2009 (10) TMI 482 - AT - Service Tax

Photography Services - the appellant is a photographer and doing photography service. During the period April 2002 to March 2005 the appellant had filed 3 Service Tax Returns and paid service tax amounting to Rs. 4,089/- on the taxable value amounting to Rs. 64,884/-. It was noticed that as per the Income Tax Returns, the total receipt was shown as Rs. 6,40,995/- on account of services rendered during the period from April 2002 to March 2005 and accordingly it was hold that the appellant had suppressed the value amounting to Rs. 5,76,111/- for the said period. Accordingly, service tax demand of Rs. 50,815/- was raised against the appellant. Held that - The adjudicating authority has not examined the Account Books and the Sale Invoice of the appellant while passing the impugned order and as per the impugned order it is totally based on the information gathered from the Income Tax authorities as per the Income Tax Returns filed by the appellant. Thus remand back the matter.

Issues:
1. Application for stay of demand and appeal submission.
2. Alleged suppression of taxable value leading to service tax demand.
3. Imposition of penalties under various sections of the Finance Act, 1994.
4. Examination of Profit and Loss Account and need for scrutiny of Account Books and Sale Invoice.
5. Decision on the appeal by way of remand.

Issue 1 - Application for Stay of Demand and Appeal Submission:
The appellant filed an appeal along with an application for stay of demand citing financial hardship and inability to travel to Mumbai for hearings. The appellant requested that the application for stay and the appeal be decided based on the submissions made in the appeal memo.

Issue 2 - Alleged Suppression of Taxable Value Leading to Service Tax Demand:
The appellant, a photographer providing photography services, had filed Service Tax Returns and paid tax based on a certain taxable value. However, discrepancies were noted in the total receipts declared in Income Tax Returns, indicating a suppression of value. Consequently, a service tax demand of Rs. 50,815/- was raised against the appellant, along with penalties under Sections 75, 76, 77, and 78 of the Finance Act, 1994. The appellant challenged this demand and penalties.

Issue 3 - Imposition of Penalties under Various Sections of the Finance Act, 1994:
The appellant was aggrieved by the imposition of penalties under Sections 75, 76, 77, and 78 of the Finance Act, 1994. The penalties included a daily penalty under Section 76, a penalty under Section 77, and penalties imposed along with the service tax demand. The appellant contested these penalties as part of the appeal.

Issue 4 - Examination of Profit and Loss Account and Need for Scrutiny of Account Books and Sale Invoice:
Upon examination of the Profit and Loss Account attached with the appeal memo, discrepancies were found between the total receipts declared and the information obtained from Income Tax authorities. The adjudicating authority had not scrutinized the Account Books and Sale Invoice of the appellant, relying solely on Income Tax Returns. The appellate tribunal deemed it necessary for the adjudicating authority to examine the books of accounts and sale invoice to make a well-informed decision.

Issue 5 - Decision on the Appeal by Way of Remand:
After considering the arguments and examining the records, the appellate tribunal granted a waiver of pre-deposit of the entire demand and decided to remand the case back to the adjudicating authority. The tribunal instructed the authority to scrutinize the appellant's books of accounts and sale invoice during the impugned period and pass an appropriate order based on the findings. The appeal was allowed by way of remand, indicating a decision to send the case back for further review and decision-making.

This detailed analysis of the judgment provides insights into the issues raised, the arguments presented, and the tribunal's decision to remand the case for further examination and decision.

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