2023 (12) TMI 1214 - AT - Service Tax

Non/short-payment of service tax - contention of the appellant was that it had neither issued the invoice nor had received the amount mentioned in the notice - principles of natural justice - HELD THAT - In view of the factual position as to whether the service tax paid by the consortium partner of the appellant was linked with the invoice issued by the consortium partner it would be in the fitness of things that the adjudicating authority examines this issue and it would be not appropriate to examine this issue in this appeal. Whether the service tax to the extent of Rs. 6, 42, 177/- has been paid on the excess income of Rs. 51, 95, 614/- by the service tax recipient namely M/s Bihar Urban Infrastructure Development Corporation Ltd.? - HELD THAT - In view of the nature of controversy that has arisen it would be appropriate if this issue is also again examined by the adjudicating authority after providing an opportunity to the appellant to submit relevant documents to establish the link between the invoice and the service tax paid by M/s Bihar Urban Infrastructure Development Corporation Ltd. Whether service tax was required to be paid on the amount of Rs. 31, 84, 835/- which amount was shown in the books of account as work-in-progress by the appellant? - HELD THAT - The Commissioner (Appeals) after having noted all the submissions recorded a finding that it was for the appellant to have shown by positive evidence that it had not received the amount as advance and since it could not substantiate this fact the demand had to be upheld - The Commissioner (Appeals) completely erred in recording this finding. It was for the Department to have established that the appellant had received the payment in that particular year more particularly when the contention of the appellant was that it had not received any payment and the amount was only shown as work-in-progress in the balance sheet. This demand which has been confirmed by the Commissioner (Appeals) therefore deserves to be set aside. The present appeal has to be allowed in part.

Summary

Issues involved:
The issues involved in the judgment are:
1. Non-payment of service tax on an invoice dated 10.11.2013.
2. Short payment of service tax as per reconciliation of balance sheet.
3. Non-payment of service tax on an amount shown as "work-in-progress" in the books of account.

Issue 1 - Non-payment of service tax on invoice dated 10.11.2013:
The appellant contended that the invoice in question was not issued by them, but by their consortium partner. The Commissioner (Appeals) noted discrepancies in the Service Tax Registration No. mentioned in the invoice and the actual registration of the appellant. The appellant submitted a challan indicating payment of the service tax amount, but the link to the specific invoice was not established. The matter was remanded to the adjudicating authority for further verification.

Issue 2 - Short payment of service tax per reconciliation:
The appellant claimed that service tax on excess income had been paid by the service tax recipient, M/s Bihar Urban Infrastructure Development Corporation Ltd. However, the Commissioner (Appeals) found a lack of evidence establishing the link between the invoice and the service tax paid. The issue was directed to be re-examined by the adjudicating authority.

Issue 3 - Non-payment of service tax on "work-in-progress" amount:
The appellant argued that as they had not received any advance payment in that year, service tax was not required on the amount shown as "work-in-progress." The Commissioner (Appeals) upheld the demand, stating the appellant failed to prove they had not received any advance. However, the appellant contended that it was the Department's burden to prove the receipt of payment, especially when the appellant claimed no payment was received. The demand under this issue was set aside.

In conclusion, the judgment partially allowed the appeal. The first issue was remanded for further consideration, the second issue was directed for re-examination, and the demand under the third issue was set aside. Penalties and interest imposed were also set aside for reevaluation by the adjudicating authority based on the findings of the first two issues.