2019 (4) TMI 1270 - AT - Service Tax

Adjustment of excess paid tax with short paid tax - HELD THAT - The short payment of ₹ 7,43,002/- arose during the financial year 2009-10 as the amount was adjusted from the excess payment made in the financial year 2008-09 and this fact is verifiable from the Statutory records, audited accounts and other relevant documents of the appellant. Service tax on TDS amount - HELD THAT - The appellants have calculated their Service Tax liability on the gross amount of Commission received and hence, there is no occasion to demand the Service Tax again on the TDS amount received by them which is in fact a portion of gross amount. Appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged evasion of Service Tax, nonpayment of Service Tax on TDS amount received, confirmation of demand by Adjudicating Authority, penalty imposition, appeal rejection by Ld. Commissioner (Appeals), appeal before the Tribunal.

Analysis:
1. The case involved the appellants, manufacturers of Iron and Steel items, who received commission for providing 'Business Auxiliary Services.' A Show Cause Notice was issued alleging evasion of Service Tax during specific periods and nonpayment of Service Tax on the TDS amount received.

2. The Adjudicating Authority confirmed the demand, imposed penalties under Sections 77 and 78 of the Finance Act, 1994, and the Ld. Commissioner (Appeals) upheld the decision, leading to the appeal before the Tribunal.

3. The Appellant Company's Authorized Representative argued that the Commission received was duly accounted for, and during the relevant periods, the Service Tax liability was calculated based on the gross amount of Commission received. They presented evidence to support their claim, including a Chartered Accountant's Certificate.

4. The Department, represented by the Ld. DR, contested the appellant's submissions, highlighting inconsistencies in the figures provided and called for further verification.

5. Upon review, the Tribunal found that the alleged short payment arose due to adjustments from the previous financial year, which was supported by statutory records and audited accounts. Additionally, it was clarified that Service Tax liability should be calculated on the gross amount received, not on the TDS amount.

6. The Tribunal concluded that the appellants had correctly calculated their Service Tax liability based on the gross Commission received, eliminating the need for additional taxation on the TDS amount, which is part of the gross amount.

7. Consequently, the Tribunal set aside the impugned orders, allowed the appeal filed by the appellants, and provided for any consequential relief deemed necessary.