2018 (7) TMI 1118 - AT - Service Tax

Management, Maintenance or Repair Service - appreciation of factual and legal submissions not made - Principles of natural justice - Held that - Since the learned Commissioner has not considered the submissions raised by the assessee regarding the wrong calculation of interest, I am of the opinion that this case needs to be remanded back to the original authority to consider the details of payment of interest keeping in view the various documents which may be submitted by the appellant and re-compute the interest on the basis of various documents which may be produced by the appellant. Penalty for non-filing of returns - Held that - The said penalty is not imposable in view of the fact that the appellants have filed the returns and this fact has been observed in the show-cause notice itself and the stand of the appellant from the very beginning is that he has filed the return in time - penalty set aside. Appeal allowed by way of remand.

Summary

Issues:
Appeal against Order-in-Original for service tax demand, interest, and penalty.

Analysis:
The appellant, engaged in marketing and reselling computer software packages, hardware, and peripherals, faced a service tax demand of ?1,74,12,367, interest of ?5,79,031, and a penalty of ?80,000. The Commissioner confirmed the demand but CESTAT remanded the matter due to a wrong premise in the show-cause notice. The Commissioner later dropped the demand but confirmed interest and penalty. The appellant challenged the interest and penalty imposition.

The appellant argued that the impugned order ignored their detailed submissions on interest calculation, including monthwise tax payable, payment details, and delay specifics, supported by TR-6 challans. The Commissioner incorrectly upheld the interest of ?5,79,031, while the appellant claimed it was ?3,523, already paid during audit. The penalty of ?80,000 for late filing was disputed as the returns were filed on time, contradicting the show-cause notice annexing filed returns.

The AR supported the impugned order findings. However, the Tribunal found the Commissioner failed to consider the appellant's detailed submissions on interest calculation. The case was remanded for a re-computation based on the documents provided. Regarding the penalty, as the returns were filed on time, the penalty of ?80,000 was dropped, aligning with the appellant's consistent stance. The appeal was disposed of, remanding the matter for re-computation of any interest liability.

In conclusion, the Tribunal acknowledged the appellant's detailed submissions and directed a re-computation of interest, emphasizing the importance of considering all provided documents. The penalty for late filing was dropped due to timely submission of returns, in line with the appellant's claims and the show-cause notice. The judgment highlighted the necessity of proper consideration of evidence in tax disputes to ensure fair outcomes.