2018 (4) TMI 843 - AT - Service Tax

Works contract service - Revenue held the view that appellant has failed to pay Service Tax properly during the period under consideration - case of appellants is that they have already discharged the Service Tax liability on the basis of the actual receipts but the same has not been taken into account by the adjudicating authority - Held that - the Service Tax demands in the impugned order have been worked on the basis of the bills raised by the appellant - The tax was payable upto 31.03.2011 on the basis of the actual receipts and not on the basis of the bills raised by the appellant. To this extent, the entire demand confirmed needs to be re-cast - the matter is required to be remanded back to the original adjudicating authority for considering the submissions made by the appellant - appeal allowed by way of remand.

Summary

Issues:
Service Tax demand calculation based on billing instead of actual receipts, applicability of Service Tax on specific construction projects, failure to consider evidence of Service Tax already discharged.

Analysis:
The appellant, registered with the Service Tax Department, appealed against Order - in - Original No.53/2012 - 13, challenging the Service Tax demand of ?6,23,19,851/- and penalty under Sections 73 and 78 of the Finance Act, 1994. The appellant provided works contract service among others during the period from 01.04.2010 to 30.09.2011. The appellant contested that the demand was unjustified as it was raised based on billing instead of actual receipts, leading to an inflated demand. Additionally, the appellant argued against the Service Tax demand for specific projects like constructions for ESI Hospital and under the JNURM Scheme, claiming exemptions or incorrect categorization. The appellant also asserted that a substantial portion of the demand should be reworked based on actual receipts, which were not considered by the adjudicating authority.

The appellant's counsel contended that Service Tax was payable on the basis of actual receipts until 31.03.2011, not on billing as done by the appellant. The appellant had already discharged the Service Tax liability based on actual receipts, which was not acknowledged by the adjudicating authority. The Departmental Representative (D.R.) conceded that the Service Tax calculation needed to be re-quantified until 31.03.2011. Upon examination, the Tribunal noted that the demand was indeed based on billing instead of actual receipts, necessitating a recalculation of the entire demand. The appellant's claim of having already paid the Service Tax based on actual receipts required consideration, with the appellant willing to provide evidence if given an opportunity.

After considering both parties' arguments, the Tribunal decided to remand the matter back to the original adjudicating authority for a fresh decision. The Tribunal emphasized the need for the appellant to have an effective opportunity to present all submissions and evidence, especially regarding the Service Tax already discharged based on actual receipts. The Tribunal directed the de novo adjudication to be completed within three months from the date of the order due to the long-pending nature of the issue. The appeal was allowed by remand, setting aside the impugned order and keeping all issues open for further consideration.