2019 (2) TMI 381 - AT - Service Tax

Non-payment of service tax - security services - computation of demand by extending cum-tax benefit - Held that - In the present case disputed, the computation of demand stating that the cum-tax benefit though requested by them before the authorities below, the same was not extended - From the impugned order, it is found that since the appellant could not place necessary agreement/evidence whereunder, service has been provided to Nagpur Municipal Corporation, the authorities below could not examine the claim of the appellant relating to cum-tax benefit and consequently rejected the same. In the interest of justice, the matter is remanded to the adjudicating authority to compute the demand afresh taking into consideration the documents/evidence that would be produced by the appellant in support of their claim of cum-tax benefit - appeal allowed by way of remand.

Summary

Issues:
- Denial of cum-tax benefit in computing service tax demand

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner (Appeals) Central Excise & Customs, Nagpur. The appellant provided services under the taxable category of 'security agency service' during a specific period but failed to pay the appropriate service tax. A show cause notice was issued for the recovery of the unpaid service tax amounting to ?35,56,754/- along with interest and penalty. The demand was confirmed with interest and penalty after adjudication. The appellant challenged the denial of cum-tax benefit while computing and confirming the demand before the Ld. Commissioner (Appeals), who rejected the appeal, leading to the present appeal.

The Ld. Advocate for the appellant argued that the denial of cum-tax benefit in the impugned order was based on the appellant's failure to provide a copy of the agreement related to the provision of taxable service. The appellant later obtained the necessary agreement between them and the Dy. Municipal Commissioner NMC, Nagpur, and requested a remand to the adjudicating authority to re-compute the demand by extending cum-tax benefit, subject to document verification. The Ld. AR for the Revenue had no objection to remanding the matter.

Upon hearing both sides and examining the records, the Tribunal found that the appellant disputed the demand computation, claiming that the cum-tax benefit requested by them was not extended by the authorities below. Since the necessary agreement/evidence supporting the service provided to Nagpur Municipal Corporation was not presented, the authorities could not assess the appellant's claim regarding cum-tax benefit and consequently rejected it. The Ld. Advocate informed the Tribunal about the possession of the agreement and requested a remand to the adjudicating authority. In the interest of justice, the matter was remanded to the adjudicating authority for a fresh computation of the demand, considering the documents/evidence to be produced by the appellant in support of their claim of cum-tax benefit. The appeal was allowed by remanding the matter to the adjudicating authority for further proceedings.