2012 (8) TMI 653 - AT - Service Tax

Waiver of pre-deposit - Demand of service tax before the show-cause notice was issued for initiating proceedings, appellant paid amount of with interest Dispute has arisen because of the appellant does not have the record to show that they had actually made the payment - Held that - Even if the assessee does not have an evidence of payment of service tax, if the returns have been filed for the period involved, the department could have verify from the copies of the returns that any payment has been made or not. A copy of the challan also goes to PAO of the department who maintain accounts of payment by various assessees. It is possible to verify the details are available with the PAO. This effort could have been made before issue of show-cause notice and initiating proceedings when the assessee is making a claim that they have paid the amounts.

Summary

Issues:
1. Liability of service tax on commission received from EPFO and ESIC.
2. Payment of service tax from 10.09.2004 to 31.03.2007.
3. Destruction of documents due to floods affecting the evidence of payment.
4. Prima facie case for waiver of pre-deposit and grant of stay.
5. Observations on the verification process by the department regarding payment of service tax.

Analysis:

1. The proceedings were initiated based on the non-payment of service tax by the State Bank of India on the commission received from EPFO and ESIC during the period from 10.09.2004 to 31.03.2007. The appellant contended that they had paid a significant amount out of the total due, and the dispute primarily revolved around the lack of evidence for payments made during September 2004 to July 2005 due to the destruction of documents caused by floods in Surat.

2. The appellant had paid a substantial amount and claimed to have paid the balance as well, but lacked evidence due to the loss of documents in the flood. Considering this, the tribunal found that the appellant had established a strong prima facie case for waiver of pre-deposit and granted a stay against the recovery of the service tax demanded with interest and penalty during the pendency of the appeal.

3. The issue of the destruction of documents affecting the evidence of payment due to floods was crucial in the tribunal's decision to grant the waiver of pre-deposit and stay against recovery. The appellant's submission of a certificate from the Chief Manager of the Bank certifying the payment of service tax for the period from September 2004 to July 2005 further supported their claim.

4. The tribunal emphasized the importance of the department's verification process regarding the payment of service tax. It was noted that even in the absence of direct evidence, if the returns had been filed for the period in question, the department could have verified the payments from the copies of the returns and challans maintained by the PAO of the department. This observation highlighted the need for thorough verification before initiating proceedings based solely on the lack of evidence presented by the assessee.

In conclusion, the judgment addressed the liability of service tax, the impact of the destruction of documents on the evidence of payment, the waiver of pre-deposit and grant of stay, and the importance of thorough verification processes by the department to avoid unnecessary disputes and proceedings.