2023 (9) TMI 872 - AT - Service Tax

Service tax collected but not deposited the same to the exchequer - Section 73A of FA - time limitation - HELD THAT - Ongoing through the provisions of Section 73A that sub-clause 2 is applicable in the instant case. To attract this clause, the noticee should have collected any amount, which is not required to be collected, in any manner as representing service tax - In the instant case, it is not the case of the Department that the appellants have issued invoices/ bills which indicate that service tax has been collected by the appellants from their customers. This fact is very much accepted by the learned Adjudicating Authority in the impugned order; the Certificate issued by M/s PACL indicates that the appellants have not charged any service tax to the customers. It is not clear from the case records whether the Department has challenged the certificate issued by M/s PACL. The allegation is sought to be established on the basis of loose calculation sheets. The facts of the case and the case records indicate that the appellants have not collected any amount representing as service tax from their customers i.e. M/s PACL. In addition to the above, there is a categorical certificate given by M/s PACL indicating that the appellants have not charged any service tax and have not paid any amount representing as service tax to the appellants - the impugned order cannot be sustained and is liable to be set aside. Time Limitation - HELD THAT - The appellants have a strong case on merits, the issue of time bar is of no consequence. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
The issues involved in the judgment are whether the provisions of Section 73A of the Finance Act, 1994 are attracted in the given circumstances, and whether the demand confirmed by the Commissioner is justified.

Issue 1: Application of Section 73A of the Finance Act, 1994
The case involved M/s Pearls Buildwell Infrastructure Limited, engaged in Construction Services related to road laying, where a show-cause notice was issued alleging non-deposit of service tax collected from customers. The Commissioner confirmed a demand, but the appellants contended that they did not charge any service tax to their customers. The Commissioner's findings were based on calculation sheets, ignoring a certificate from a customer confirming no service tax collection. The Tribunal found that the Department failed to prove the collection of service tax, as indicated by the certificate, and set aside the impugned order.

Issue 2: Limitation on Time Bar
The appellants argued that the issue was time-barred due to an audit in 2008 and the show-cause notice in 2010. However, the Tribunal, considering the strong merits of the case, deemed the time bar issue inconsequential. Consequently, the Party's Appeal was allowed, and the Department's Appeal was dismissed.

Separate Judgment by Judges:
The judgment was delivered by MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) on 19/09/2023.