2024 (8) TMI 851 - AT - Service Tax

Failure to discharge correct service tax liability, by suppressing the gross value, not declared in the statutory ST-3 returns - recovery of service tax with penalty - invocation of extended period of limitation - HELD THAT - There is no dispute as regards the chargeability of the service tax on the services provided by the appellant to the recepients and neither side is disputing the same. However, what is being disputed, apart from the limitation aspect, is that the liability pointed out by the Department has already been met by the appellant when they filed the service tax return on 03.12.2021, wherein, they have already availed and utilised the credit admissible to them. It is further found that though it is an admitted position that the ST-3 returns have been filed, it is not clear whether any dispute has been raised by the Department against such filed ST-3 returns or any separate action has been initiated for denying the benefit of credit claimed in the said ST-3 returns by the appellant. Further, the Commissioner (Appeals) has decided the issue of non-entitlement of credit in a rather cryptic manner by merely reiterating the grounds taken by the Original Adjudicating Authority. It is observed that in his findings, the Commissioner (Appeals) has not effectively addressed the issues raised by the appellant in support of their being eligible for credit. Various grounds for denying the credit has to be evaluated in the backdrop of the factual matrix and various case laws relied upon by the appellant. Therefore, in the interest of justice, the matter needs to be remanded back to the Commissioner (Appeals) to evaluate all the evidences and case laws adduced by the appellant and after hearing the same, he should decide whether they are entitled for such credit as claimed and availed by them or otherwise. Time limitation - HELD THAT - The matter needs to be re - examined in the light of evidences on record and certain evidences as argued by the Learned Advocate i.e screen shots of their having tried to file ST-3 returns during the relevant time, correspondence with the Department in this regard etc., may have to be taken into consideration. Appeal is disposed off by way of remand to the Commissioner (Appeals).

Summary

Issues:
Appeal against order upholding non-declaration of service tax liability and denial of Cenvat Credit.

Analysis:
The appellant, a news channel company, appealed against the Order-in-Appeal upholding the non-declaration of service tax liability amounting to Rs. 13,63,591/- for the financial years 2016-17 and 2017-18. The issue arose due to the suppression of gross value in statutory ST-3 returns, leading to a show cause notice for recovery. The appellant argued that they had sufficient credit balance to discharge the liability and cited case laws to support their stance on Cenvat Credit denial due to non-filing of returns. They contended that they rectified the non-filing promptly upon realization. The Adjudicating Authority, however, rejected this defense, leading to the appeal.

The appellant's defense primarily focused on challenging the invocation of the extended period and asserting that they had rectified the non-filing issue promptly upon discovery. They argued that they had filed the service tax returns and discharged the duty liability using available Cenvat Credit, which was duly recorded in their books. The appellant maintained that the liability was already met through filing returns for the relevant years and utilizing the available credit. The appellant's advocate emphasized technical errors in filing returns promptly rectified upon becoming aware of the liability difference.

On the contrary, the Authorized Representative supported the Commissioner (Appeals)'s decision to deny credit, stating that the grounds for denial were valid and unproven by the appellant. The AR highlighted the lack of evidence supporting the appellant's claim of attempting to file returns on time. The dispute revolved around whether the appellant had indeed filed the ST-3 returns during the material time and the timeliness of such filings.

After hearing both sides, the Tribunal found no dispute regarding the service tax chargeability but questioned the Department's insistence on the liability already met by the appellant through filed returns and utilized credit. The Tribunal noted that the Commissioner (Appeals) failed to adequately address the appellant's arguments for credit eligibility, necessitating a remand for a thorough evaluation. The matter was remanded to the Commissioner (Appeals) to re-examine all evidence and case laws presented by the appellant to determine credit entitlement. The Tribunal left the issues of credit eligibility and limitation open for further examination based on the evidence and arguments presented.

In conclusion, the Tribunal disposed of the appeal by remanding it to the Commissioner (Appeals) for a comprehensive review of the evidence and case laws to ascertain the appellant's entitlement to credit and address the issues of limitation. The decision emphasized the need for a detailed evaluation of all aspects before reaching a final determination.