2019 (1) TMI 373 - AT - Service Tax

Short payment of service tax - erection, commissioning and installation services - works contract service - CENVAT Credit availed in excess - Held that - This issue relates to examination of documents and thereafter to correlate as to whether there was any short payment of service tax during the impugned period w.e.f. July, 2012 to March, 2014 and as to whether the excess cenvat credit of ₹ 54,192/- has been availed by the appellant during the said period - there is no denial on part of the Department to the effect that the system of submitting return had a major change requiring the assessee to file the half yearly returns instead of the annual returns w.e.f. the year 2012. There is also no apparent denial of rebutting the failure in the software of the appellant as is mentioned by them. Perusal of various documents also makes it clear that there is no intentional act on the part of the appellant to evade the duty. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Short payment of service tax and cenvat credit, Alleged error in filing ST-3 Returns, Change in rate of duties and filing procedure, Failure of software leading to discrepancy in tax payment, Appeal against the order confirming proposed recovery.

Analysis:
The appellant, engaged in taxable services, faced a show cause notice for alleged short payment of service tax and wrongly availed cenvat credit during a specific period. The Additional Commissioner confirmed the proposed recovery, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

The appellant argued that errors in tax payment were unintentional due to software failure caused by changes in filing procedures and duty rates. They highlighted timely filing of returns, providing necessary details, and rectifying errors promptly. However, the Department contended that the appellant failed to provide documents despite opportunities for a personal hearing.

The Tribunal noted discrepancies in tax payments and cenvat credit availed by the appellant. It recognized the changes in filing procedures and acknowledged the software issues faced by the appellant. The Tribunal observed that the documents, including ST-3 Returns and calculation charts, were submitted to the authorities, indicating no intentional evasion of duty.

Moreover, the appellant self-assessed and rectified errors by depositing the due amount. A certificate from their Chartered Accountant explained the software glitches causing the discrepancies. The Tribunal found the adjudicating authority erred in dismissing relevant documents and contentions without specifying provisions, thereby supporting the appellant's claims.

Based on the findings, the Tribunal set aside the order under challenge, allowing the appeal and directing any consequential benefits to follow. The judgment emphasized the importance of considering all relevant evidence and technical issues in tax matters to ensure fair adjudication.