2019 (12) TMI 647 - AT - Service Tax

Calculation of service tax - on which amount service tax liable to be paid - whether Service Tax liability is to be discharged on the amount actually received by the Appellant or on the amount shown in the trial balance sheet? - HELD THAT - There is no hesitation in accepting the contention of the Appellant that Service Tax has to be paid on the basis of the amount received during that particular period. This is clear from the Trade Notice dated 3 January 1997. Though in the reply submitted by the Appellant and in the written submissions that were filed during the course of personal hearing, the Appellant had submitted that Service Tax had been paid on the amount actually received by the Appellant during the period but it will be appropriate to remand the matter to the Commissioner to examine the issue - Appeal allowed by way of remand.

Summary

Issues involved: Determination of Service Tax liability based on amount received vs. amount shown in the trial balance sheet.

Analysis:

The appeal sought to challenge the order passed by the Commissioner confirming the demand of Service Tax with penalty and interest. The key issue revolved around whether the Service Tax liability should be discharged based on the amount actually received by the Appellant or the amount reflected in the trial balance sheet. The Appellant contended that Service Tax should be paid on the amount received, citing a Trade Notice from the Rajkot Commissionerate dated 3 January 1997.

The Commissioner, in the impugned order, noted the Appellant's failure to provide a reconciliation statement and found the Chartered Accountant's certificate insufficient to clarify the situation. However, the Tribunal acknowledged the Appellant's argument that Service Tax should be paid based on the amount received during the relevant period, as supported by the Trade Notice from 1997.

While the Appellant maintained that Service Tax had been paid on the amount received, the Tribunal decided to remand the matter back to the Commissioner to specifically examine whether the Appellant had indeed paid Service Tax on the amount received during the period in question. The Tribunal refrained from addressing the issue of the show cause notice exceeding the normal limitation period, leaving it open for the Appellant to raise in a subsequent appeal if necessary.

The Tribunal directed the Commissioner to issue a fresh order promptly, preferably within three weeks, after the Appellant presents relevant documents. The impugned order was set aside, and the appeal was allowed to the extent indicated, emphasizing the importance of paying Service Tax on the basis of the amount actually received.