2018 (5) TMI 980 - AT - Service Tax

Demand of service tax - mismatch between the value declared in ST-3 return and profit and loss account - sale of scrap - Held that - once the service tax was discharged again only because the same amount was created as debtor causing the demand is double taxation of the same. If this is correct, then on the date of creating debtor on account of PF which was created by SCCL, the appellant is not liable to pay service tax subject to verification of facts that amount already suffered service tax. Sale of scrap - Held that - obviously the sale of scrap is not a service, hence the same is not liable for service tax. Since the lower authority has not verified all these factual aspects, the matter needs to be remanded - appeal allowed by way of remand.

Summary

Issues:
Appeal against order-in-appeal upholding service tax demand due to mismatch between ST-3 return and profit/loss account. Appellant argues for actual receipt-based tax payment, excess payment in 2011-12, debtor creation due to PF deduction by SCCL, and sale of scrap not attracting service tax. Revenue contends lack of documentary evidence supporting appellant's submissions.

Analysis:
The appeal challenges the order-in-appeal confirming a service tax demand based on a discrepancy between the value declared in the ST-3 return and the profit and loss account. The appellant asserts that service tax should be paid on actual receipts, not accruals, highlighting an excess payment in 2011-12. Additionally, the appellant mentions a debtor created due to PF deduction by SCCL, which was later disputed, and part of the debtor amount related to the sale of scrap not subject to service tax. These aspects were not considered by the lower authorities, leading to the claim that the demand is unsustainable.

The Revenue, represented by the Assistant Commissioner, supports the impugned order and argues that the appellant failed to provide documentary evidence to substantiate their submissions. Consequently, the Revenue asserts that the demand was correctly confirmed, emphasizing the lack of grounds for interference due to the absence of supporting documentation from the appellant.

Upon reviewing the submissions and records, the Member (Judicial) notes the mismatch between the ST-3 return and the profit and loss account. Recognizing the need for proper reconciliation based on documentary evidence, the Member addresses the appellant's arguments regarding the debtor created from the PF deduction by SCCL. It is suggested that if the service tax was already paid on the amount deducted as PF and subsequently created as a debtor, double taxation should be avoided. The Member also acknowledges that the sale of scrap does not attract service tax but requires verification from the books of account. As the lower authorities did not verify these factual aspects, the matter is remanded for a fresh order after thorough verification of all relevant facts based on documentary evidence.

In conclusion, the impugned order is set aside, and the matter is remanded to the adjudicating authority for a fresh decision considering all the facts discussed, including the actual receipts for tax payment, the disputed debtor due to PF deduction, and the sale of scrap not liable for service tax. The appeal is allowed by way of remand, emphasizing the importance of verifying all relevant facts based on documentary evidence.