2015 (11) TMI 1181 - AT - Service Tax

Demand of service tax - Short payment of service tax - erection, commissioning or installation service - Service rendered through sub-contractors - Held that - Commissioner has not analysed the evidences e.g. the work order issued by the Assam State Electricity Board, the conditions of payment and the scope of the work undertaken by the appellant and the work executed through its sardars etc., the Ld. Advocate categorically claims that there have been no sub-contractors and the sardars appointed by them are virtually the employees of the appellant. Therefore, the amount paid/re-imbursed to the sardars need not suffer service tax even though it relates to erectioning, commissioning or installation services. It is also claimed that while discharging service tax on the gross taxable value received from Assam Electricity Board, they have also included the amount paid to the sardars/sub-contractors. This aspect needs to be scrutinized and verified through evidences. - Matter remanded back - Decided in favour of Revenue.

Issues:
1. Alleged non-payment/short payment of Service Tax during specific periods.
2. Dispute regarding liability for Service Tax on services rendered through sub-contractors.
3. Discrepancy in Service Tax payment for the year 2008-09.
4. Appeal against the dropped proceedings initiated by the Ld. Commissioner.

Issue 1: Alleged non-payment/short payment of Service Tax
The appeal involved a dispute concerning the alleged non-payment/short payment of Service Tax by the respondent for the periods 2006-07, 2007-08, and 2008-09. The Revenue contended that the respondent had not paid Service Tax amounting to Rs. 1,18,32,451 for 2006-07 and 2007-08 in relation to services provided to M/s. Assam Electricity Board. Additionally, a shortfall of Rs. 73,99,165 in Service Tax payment for 2008-09 was highlighted based on discrepancies between the Balance Sheet values and ST-3 Returns. The Ld. Commissioner had initially dropped the proceedings against the respondent, leading to the Revenue's appeal.

Issue 2: Liability for Service Tax on services rendered through sub-contractors
The Revenue argued that the respondent, as an installation and commissioning agency, was liable to discharge Service Tax for services provided through sub-contractors to M/s. Assam Electricity Board. They claimed that the respondent received payments for services but did not pay Service Tax on these amounts. In contrast, the respondent contended that the amounts received from the Board were disclosed in their ST-3 Returns, and Service Tax was appropriately discharged. The respondent's advocate asserted that the bills raised by sub-contractors were reflected in the gross taxable value declared in the returns, implying that no additional Service Tax was due on payments to the sub-contractors.

Issue 3: Discrepancy in Service Tax payment for the year 2008-09
The dispute extended to the alleged short payment of Service Tax for 2008-09, with the Revenue claiming that the amount mentioned in the Show Cause Notice was not received by the respondent during that year, hence no Service Tax was paid. The respondent's advocate reiterated that since the amount was not received as per the notice, no Service Tax was payable for that period. The Ld. Commissioner's order lacked detailed analysis of the evidence, prompting the need for further scrutiny regarding the inclusion of amounts paid to sub-contractors in the gross taxable value.

Issue 4: Appeal against dropped proceedings by the Ld. Commissioner
Upon hearing both sides and reviewing the records, the Tribunal found deficiencies in the Ld. Commissioner's analysis, particularly regarding the evidence related to sub-contractors and sardars appointed by the respondent. The Tribunal remanded the matter to the Ld. Commissioner for a fresh decision, emphasizing the necessity for detailed reasoning based on all available and additional evidence to be produced by the respondent during the adjudication process. Consequently, the appeal was allowed by way of remand for further examination and clarification.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's decision to remand the case for a more thorough review based on comprehensive evidence.

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