2021 (9) TMI 286 - AT - Service Tax

Non-payment of service tax - Event Management Service - necessary documents to claim input tax credit not produced, is available now - registration for the service taken or not - demand of tax with interest and penalty of 25% if dues paid within 30 days - HELD THAT - It is noted that from verification of invoices, bank statements, it is revealed that the appellant has not included all the considerations collected from the client in the taxable value for the purposes of payment of service tax. On such score, there are no grounds to interfere with the liability to discharge service for the impugned period. The appellant has put forward the contention that they were not able to produce necessary documents at the time of adjudication so as to claim the input tax credit. It is submitted by her that they now have the documents for the year 2010-11 - the matter can be remanded for the limited purpose of looking into the claim of the appellant with regard to input tax credit for the period 2010-2011 The demand for the period upto 2009-2010 is upheld - the demand confirmed for the period after 1.4.2010 till 20.08.2011 is remanded to the adjudicating authority who shall re-determine the liability after taking into consideration the claim of the appellant with regard to input tax credit. So also, the benefit of imposing lesser penalty as per proviso to Section 28 (1) of Finance Act, 1994 can be extended to the appellant, if eligible - Appeal disposed off in part and part appeal remanded.

Summary

Issues:
1. Failure to discharge service tax on event management services.
2. Imposition of penalties under various sections of the Finance Act, 1994.
3. Dispute regarding registration and input tax credit.
4. Adjudication of liability for service tax and penalties.

Analysis:
1. The case involved the appellant providing event management services without discharging the corresponding service tax, despite collecting it from customers. The original authority confirmed the demand for service tax, interest, and penalties, including a reduced penalty option if dues were paid promptly. Additionally, a penalty was imposed for contravening registration and filing rules under the Finance Act, 1994.

2. The appellant argued financial difficulties as the reason for non-payment of service tax and requested a chance to claim input tax credit with newly available documents. The respondent supported the original order, highlighting the appellant's failure to register for event management services and produce necessary documents for input tax credit.

3. The liability to pay service tax on event management services and the collection of service tax from customers were not disputed by the appellant. However, discrepancies in including all considerations collected in the taxable value for service tax payment were noted. The appellant's request for a remand to claim input tax credit for a specific period was considered, with the possibility of reduced penalties under a proviso introduced in 2011.

4. The judgment upheld the demand for service tax until 2009-2010 but remanded the case for re-determination of liability for the period after April 1, 2010, considering the appellant's input tax credit claim. The adjudicating authority was tasked with reassessing the penalties based on the appellant's documentation, potentially leading to a lesser penalty under the Finance Act, 1994. The appeal was partly remanded and partly disposed of accordingly.