2020 (9) TMI 477 - AT - Service Tax

Security Service - Reverse Charge Mechanism - requirement to deposit service tax on the portion of 75% of taxable value towards receipt of security service was made applicable for the first time w.e.f. July 2012 - whether the appellant is liable to deposit service tax under Security Service under reverse charge when the entire service tax amount has been reimbursed to the service provider who has deposited the same with the Govt. Treasury as claimed by the appellant? HELD THAT - The original authority while confirming demand has observed that since the tax paid challans copies do not have legible bank seal, the same could not be relied. The appellant has also submitted the payment confirmation from the CBEC website showing the challan wise tax payment - No finding has been given by the learned Commissioner (Appeals) with regard to the submission of said certificate and challan details. Instead the learned Commissioner (Appeals) has reiterated the findings given by the lower authority. The payment is duly supported by way of confirmation from the CBEC website which is on record. Neither the tax calculation details nor the payment confirmation has been disputed by both the authorities below. The only reason assigned by the lower authority for not accepting the said challans is that same did not bear legible bank seal - since the said challans are supported with CBEC website payment confirmation, there is no reason to doubt the payment of tax. Considering the totality of the facts of the case and that the assessee is a Public Sector Undertaking, there is no reason to confirm the demand when service tax stands already paid and there is no loss of revenue to the Exchequer. The demand of service tax, interest and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is liable to deposit service tax under Security Service under reverse charge when the entire service tax amount has been reimbursed to the service provider who has deposited the same with the Govt. Treasury.

Analysis:

The appellant, a PSU engaged in coal mining, filed an appeal against the Order-in-Appeal confirming a service tax demand of ?6,81,863/- for the FY 2012-13. The appellant reimbursed the service tax amount to the security service provider, but the Department did not consider the challans submitted as evidence of payment. The appeal was made to the Tribunal after failing before the Commissioner (Appeals).

The appellant's Chartered Accountant argued that since the entire tax amount was deposited with the treasury by the service provider, no further demand should be raised. Evidence including tax paid challans, CBEC website confirmations, and a certificate from the service provider were submitted but not considered by the authorities. The Chartered Accountant cited relevant Tribunal decisions to support the contention that if tax is already paid by the service provider, the department cannot confirm the same against the assessee. The appellant also contested the demand on grounds of time bar, penalty, and revenue neutrality.

The Revenue's Authorized Representative maintained that the service tax was legally due under reverse charge, and the appellant could not claim relaxation. The Representative urged the dismissal of the appeal.

After hearing both sides, the Tribunal analyzed the evidence presented. The original authority had rejected the challans due to lack of a legible bank seal, but the appellant had provided payment confirmations from the CBEC website and a certificate from the service provider confirming full tax deposit. The Commissioner (Appeals) did not address these submissions and upheld the demand. The Tribunal found that the payment details were supported by CBEC website confirmations, undisputed by the authorities. Given the appellant's status as a PSU and no loss of revenue to the Exchequer, the demand was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal found in favor of the appellant, ruling that the demand for service tax, interest, and penalty be set aside, as the service tax had already been paid and there was no loss to the revenue.