2021 (8) TMI 1119 - AT - Service Tax

Recovery of excess amount collected as service tax - Recoveries to be made u/s 73 or 73A - document for computation of demand of service tax - Form 26-AS or Balance Sheet? - extended period of limitation - penalty - Whether the excess recovery of the service tax can be recovered under Section 73 of the Finance Act, 1994 or Section 73-A of the Finance Act, 1994? - HELD THAT - If any amount is collected more than the actuals, the said amount is recoverable from the assessee under Section 73-A of the Act. Although show cause notice invoked the provisions of Section 73-A of the Act, but the adjudicating authority has not invoked the provisions of Section 73-A of the Act and the said findings of the adjudicating authority have not been challenged by either of the side before any appellate authority - the confirmation of the excess amount recovered by the appellant cannot be demanded under Section 73 of the Act. Therefore, the demand confirmed under Section 73 of the Act excess recoveries made by the appellant on account of service tax cannot be demanded under Section 73 of the Act. Which figures are to be taken for computation of demand of service tax, (a) Form 26-AS or (b) Balance Sheet? - HELD THAT - Balance sheets figures records all the transactions done by the appellant by way of issuing invoices and receipts amounts thereof and the said Balance sheets have been certified by the Chartered Accountant. In that circumstance, figures of the balance sheets are more authenticate to compute the service tax recoverable from the appellant. But the adjudicating authority chose the figures whichever is higher comfortable to him/her which is not correct. As balance sheets figures are certified by the Chartered Accountant and the same are more authentic figures, therefore, the service tax demand is to be computed on the basis of balance sheets figures - impugned order qua computation on the basis of balance sheets needs examination at the end of the adjudicating authority. Whether extended period of limitation is invokable in the facts and circumstances of the case or not? - HELD THAT - In this case, extended period of limitation is not invokable as it is a case of availment of benefit of Notification No. 30/2012-ST dt. 20.06.2012 and computation of taxable turnover and no fact has been suppressed by the appellant from the respondent. The activity as well as payment of service tax were in the knowledge of the department, therefore, in the absence of any malafides on the part of the appellant, extended period of limitation is not invokable - any demand pertaining to extended period of limitation is set aside. Whether the penalty can be imposed on the appellant or not? - HELD THAT - As extended period of limitation is not invokable, therefore, no penalty is imposable on the appellant. Appeal disposed off.

Issues Involved:
1. Whether the excess recovery of the service tax can be recovered under Section 73 of the Finance Act, 1994 or Section 73-A of the Finance Act, 1994?
2. Which figures are to be taken for computation of demand of service tax, (a) Form 26-AS or (b) Balance Sheet?
3. Whether extended period of limitation is invokable in the facts and circumstances of the case or not?
4. Whether the penalty can be imposed on the appellant or not?

Issue-wise Detailed Analysis:

Issue No. (i):
The adjudicating authority allowed abatement of 60% of the total turnover being works contract and extended the benefit of Notification No. 30/2012-ST dated 20.06.2012 in certain cases. The appellant collected the full tax from the service recipients instead of 50% and paid only 50% of the tax. The issue was whether this excess amount could be recovered under Section 73 or Section 73-A of the Finance Act, 1994. According to the provisions, any excess amount collected should be recovered under Section 73-A of the Act. The adjudicating authority did not invoke Section 73-A, and since this finding was not challenged by either side, the demand under Section 73 was not sustainable. Therefore, the confirmation of the excess amount recovered by the appellant cannot be demanded under Section 73 of the Act.

Issue No. (ii):
The adjudicating authority chose the higher figures from either Form 26-AS or the Balance Sheets for computing the service tax demand. However, the balance sheets, certified by a Chartered Accountant, were considered more authentic for recording all transactions. Therefore, the service tax demand should be computed based on the figures from the balance sheets. The impugned order regarding computation needs re-examination by the adjudicating authority based on balance sheet figures.

Issue No. (iii):
The extended period of limitation is not invokable in this case as it involves the benefit of Notification No. 30/2012-ST dated 20.06.2012 and the computation of taxable turnover. There was no suppression of facts by the appellant, and the department was aware of the activities and payment of service tax. In the absence of any malafides, the extended period of limitation cannot be invoked. Therefore, any demand pertaining to the extended period of limitation is set aside.

Issue No. (iv):
As the extended period of limitation is not invokable, no penalty is imposable on the appellant.

Conclusion:
a) The excess recovery of service tax can only be demanded under Section 73-A of the Act, which was not done by the adjudicating authority; therefore, the demand cannot be confirmed under Section 73 of the Act.
b) The figures from the balance sheets are more authentic for computation; hence, the computation of demand of service tax should be done as per balance sheet figures.
c) The extended period of limitation is not invokable.
d) No penalty is imposable on the appellant.

In view of the above observations, the appeal is disposed of. (Order pronounced in the court on 26.08.2021)

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