2024 (8) TMI 602 - AT - Service Tax

Recovery of service tax with interest and penalty - failure to discharge service tax liability on the differential value during the Financial Year 2015-16 and 2016-17 - extended period of limitation - HELD THAT - It is observed that the impugned order has been passed without any inputs from the appellant with regard to reconciliation of the figures provided by the Income Tax Authorities and ST-3 return. It is found that appellant have completely reconciled the differences between the information i.e. the proof of income and ST-3 return. However, as the reconciliation certificate was not produced before the Original Adjudicating Authority, it is deemed fit to remand the matter back to the Original Authority for reconsideration of the matter in the light of said certificate. Appeal is allowed by way of remand to the Original Authority.

Summary

Issues involved: Confirmation of service tax demand, imposition of interest and penalties, non-response to show cause notice, reconciliation of figures, failure to provide inputs during inquiry and personal hearings.

Detailed Analysis:
1. Confirmation of service tax demand, interest, and penalties:
The appellate tribunal was presented with an appeal against an Order-in-Original confirming a service tax demand of Rs. 2,87,29,604 for the period 2015-16 and 2016-17. The demand included interest and penalties under various sections of the Finance Act, 1994. The appellant, engaged in providing taxable services related to road construction and sight formation, had been issued a show cause notice based on third-party information indicating non-payment of service tax. The Commissioner upheld the demand, interest, and penalties due to the appellant's failure to pay service tax and suppression of facts to evade payment. The tribunal observed that the impugned order lacked inputs from the appellant regarding the reconciliation of figures provided by Income Tax Authorities and ST-3 return, leading to a remand for reconsideration by the Original Authority.

2. Non-response to show cause notice:
The appellant failed to respond to the show cause notice despite multiple opportunities for personal hearings. The Commissioner proceeded to make a decision based on available records and merit due to the appellant's non-participation in the proceedings. However, during the appeal, the appellant submitted a reconciliation certificate, reconciling the differences between income information and ST-3 return. The tribunal acknowledged the reconciliation but remanded the matter back to the Original Authority for reconsideration in light of the certificate, emphasizing the importance of active participation in the adjudication process.

3. Failure to provide inputs during inquiry and personal hearings:
The tribunal noted that the appellant did not provide any inputs during the inquiry and investigation preceding the show cause notice issuance. The lack of participation raised concerns about the fairness of the adjudication process. The tribunal highlighted the appellant's subsequent submission of a reconciliation certificate as a crucial piece of evidence that should have been presented earlier. This emphasized the importance of engaging proactively in the proceedings to ensure a fair and thorough consideration of all relevant information.

In conclusion, the appellate tribunal allowed the appeal by remanding the matter to the Original Authority for a fresh decision within three months. The detailed analysis of the issues involved underscores the significance of active participation, timely submission of relevant documents, and the need for a fair and transparent adjudication process in tax matters.