2010 (2) TMI 517 - AT - Service Tax

Demand based upon the audit report of the services done by the authorities - Adjudicating Authority has not considered the plea regarding the Service Tax liability only on the amount received by the appellants from their customers and not on the amounts which are indicated in the Balance Sheet Held that - set aside the impugned order and remand the matter back to the Adjudicating Authority to reconsider the issue afresh after following the principles of Natural justice.

Summary

Issues involved:
Service Tax liability on telephone services, telex services, telegram services, and leased circuits services.

Analysis:
The appeal was filed against Order-in-Original No. 02/2007-ST, where the Adjudicating Authority found the appellants liable to pay Service Tax, interest, and penalty. The issue revolved around the Service Tax liability on various services provided by the appellants, including telephone services, telex services, telegram services, and leased circuits services. The Revenue authorities contended that these services were subject to Service Tax, leading to the issuance of a show-cause notice and subsequent adjudication order. The appellants argued that the lower authorities failed to consider their submissions, decisions of the Tribunal in their own case, letters to authorities seeking exemption from Service Tax, and a relevant CBEC Circular.

Upon review, the Tribunal noted that the Adjudicating Authority based the demand on an audit report without considering the Tribunal's decision in the appellants' previous case. The Tribunal suggested that if the earlier decision was taken into account, the appellants might receive some relief from the demands. Additionally, the Adjudicating Authority did not address the plea regarding Service Tax liability only on amounts received from customers, not those indicated in the Balance Sheet. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for a fresh consideration, emphasizing the importance of following principles of Natural justice. The appellants were granted the opportunity to present the evidence they relied upon during the appeal process. The appeal was allowed by remanding it to the Adjudicating Authority for further review.