2024 (2) TMI 374 - HC - Service Tax

Demand against Retention of the service tax collected on behalf of the principal by the petitioner/assessee - business auxiliary service for the commissioner received by the appellant - HELD THAT - A perusal of the facts involved in the case would give a clear picture of the total amount of Rs.38,53,951/- towards service tax collected by the petitioner on behalf of the principal, of the said amount, an amount of Rs.20,15,629/- un-disputedly stands remitted by the appellant to the principal and there was a balance of amount of Rs.15,75,182/- which was not paid by the appellant to the principal and there is said to have been an illegal retention of the same - Inspite of that there is a finding by the Tribunal that the contention of the petitioner so far as the retention of the amount of Rs.15,75,182/- collected till 2014, seems to be per se contrary to the materials and documents available with the department. So also is contrary to the documents which the appellant herein had produced before the authorities concerned and had also contended even uptill the stage of the CESTAT which has not been properly appreciated by the same. Where admittedly an amount of Rs.20,156,29/- at the first instance itself was transferred by the appellant to the principal and the balance of Rs.15,75,182/- amount collected also having subsequently been deposited with the department directly establishes the fact that the entire service tax collected by the appellant herein to the tune of Rs.35,90,811/- stand paid either to the Principal or to department and as such there was no retention of the service tax collected by him beyond 23.07.2013. The said finding for the aforesaid reasons being unsustainable, deserves to be and is accordingly set aside. The demand raised for the payment of Rs.38,53,951/- stands set aside/quashed - Appeal closed.

Summary

Issues involved:
The issues involved in the judgment are the retention of service tax collected on behalf of the principal by the petitioner/assessee and the business auxiliary service for the commissioner received by the appellant.

Retention of Service Tax:
The appellant challenged the order passed by the Customs, Excise & Service Tax Appellate Tribunal, Regional Branch, Hyderabad, regarding the retention of service tax collected on behalf of the principal. The Tribunal found that the appellant had not remitted the service tax collected to the exchequer and had illegally retained an amount of Rs.15,75,182. However, the appellant provided a document showing that the disputed amount had been paid to the Department through a challan from Axis Bank in 2013. The Tribunal's finding was deemed unsustainable as the entire service tax collected by the appellant had been paid either to the Principal or to the department by 2013, thereby setting aside the demand of Rs.38,53,951.

Business Auxiliary Service:
Regarding the business auxiliary service for the commissioner received by the appellant, the appellate tribunal remitted the matter for adjudication. The proceedings related to this issue had been finalized, with the demand confirmed and subsequently challenged by the appellant in a separate appeal. The current appeal was confined to the retention of service tax collected by the petitioner for the principal. The Tribunal's finding on this issue was set aside due to the appellant having paid the disputed amount to the Department in 2013, leading to the quashing of the demand. Miscellaneous applications pending in this appeal were ordered to be closed with no costs imposed.