2018 (4) TMI 1172 - AT - Service Tax

Penalty - non-discharge of liability of service tax - absence of legible copies of deposit challan's - GTA services - Held that - the Courts below have erred in observing that the appellant have not deposited the tax and or the challan's are not legible - the appellant had deposited the service tax on reverse charge basis. The period in dispute is from August, 2006, wherein the issue of payment of service tax on GTA on reverse charge basis was highly litigated and the same was settled sometime in the year 2009(Indian National Ship Owners Association, Care) and by subsequent amendments - there is no question of charging any interest and levy of any penalty on the appellant assessee. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service tax demand and penalty under Section 78.
2. Verification of evidence of tax payment.
3. Legibility of challans and documentary evidence.
4. Appeal rejection by Learned Commissioner (Appeals).
5. Payment of service tax on reverse charge basis.
6. Settlement of the issue of service tax on GTA on reverse charge basis.
7. Interest payment and penalty imposition.

Analysis:
1. The Tribunal, in an earlier appeal, observed a service tax demand with penalty under Section 78 against the appellant for availing GTA services. The matter was remanded for verifying evidence of tax payment.

2. The adjudicating authority, post remand, noted the appellant submitted photocopies of challans and ledger, but challans lacked clear details. The authority was unconvinced of tax payment, reconfirming the demand with interest and penalty.

3. The Assistant Commissioner's decision was appealed before the Learned Commissioner (Appeals), who upheld the demand. The appellant challenged this decision before the Tribunal again.

4. The appellant argued they paid service tax on reverse charge basis for the disputed period, citing specific challan details. The Tribunal agreed, considering the settled nature of the issue post-2009 and subsequent amendments, setting aside the penalty under Section 78.

5. The Tribunal found no basis for charging interest or imposing penalties, as the appellant had paid the service tax on reverse charge basis. The appellant had already paid the interest amount.

6. Consequently, the Tribunal allowed the appeal, overturning the impugned order. The appellant was granted consequential benefits as per the law.

This detailed analysis covers the issues involved in the legal judgment comprehensively, highlighting the key points and legal arguments presented by the parties involved.