2015 (2) TMI 193 - AT - Service Tax

Banking & Financial Service - issuance of wrong registration certificate ST-2 as service provider instead of Input Service Distributor (ISD) - assessee contended that instead of owning the fault created by their official, blame has been put on appellant that the appellant has failed to register as ISD leading to issue of demand for service tax and imposition of penalty without any fault of their. - Held that - Commissioner (Appeals) has not appreciated these facts and has confirmed the demand against Punjab National Bank Ghaziabad and have upheld imposition of equal penalty. I find that appellant have been able to make a point that Commissioner (Appeals) has failed to appreciate all evidences available on records. - it is a fit case for remand back to original Adjudicating Authority for reconsideration of grounds and evidence of records. Adjudicating authority is directed to call all records and peruse those in denovo adjudication. - Decided in favour of assessee.

Summary

Issues:
1. Appeal against demand and penalty upheld by Commissioner (Appeals)
2. Allegation of failure to fulfill conditions for Input Service Distributor (ISD) registration
3. Issuance of incorrect ST-2 certificate by department
4. Rejection of Cenvat Credit by Commissioner (Appeals)
5. Department's contention on non-compliance with ISD procedure
6. Discrepancy in registration process and certificate issuance
7. Failure of Commissioner (Appeals) to consider all evidence

Analysis:
The appellant challenged the Order-in-Appeal upholding a demand of Rs. 27,94,329 and penalty, contending that the Zonal office had fulfilled conditions for ISD registration but faced errors in the process. The Commissioner (Appeals) upheld the demand citing deficiencies in challans and non-compliance with Rule 4A of the Service Tax Rule. The appellant argued that the department wrongly issued an ST-2 instead of an ISD registration, shifting blame unfairly. The Counsel highlighted the unfairness of the department's actions and readiness to produce remaining challans if given the opportunity.

The Departmental representative supported the rejection of input credit, citing non-compliance with ISD procedure and lack of registration. However, the representative failed to address the appellant's claim of applying for ISD registration and faulting the Superintendent for issuing an incorrect certificate. The Tribunal found the Commissioner (Appeals) failed to consider crucial facts and evidence, leading to the confirmation of the demand and penalty against the appellant.

Upon review, the Tribunal concluded that the appellant was not at fault for the registration discrepancy, emphasizing the department's error in issuing the wrong certificate. As a result, the Tribunal remanded the matter back to the original Adjudicating Authority for a fresh consideration within three months, directing a thorough review of all evidence and records for a fair decision.