any reasoning for coming to a conclusion as to why he has held that the respondents herein had not undertaken any activity of cargo handing during the period in question and that they did not receive any Overriding commission. The adjudicating authority should be given an opportunity to come to a conclusion afresh on this point - appeal allowed by way of remand.

Summary

Issues:
Demand of short payment of Service Tax under Business Auxiliary Service category - Allegation of short payment of tax liability on Overriding Commission for cargo bookings - Adjudicating authority's reasoning and findings - Remand of the matter to the adjudicating authority for fresh conclusion.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI was filed by the Revenue against Order-in-Original No. 30/ST/HB/12-13 dated 04.03.2013. The show-cause notice alleged a demand for short payment of Service Tax under the Business Auxiliary Service category, specifically under Section 65(105)(zzb) of the Finance Act, 1994. The Revenue claimed that the respondents had not discharged the tax liability on the Overriding Commission received for cargo bookings, which should have been classified under Business Auxiliary Service. The respondents contended they had correctly paid tax on commission amounts and had not received any Overriding commission during the relevant period. The adjudicating authority's reasoning lacked a proper conclusion on whether the respondents had engaged in cargo handling activities or received any Overriding commission. The Tribunal found discrepancies and directed a fresh conclusion by the adjudicating authority after following natural justice principles and addressing the question of limitation. The impugned order was set aside, and the matter was remanded for further consideration.

The Tribunal observed that the adjudicating authority failed to provide a reasoned conclusion on whether the respondents had undertaken cargo handling activities or received Overriding commission. The responsible person's statements and correspondences indicated a different scenario, prompting the Tribunal to remand the matter for a fresh determination. The learned Counsel's plea to keep the issue of taxability of overriding commission open, along with the question of limitation, was deemed fair. The adjudicating authority was directed to reconsider the matter afresh, ensuring adherence to natural justice principles and proper findings on limitation. The appeal was disposed of by remanding the case to the adjudicating authority for a fresh decision, emphasizing the need for a just and reasoned outcome.

In conclusion, the Appellate Tribunal CESTAT MUMBAI addressed the issues concerning the demand for short payment of Service Tax under the Business Auxiliary Service category, specifically related to the alleged short payment of tax liability on Overriding Commission for cargo bookings. The Tribunal found discrepancies in the adjudicating authority's reasoning and directed a fresh determination after considering all aspects and following natural justice principles. The remand was aimed at ensuring a fair and just conclusion based on a thorough examination of the facts and legal provisions.