2018 (9) TMI 394 - AT - Service Tax

Refund of service tax - refund claimed for the duty on difference value estimated in the month of March 2011/ finalized in the month of November 2011 and the revised value in the month of March 2011 - Held that - While the appellant have claimed that they raised the invoice of ₹ 16,91,000,00/-, the entry shown by them added up to 16,78,65,570/-. We also observed that if three entries i.e. 85,570,740/- separate ₹ 82,294,830/- and ₹ 117,535,680/- are added then the total comes to 285,401,250/-. The appellant had claimed that the provisional figure appearing in the balance sheet was ₹ 28,49,43,332 /-. Enough evidence has not been produced to show that the appellant had indeed received much lesser amount then that recorded in their balance sheet. It is also not clear if the price was earlier fixed at ₹ 28,49,43,332/- and latter re-negotiated at ₹ 16,91,000,00/- or if the price was never fixed and for the first time it was negotiated at ₹ 16,91,000,00/- - thus, it is not clear that if appellant had received an amount less then what was recorded in the balance sheet for the year 2010-11. If the transaction was complete by way of book entry in the record of book of appellant and M/s Vodafone India Ltd at the time of finalization of the balance sheet of the year 2010-11. The factual position needs to be ascertained if the 1. Service was completed in the year 2010-11 or it continued in 2011-12 as it appear from the ledger; 2. If the Vodafone India Ltd had recorded in their balance sheet the value corresponding to the value recorded in the balance sheet of appellant completing the transaction; and 3. The four payments entries made in the appellant s ledger of Vodafone India Ltd relate to which periods. Appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection based on valuation discrepancy - Provisional vs. final value, invoice issuance, ledger entries analysis, negotiation of price, duty payment, refund claim submission, evidentiary support, re-adjudication requirement.

Analysis:
The appeal pertains to a refund claim rejection by M/s Vodafone India Services Pvt. Ltd concerning a valuation discrepancy. The appellant argued that they had initially valued the consideration for services provided to Vodafone India Ltd at approximately ?28.5 Crore in March 2011, which was later finalized at the same value in November 2011, reflected in their balance sheet, and tax paid accordingly. However, after negotiation, the final transaction was recorded at ?16.91 Crore in March 2012, leading to a refund claim for the duty difference. The appellant contended that despite submitting all documents, the claim was not considered, highlighting the transaction under un-billed revenue due to delayed invoicing.

The respondent relied on ledger entries showing additional amounts received, suggesting a higher total sum from Vodafone India Ltd, and emphasized the absence of issued invoices despite price negotiation. The Tribunal reviewed the submissions, noting the provisional entry of ?28.49 Crore in March 2011, finalized in November 2011 with duty payment, and the revised value of ?16.91 Crore. Discrepancies in ledger entries raised questions, with the appellant claiming the entries related to services provided in 2010-11, while the respondent pointed out additional amounts received under the same head.

Further analysis revealed uncertainties regarding the final price negotiation process, whether initially fixed at ?28.49 Crore and later revised to ?16.91 Crore, or negotiated for the first time at the latter amount. The Tribunal highlighted the need to clarify if the appellant received less than the recorded balance sheet amount for 2010-11, emphasizing the importance of ascertaining factual details concerning service completion timelines, corresponding balance sheet entries by Vodafone India Ltd, and the period relevance of the payments in the appellant's ledger.

Consequently, the Tribunal directed a re-adjudication by the Original adjudicating authority to resolve the factual ambiguities, advising a decision within three months from the order receipt. The appellant was granted the opportunity to present additional evidence to support their claim, and the appeal was allowed for remand based on the outlined terms.