2018 (12) TMI 504 - AT - Service Tax

Principles of Natural Justice - demand of Service Tax on various income - Income from Public Issue - Interest of RBI Relief Bonds - Interest received from others - Income from Mutual Funds - Income from Distributor and others - Held that - The lower authority have not specifically discussed each heads of income arises and how the said income becomes taxable as a service. The impugned orders are therefore set aside and matter remanded to the original adjudicating authority to clearly give finding in respect of each head of demand confirmed by Commissioner (Appeals) - appeal allowed by way of remand.

Summary

Issues Involved:
Confirmation of demand of Service Tax and imposition of penalty, invocation of extended period of limitation, nature of income under different heads, remand to original adjudicating authority.

Analysis:

1. Confirmation of Demand of Service Tax and Imposition of Penalty:
The appeals were filed against the confirmation of demand of Service Tax and imposition of penalty. The period involved in the appeals was specified - 2004-05 to 2005-06 in one appeal and 2007-2008 in the other. The issue involved was identical in both appeals, and the extended period of limitation was invoked. The counsel argued against the invocation of the extended period, citing a decision of the Hon'ble Apex Court. The demand of Service Tax was related to income from various sources like public issue, RBI Relief bonds, interest received from others, among others. The demand was confirmed partially in one of the appeals.

2. Invocation of Extended Period of Limitation:
The counsel contended that since separate SCNs were issued for different periods invoking the extended period, the SCN for the later period could not be sustained based on a decision of the Hon'ble Apex Court. The demand of Service Tax was connected to income from different sources, and it was argued that identical issues were involved in both appeals. The demand was related to income from public issue, interest of RBI Relief Bonds, interest received from others, income from Mutual Funds, and income from Distributor and others.

3. Nature of Income Under Different Heads:
The lower authority did not specifically discuss each head of income and how it becomes taxable as a service. Therefore, the impugned orders were set aside, and the matter was remanded to the original adjudicating authority. The original adjudicating authority was directed to provide clear findings on each head of demand confirmed by the Commissioner (Appeals), discussing the nature of income and how it falls under the category of service for which tax was demanded.

4. Remand to Original Adjudicating Authority:
The impugned orders were set aside, and the case was remanded to the original adjudicating authority to pass a fresh order, keeping all issues open. The decision was pronounced in the open court on a specific date.

In conclusion, the judgment dealt with the confirmation of Service Tax demand, invocation of extended period of limitation, the nature of income under different heads, and the remand to the original adjudicating authority for a detailed examination of the issues involved.