2024 (3) TMI 984 - AT - Service Tax

Short payment of service tax - Works Contract Service - composition scheme - cost of materials was not taken into account for payment of the service tax, which is primary condition of works contract - HELD THAT - In view of the reasoning noted by the Adjudicating Authority that there is a standard practice that the Departmental Audit is conducted for a specified period, which has been clearly mentioned in IAR as April, 2006 to September, 2009 in Col.-9 in Part-I and the appellant has not shown anything that the period specified was extended by the proper officer, there is no merit in the submission of the learned Counsel that IAR No.07/2010 dated 20.04.2010 covered the period from October December, 2009. It is found from the order of the Adjudicating Authority that the appellant though had the opportunity to substantiate their claim and present documentary evidence in their support, however, they have only presented IAR No.07/2010, which is based on the documents produced by the appellant but the short payment of service tax was calculated only for the period under audit, i.e. April, 2006 to September, 2009 as per serial no.9 of IAR No.07/2010. In absence of any documents placed by the appellant, both the Adjudicating Authority and the Appellate Authority have not found favour with the appellant and hence, confirmed the demand. In the interest of justice that the appellant may be granted an opportunity to place on record the requisite documents, as mentioned above before the Adjudicating Authority as the stand taken by the appellant is that the bills of VAT/Sales Tax on materials used in the Works Contract Service have already been provided by the appellant to the Superintendent, Service Tax. From the records of the case, it is found that the ST-3 Returns were filed by the appellant on 24.04.2010 for the period October, 2009 to March, 2010 and the Audit Report No.1192/2010 was dispatched to them on 3.5.2011. Subsequently, the jurisdictional Range Officer sent letters dated 18.05.2011, 13.06.2011, 25.04.2012, 27.04.2012 and 08.01.2013 calling upon them to submit information and documents etc. However, the appellant, after two years of filing the periodical ST-3 Returns submitted that the value of the taxable services in the said returns has been wrongly given. The submission of the appellant was found to be noncorroborative without any documentary evidence and was found to be of no merit. On this aspect also, the learned Counsel for the appellant was required to substantiate his case with the supporting documents, which he failed to do so. The reliance placed by the appellant on the earlier Audit has been found to be distinguishable by the Adjudicating Authority as according to it, the preceding Audit team must have prepared the audit on the basis of the information presented by the assessee themselves. All these facts and submissions can be made by the appellant before the Adjudicating Authority once again along with the necessary and corroborative documents in that regard. It would be just and fair that the matter is remanded before the Adjudicating Authority, granting liberty to the appellant as well as to the Department to place on record the documents and the Adjudicating Authority may consider the same on merits - appeal is allowed by way of remand.

Summary

Issues involved:
Challenge to Order-in-Appeal confirming demand towards service tax u/s 65(39a) and 65(105)(zzzza) of the Finance Act, 1994.
Details of the judgment:
The appellant, providing 'Erection, Commissioning and Installation Services' and 'Works Contract Service', was found to have short paid service tax. The Adjudicating Authority confirmed the demand, imposed penalties, and ordered appropriation of tax and interest. The Commissioner (Appeals) upheld the decision, leading to the current appeal.
The appellant argued that a previous audit covered the period in question, but the Tribunal rejected this, stating that the specified audit period was not extended. The appellant failed to provide sufficient evidence to support their case.
Regarding the classification of services, the appellant did not produce necessary invoices and evidence to prove compliance with the composition scheme for Works Contract Service. The Adjudicating Authority found the appellant failed to show that VAT/Sales Tax was paid on materials used, leading to the service being classified under 'Erection, Commissioning and Installation Services' attracting higher tax.
The appellant also claimed the demand was time-barred, citing a previous audit report. However, the Tribunal found their submission lacking in evidence and upheld the issuance of the show cause notice. The matter was remanded to the Adjudicating Authority for further consideration based on additional documents.