2018 (6) TMI 813 - AT - Service Tax

Business Auxiliary Service - recovery of the Service Tax allegedly not paid by the appellant - Rate of tax - Held that - The rate of Service Tax has been reduced w.e.f 25/02/2009 and hence the appellant will be entitled to lower rate from that date - claim of appellant allowed. Service tax on Commission - case of appellant is that Service Tax amounting to about 5 Lakhs will not be payable since this pertains to the Commission amount for work done in 2008-09 to 2009-10 which has not been actually received by the appellant - Held that - we are unable to accept the claim of the appellant especially since the same is not supported by any documentary evidence - demand set aside. Appeal allowed in part.

Summary

Issues:
Challenge to Order-in-Original No. 99/2013 dated 30/09/2013 regarding Service Tax liability for the period of 2007-08 to 2009-10.

Analysis:
The appellant, engaged in manufacturing MS Ingots and other steel products, also acted as a 'Commission Agent' during the disputed period. Allegations of improper Service Tax payment led to an investigation where a hard disk was seized for forensic analysis. It was discovered that the appellant had not declared full commission amounts received and had suppressed taxable services' value. A show cause notice was issued, leading to the impugned order.

During the hearing, the appellant accepted a portion of the Service Tax liability but contested the remaining amount. The appellant argued against paying &8377; 1.2 Lakhs for 2008-09 due to a reduced tax rate and &8377; 5 Lakhs for 2008-09 to 2009-10 as the commission amounts were allegedly not received.

The Revenue justified the demand, stating that the reduced tax rate benefit was not applicable as no evidence supported the appellant's claim of receiving part of the consideration during a specific period. The Revenue also argued that the appellant failed to declare commission amounts received, leading to the differential Service Tax demand.

After careful consideration, the Tribunal upheld the Service Tax liability of about &8377; 57 Lakhs but allowed the appellant's claim for the &8377; 1.2 Lakhs due to the reduced tax rate. However, the claim of &8377; 5 Lakhs was rejected as the Department's allegation of suppressed commission amounts, supported by forensic evidence and the appellant's admission, was deemed valid. Thus, the impugned order was upheld except for the relief granted on the reduced tax rate claim.