2023 (7) TMI 54 - AT - Service Tax

Recovery of service tax including the interest and penalty amount - appeal was rejected observing that the plea taken by the appellant is not supported by the documentary evidence - failure to file any reply to the show cause notice - HELD THAT - It is found from the records of the case, that the appellant has miserably failed to contest the proceedings diligently in as much as he neither submitted the reply to the show cause notice nor attended the personal hearing either before the Adjudicating Authority or the Appellate Authority and have neither submitted the documents in support of pleas taken by him in the appeal before the Commissioner (Appeals). This being the case where the appellant has failed to co-operate with the Department by placing reliance on record the requisite documents, particularly the submissions on which he is relying, an opportunity should be given to him to place such documents before the Adjudicating Authority to consider the case in light thereof particularly for the reason that the period involved was during the Covid time. Accordingly, both the parties have agreed that it would be just and appropriate to remand the matter back to the Adjudicating Authority for denovo consideration. The ld. C.A. has pointed out several decisions of the Tribunal in M/S KUSH CONSTRUCTIONS VERSUS CGST NACIN, ZTI, KANPUR 2019 (5) TMI 1248 - CESTAT ALLAHABAD , CST, SERVICE TAX, DELHI VERSUS CONVERGYS INDIA SERVICE PVT. LTD. 2018 (1) TMI 1174 - CESTAT CHANDIGARH , COMMISSIONER OF C. EX., JAIPUR-I VERSUS TAHAL CONSULTING ENGINEERS LTD. 2017 (1) TMI 657 - CESTAT NEW DELHI on the merits of the matter that the Revenue cannot compare the figures reflected in ST-3 returns with those reflected in Form 26-AS filed as per the Income Tax Act, 1961 and the Department ought to have examined the reasons for said difference. The principle taken note of was that the Income Tax and Service Tax are two different/ separate and independent special Acts and their provisions operate in two different fields and therefore relying on Form 26-AS / TDS statement, demand of service tax cannot be made. The principle taken note of was that the Income Tax and Service Tax are two different/ separate and independent special Acts and their provisions operate in two different fields and therefore relying on Form 26-AS / TDS statement, demand of service tax cannot be made. The Adjudicating Authority after examining the documents as may be submitted by the parties, needs to take into account the decisions of this Tribunal also while deciding the matter afresh. The appeal is allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are non-compliance with document submission requests, failure to respond to show cause notice, imposition of service tax, interest, and penalty under specific provisions of the Finance Act, 1994, rejection of appeal due to lack of supporting evidence, and the need for remand for denovo consideration.

Non-compliance with document submission requests:
The appellant, engaged in erection, commissioning, and installation services, failed to submit all requested documents despite repeated reminders. The appellant only provided certain documents for a limited period and did not submit the remaining documents for the subsequent periods. This non-compliance led to the initiation of an enquiry and a show cause notice demanding service tax.

Failure to respond to show cause notice:
The appellant was issued a show cause notice to explain why service tax should not be demanded and recovered, along with interest and penalty under specific sections of the Finance Act, 1994. Despite the notice, the appellant did not file any reply or attend the personal hearing, resulting in the proceedings being conducted ex-parte.

Imposition of service tax, interest, and penalty:
The Adjudicating Authority proceeded ex-parte due to the appellant's failure to comply with requests and imposed the demand and recovery of service tax, interest, and penalty. The order highlighted the appellant's failure to provide necessary information or documents, rendering them liable for penal action under the Finance Act, 1994.

Rejection of appeal due to lack of supporting evidence:
The appellant challenged the Order-in-original in appeal before the Commissioner (Appeals) but failed to appear for the hearing, leading to the rejection of the appeal. The rejection was based on the lack of supporting documentary evidence for the appellant's plea, as observed by the Commissioner (Appeals).

Remand for denovo consideration:
Upon hearing both parties, the Tribunal decided to set aside the impugned order and allowed the appeal by way of remand. The decision was made to give the appellant an opportunity to submit the necessary documents before the Adjudicating Authority for fresh consideration, especially considering the challenges faced during the Covid period. The Tribunal emphasized the need for a thorough examination of documents and relevant Tribunal decisions in deciding the matter afresh.