2018 (8) TMI 1585 - AT - Service Tax

Courier Agency Service - co-leader - non-payment of service tax - Held that - When the Board has clarified that the demand in respect of co-loader is not subject to levy of service tax and the adjudicating authority having stated in page-5 that the period of demand on this issue being upto March, 2005, it is necessary to verify as to what is the actual demand in respect of the services relating to co-loader - it is fit to remand the matter to the adjudicating authority who shall reconsider the issue after giving a reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues:
Alleged non-payment of service tax under "Courier Agency Service" taxable from 01.11.1996, remand by Commissioner (Appeals) to original authority, reduction of demand by adjudicating authority, setting aside of demand by Commissioner (Appeals) based on co-loader issue, lack of disclosure of income earned from courier services sent outside India.

Analysis:

The case involved an appeal before the Appellate Tribunal regarding the non-payment of service tax under "Courier Agency Service" from 01.11.1996. The Commissioner (Appeals) had remanded the matter to the original authority for reconsideration based on a Board's Circular. The original authority confirmed a demand of ?14,28,372, which was later set aside by the Commissioner (Appeals). The Revenue appealed to the Tribunal, arguing that the demand included services rendered as a co-loader.

The Revenue contended that the Commissioner (Appeals) had disregarded the issue of co-loader services, leading to the setting aside of the entire demand. The Revenue highlighted three types of income received by the assessee: income from direct clients, income from packages sent to foreign countries, and income from packages sent through other courier agencies abroad. The Revenue argued that the Board's Circular on co-loader services did not cover courier services for packages sent outside India. The Commissioner (Appeals) was accused of accepting the respondent's contentions without evidence and confusing the issue by claiming courier packages sent abroad should be treated as "Export of service."

Despite repeated notices, no one appeared on behalf of the respondent during the proceedings. Upon review, the Tribunal found discrepancies in the orders passed by the authorities below. While the adjudicating authority had ruled no service tax was payable on income earned as a co-loader, it held that services for courier packages sent outside India were not considered exports and were subject to service tax. The Tribunal observed a lack of clarity on the actual demand related to the co-loader issue and decided to remand the matter to the adjudicating authority for further consideration.

In conclusion, the Tribunal set aside the impugned order and remanded the appeal to the adjudicating authority for a reevaluation of the issues discussed, particularly concerning the services related to the co-loader and courier packages sent outside India.