2017 (9) TMI 1437 - AT - Service Tax

Non-payment of tax - It is the case of the Revenue that the appellant collected the Service Tax from the customers, but failed to deposit the same with the department - overlapping of amount - Held that - Apparently, it is seen that the period of dispute in the second appeal is covered in the first appeal. Further, the appellant requested for re-quantification of the demand as per reconciliation statement - the appellant should be given an opportunity to place the reconciliation statement in the interest of justice - appeal allowed by way of remand.

Summary

Issues:
1. Confirmation of Service Tax demand along with penalty
2. Failure to deposit collected Service Tax
3. Dispute over the correct amount of Service Tax payable
4. Overlapping demands in multiple appeals
5. Request for re-quantification of demand
6. Imposition of penalty

Confirmation of Service Tax Demand along with Penalty:
The Appellate Tribunal confirmed a Service Tax demand of ?4,02,68,931 along with interest and a penalty under Section 78 of the Finance Act, 1994. Additionally, a penalty of ?1,000 under Section 77 of the Act was imposed on the Appellant.

Failure to Deposit Collected Service Tax:
The Revenue alleged that the Appellant collected Service Tax from customers but failed to deposit it with the department. The discrepancy was discovered by comparing the Sub-Ledger Register (SLR) and Trial Balance maintained by the Appellant. A portion of the demand had not been paid through TR-6 Challans but was claimed to have been transferred through book transfer to the Head Office, which then paid the excise department.

Dispute over Correct Amount of Service Tax Payable:
The Appellant contended that the actual tax payable was ?1,29,67,000 only, contrary to the amount claimed by the department. They argued that the reconciled records showed a much lesser amount payable than what was demanded.

Overlapping Demands in Multiple Appeals:
There was an overlap in demands between different appeals, with one appeal relating to the period of 2005-06. The claim of the Appellant regarding a lesser amount payable was raised for the first time before the Tribunal, not in the original appeal grounds. However, a liability of ?3.05 Crores was admitted before the Commissioner in an earlier appeal.

Request for Re-Quantification of Demand:
The Appellant requested re-quantification of the demand based on a reconciliation statement. The Tribunal decided to allow the Appellant to present the reconciliation statement for a fair assessment of the amount payable.

Imposition of Penalty:
The Tribunal remanded the matter to the Adjudicating Authority for a fresh look at the imposition of penalty. The Appellant's appeal was allowed by way of remand, with a directive for a reasonable opportunity of hearing to be granted. The Adjudicating Authority was instructed to decide the matter within three months from the date of receipt of the order.