2024 (3) TMI 1041 - AT - Service Tax

Liability of service tax on the alleged differential amount - It appeared to Revenue that Appellant have declared income of Rs.1,07,38,534/- in the income tax return for the financial year 2015 16 whereas they have declared gross receipt of Rs.50,27,482/- in their half yearly service tax return - whether the Commissioner (Appeals) have rightly set aside the Adjudication Order by which the Adjudicating Authority have dropped the proposal of service tax in the show cause notice? - HELD THAT - The grounds of appeal before the Commissioner (Appeals) raised by Revenue are wholly vague. No exact Rule is pointed out of the POPS Rules which have been violated - it is found that the allegation that the Adjudicating Authority did not examine the services provided to the other 3 foreign companies other than Mavensoft Technology as their names are not mentioned in the Adjudication Order in contrary to the finding of the Original Authority. The Commissioner (Appeals) have just raised some doubts and without any categorical adverse finding, have been pleased to set aside the Adjudication order. It is found that the impugned order is cryptic and nonspeaking. The impugned Order-in-Appeal is set aside - the Order-in-Original is restored - appeal allowed.

Summary

Issues involved:
The issue in this appeal is whether the Commissioner (Appeals) rightly set aside the Adjudication Order which dropped the proposal of service tax in the show cause notice.

Details of the judgment:

Issue 1: Adjudication Order and Revenue's Appeal:
The Adjudicating Authority dropped the proposal of service tax in the show cause notice after finding that the services provided by the assessee were exempted as export of service. The Revenue appealed before the Commissioner (Appeals) on grounds that the Adjudicating Authority did not examine the nature of service provided and did not verify agreements with other foreign companies. The Commissioner (Appeals) found that the Adjudicating Authority's decision was not sustainable as the actual service agreement was not presented, and services provided to other foreign companies were not considered.

Issue 2: Appellant's Contentions and Commissioner (Appeals) Decision:
The Appellant argued that the Adjudication Order was set aside without any error or impropriety, as they had no domestic turnover and all turnover was from export of services. They maintained that no adverse inference should be drawn for not mentioning the names of other clients. The Commissioner (Appeals) set aside the Adjudication Order based on doubts without any categorical adverse finding, deeming the order cryptic and nonspeaking.

Conclusion:
The Tribunal set aside the impugned Order-in-Appeal and restored the Order-in-Original, granting the Appellant consequential benefits. The judgment highlighted the importance of verifying agreements with foreign companies and providing clear reasoning in decisions related to service tax liability on exported services.