2019 (5) TMI 666 - AT - Service Tax

Short payment of service tax - Cargo Handling service - demand of differential duty - period October, 2014 to March, 2015 - applicability of section 73(1B) of the Finance Act, 1994 - HELD THAT - The section was inserted with effect from 14.05.2015 and there is no indication, whatsoever, in this sub-section that it is meant to have retrospective application. It is a well settled legal position that fiscal statutes always have prospective application unless a contrary intention appears in the statute itself. In this case, there is no indication of such application and therefore, section 73(1B) applies only with effect from 14.05.2015 and not to earlier cases such as the present one. Demand of differential duty - it was alleged that original authority considered only the original return and not the revised one or the return for the financial year 2015-16 in which details of payments for the earlier financial year have been indicated - HELD THAT - Along with this appeal, the appellant has filed a copy of ST-3 return for the year 2015-16 which does indicate some amounts paid through challans at Sl.No.H2 as payments towards arrears . These amounts need to be reckoned while deciding the tax liability by the appellant. Had the appellant submitted copies of this return before the original authority and First Appellate Authority they could have avoided unnecessary litigation in appeal to that extent - this is a fit case to be remanded back to the original authority to consider the challans and the ST-3 returns filed by the appellant including revised ST-3 returns for 2014-15 and ST-3 returns for the financial year 2015-16 and re-determine the tax liability, interest and penalties, if any. Appeal allowed by way of remand.

Summary

Issues:
Appeal against Order-in-Appeal for non-payment of service tax liability, applicability of section 73(1B) of the Finance Act, 1994, consideration of revised ST-3 return and challans in determining tax liability.

Analysis:
The appeal was filed against an Order-in-Appeal demanding differential service tax for the Financial Year 2014-15. The appellant, engaged in Cargo Handling and Port services, admitted to not discharging their total service tax liability. A show cause notice was issued, proposing to demand the unpaid tax, interest, and penalties. The lower authority confirmed the demand, interest, and penalties, which was upheld by the first appellate authority, leading to this appeal.

The appellant argued that they had short-paid service tax but subsequently filed a revised ST-3 return and paid the differential tax through challans, reflecting the payments in their ST-3 returns for the financial year 2015-16. They contended that section 73(1B) of the Finance Act, 1994, should apply, as they self-assessed the tax and paid it before any notice was issued. However, the authorities did not consider this plea, citing the absence of section 73(1B) during the relevant period.

The departmental representative supported the lower authority's findings, stating that the e-receipts provided by the appellant did not clearly indicate payment towards the outstanding service tax for 2014-15. He argued that any tax already paid by the appellant had been adjusted by the original authority. The Tribunal noted that section 73(1B) was not retrospective and only applied from 14.05.2015, thus not relevant to the case. The failure to consider the revised ST-3 return and challans by the original authority was deemed a crucial oversight.

The Tribunal found merit in the appellant's submission of the ST-3 return for 2015-16, indicating payments towards arrears, and decided to remand the case back to the original authority. The Tribunal directed the authority to consider the challans and all relevant ST-3 returns to re-determine the tax liability, interest, and penalties, if any. Consequently, the appeal was allowed by remanding it to the original authority for a comprehensive reassessment.