2018 (8) TMI 174 - AT - Service Tax

Demand of Differential Duty - difference of amounts reflected in the ST3 returns and the ledger accounts - allegation is based upon the investigation during the course of verification of accounts and also on the ground there were two sets of invoices raised - Held that - During the relevant period in question, tax liability has to be discharged on the receipt basis and demand being hit by limitation as same set of allegations, levelled in earlier show cause notice, the impugned order is correct, legal and does not require any interference - Appeal dismissed.

Summary

Issues:
Differential Service Tax liability for the period 2003-04 to 2006-07; Allegations of undervaluation of taxable services; Issue of limitation in the demand for Service Tax.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal No.06/2009 (G) (ST), dated 06.05.2009, regarding the demand for differential Service Tax from the respondent for the period 01.04.2003 to 30.11.2004. The show cause notice was based on discrepancies between ST3 returns and ledger accounts, as well as the existence of two sets of invoices. The respondent contended that the Service Tax liability was discharged on a receipt basis, while ledger accounts were maintained on an accrual basis. The adjudicating authority confirmed the demands, but the first appellate authority disagreed, focusing on the issue of limitation.

The Departmental Representative argued that the undervaluation of taxable services was not adequately explained, pointing out discrepancies between Income Tax returns and Service Tax returns. The Department contended that the under-assessment of tax resulted in short payment, alleging intentional undervaluation by the assessee. The respondent's counsel countered, stating that there was only one set of invoices, some with Service Tax charged and some without, paid upon receipt.

The core issue revolved around confirming the differential Service Tax liability for the period 2003-04 to 2006-07. The Service Tax liability was claimed to be discharged based on the receipt of taxable services rendered during the relevant period. The first appellate authority accepted the assessee's claim, emphasizing that the current show cause notice was similar to a previous notice from 31.01.2006, thus invoking limitation.

The first appellate authority's findings supported the assessee's position, noting that the demands were based on the same set of allegations as a previous notice, hence not invoking the extended period of limitation. Consequently, the Tribunal upheld the impugned order, rejecting the appeal as correct, legal, and not warranting interference.