2018 (6) TMI 714 - AT - Service Tax

Validity of SCN - case of appellant is that the very basis of the allegation in SCN is not correct, as the demand has been raised on the profit and loss account instead of the actual amount received as per invoices - Held that - The authorities below have not accepted the explanation observing that the appellant has not produced enough documents. The Ld.Counsel has requested for further chance to establish the case of the appellant - it is appropriate to remand the matter to the adjudicating authority to reconsider the issue after giving opportunity to the appellant for personal hearing - appeal allowed by way of remand.

Summary

Issues:
1. Discrepancy in income figures between profit and loss account and ST-3 returns.
2. Applicability of service tax on specific charges.
3. Request for remand to establish case with documentary proof.

Analysis:
1. The case involved a discrepancy in income figures declared by the appellant in their profit and loss account and ST-3 returns for the years 2001-2002 to 2004-2005. The department issued a Show Cause Notice proposing the demand of service tax, interest, and penalty due to the difference. The original authority and the Commissioner (Appeals) confirmed the demand. The appellant contended that the demand was based on the profit and loss account instead of the actual amount received as per invoices. The appellant requested a remand to explain the difference with documentary proof.

2. The appellant argued that certain charges included in the income, such as reimbursable expenses like CCTL charges, handling charges, transport charges, Customs Duty, and bank commission, were not subject to service tax as per Board circulars and tribunal decisions. The appellant claimed that service tax should only be paid on the agency commission actually received. The appellant cited relevant circulars and tribunal decisions to support their argument. The authorities did not accept the explanation initially, stating that insufficient documents were provided. The case was remanded to the adjudicating authority for reconsideration, with the appellant instructed to furnish all relevant documents for further review.

3. After considering the arguments from both sides, the tribunal set aside the impugned order and allowed the appeal by way of remand to the adjudicating authority. The tribunal directed the adjudicating authority to give the appellant an opportunity for a personal hearing and to reconsider the issue based on the additional documents to be provided by the appellant. The decision was pronounced in open court, concluding the case with a remand for further examination and clarification of the issues raised.