2013 (2) TMI 486 - AT - Service Tax

Cargo Handling Services & Airport Services - short payment of Service tax for the period 16.08.2002 to 9.9.2004 and from 10.09.2004 and onwards respectively - CA for the appellant submits that they had submitted a reconciliation statement reconciling the difference in the figures reflected in the Service Tax-3 returns and in the Balance sheet as the Balance sheet is prepared on accrual basis whereas the liability to pay Service Tax is on cash basis therefore, they are bound to be difference between these two figures - Held that - The adjudicating authority has not rebutted the claims of the appellant after examining the figures furnished by them and the reconciliation statement submitted by them. Thus, the ground for rejection of the claim made by the appellant is flimsy. Nothing prevented the adjudicating authority to call for relevant records of the appellant and satisfy himself as to the correctness and accuracy of the figures submitted by the appellant, in case he had any reason to doubt the veracity of the appellant s claim. Therefore the matter has to go back to the adjudicating authority for consideration afresh by keeping in mind the fact that while the balance-sheet figures are on accrual basis, the liability to discharge Service Tax is on cash basis. The reconciliation statement provided by the appellant shall be examined carefully in detail and if need be by calling for the relevant records from which the figures have been taken - in favour of assessee by way of remand.

Summary

Issues:
1. Short payment of Service Tax by the appellant.
2. Discrepancy between figures in Service Tax returns and Balance sheet.
3. Exemption of consideration received in convertible foreign exchange.
4. Rejection of appellant's claims by the adjudicating authority.
5. Need for a fresh consideration of the matter by the adjudicating authority.

The judgment pertains to an appeal against an Order-in-original passed by the Commissioner of Central Excise, Thane-I, regarding the short payment of Service Tax by the appellant, M/s National Aviation Company of India Ltd. The appellant contended that the Balance sheet is prepared on an accrual basis, while the liability to pay Service Tax is on a cash basis, leading to differences in figures. The reconciliation statement submitted by the appellant explained these differences, highlighting that the Revenue did not request relevant documents to verify the figures. The appellant argued that they had paid Service Tax in excess of their liability due to consideration received in convertible foreign exchange being exempted before a certain date. The Revenue, however, supported the findings of the adjudicating authority.

The Tribunal observed that the adjudicating authority did not adequately address the appellant's claims despite the submission of a reconciliation statement. It was noted that the authority failed to verify the figures provided by the appellant or call for relevant records to ensure accuracy. Therefore, the matter was remanded back to the adjudicating authority for a fresh consideration, emphasizing the distinction between accrual and cash basis for Service Tax liability. The appellant was directed to cooperate with the department and provide necessary documents for verifying the proper payment of Service Tax.

In conclusion, the appeal was disposed of by way of remand, with the stay petition also being disposed of. The judgment highlighted the importance of a thorough examination of figures and reconciliation statements to ensure accurate assessment of Service Tax liability, underscoring the need for cooperation between the appellant and the department for a fair resolution of the matter.