2020 (2) TMI 223 - AT - Service Tax

Repair and maintenance services - Reverse charge mechanism - services received and consumed outside India when the aircrafts were on foreign run - period from 18th April 2006 to 31st March 2008 - HELD THAT - There is no concrete finding on any of the allegations or on the taxability of the various payments made to overseas entities by M/s Kingfisher Airlines Limited. For the most part, the findings are devoted to the failings in the show cause notice on lack of being specific and the lack of having discharged the burden of proof necessary for rendering a finding. While one cannot but concur with his finding that, in the absence of legal provision prior to the insertion of section 66A of Finance Act, 1994, there could not be any taxability on discharge remittance, we cannot agree with him that the adjudication order has discharged its obligation to discuss the allegations in the show cause notice for rendering a finding thereon - It was incumbent upon the adjudicating authority to examine various evidences, including payments and agreements entered upon to come to the conclusion of taxability or otherwise. The matter remanded back to the original authority for a fresh decision after consideration of the facts and evidence on records - appeal allowed by way of remand.

Summary

Issues:
1. Early hearing of appeals dismissed as infructuous
2. Liability for service tax on repair and maintenance services
3. Dismissal of appeals in default due to non-appearance
4. Tax liability on payments made for business auxiliary services, commercial training, and consultancy services
5. Allegations of tax evasion and classification of services
6. Lack of concrete findings in the adjudication order

Analysis:
1. The Tribunal dismissed the Revenue's applications seeking early hearing of appeals as infructuous.

2. The appeals stemmed from show cause notices demanding service tax for repair and maintenance services. The appellant claimed no liability as services were received outside India. The Tribunal dismissed the appeals due to the appellant's prolonged non-appearance.

3. Separate proceedings involved tax liability on payments for business auxiliary services, commercial training, and consultancy services. The demands were initially dropped but later challenged by Revenue. The Special Counsel argued that the original authority erred in not categorically determining tax evasion and service classification.

4. The Tribunal noted the lack of concrete findings in the adjudication order regarding the taxability of payments made by the appellant. It emphasized the importance of examining evidence to determine tax liability accurately. The order was set aside, and the matter was remanded for a fresh decision based on facts and evidence.

5. Ultimately, the appeal of the appellant was dismissed, while the appeals of Revenue were remanded back to the original authority for further consideration.

This detailed analysis covers the issues addressed in the judgment comprehensively, highlighting the key legal aspects and decisions made by the Tribunal.