2018 (11) TMI 982 - AT - Service Tax

Short payment of service tax - It appeared to Revenue from scrutiny of some invoices that appellant had been charging over and above service charges from 2003 onwards - case of appellant is that they have not collected service tax in most of the cases - Held that - The appellant should be given one more opportunity to produce all the relevant documents in support of the claim made before this Bench that their actual receipts and payments are in fact much lower than the tax liability worked upon in consequence - appeal allowed by way of remand.

Summary

Issues:
1. Demand of service tax on Video Tape Production and Programme Production Service.
2. Demand of service tax on renting of Immovable property service.
3. Imposition of penalties under Section 76 & 78 of the Finance Act, 1994.

Analysis:
1. The appellants, engaged in Video Tape Production and Programme Production Service, faced a demand of service tax after an audit revealed potential discrepancies. The show cause notice proposed a substantial amount as tax along with penalties. The impugned order confirmed the tax demand and imposed penalties under Section 78 but refrained from applying penalty under Section 76. The appellant challenged this decision.
2. During the hearing, the appellant's consultant presented several arguments. They highlighted issues with the accounting practices for certain years, emphasizing that some receipts were not properly categorized. The consultant also pointed out discrepancies in the tax calculations, proposing revised tax liabilities based on actual receipts and payments. They requested a remand to provide additional evidence and sought the benefit of reduced penalties as per the law.
3. The respondent, on the other hand, supported the impugned order, arguing that the appellants had sufficient opportunity to present their case during adjudication. However, the Tribunal noted that crucial data regarding service tax collection was missing from the records, prompting a decision to grant the appellants another chance to produce relevant documents. The Tribunal directed a de novo adjudication, emphasizing the need for accurate quantification of tax liabilities and the provision of cum duty benefit where service tax was not collected. The penalty under Section 78 was upheld, with a reminder that penalties should align with the revised tax liabilities determined in the fresh proceedings.

This judgment highlights the importance of accurate documentation and the opportunity for appellants to substantiate their claims during tax disputes. The Tribunal's decision to remand the case for further adjudication underscores the significance of providing complete and verifiable information to ensure fair tax assessments and penalty considerations.