2017 (10) TMI 854 - HC - Service Tax

Valuation - sub-contract - petitioner contested the demand and produced Challan to prove that the main Contractor had paid service on the value, which was inclusive of value of service rendered by the petitioner - Held that - Admittedly, the petitioner has not produced any document except the Challans evidencing payment of service tax by two Contractors. The adjudicating authority has rightly held that the Challans produced by the petitioner could not be taken into account for the purpose of establishing as to whether service tax in respect of the service rendered by the assessee to the above mentioned Contractors have been included in the payment made by them - The petitioner shall produce all the supporting documents before the Original Authority for decision afresh - appeal allowed by way of remand.

Summary

Issues:
Challenge to impugned order in original No.STC/6/2014-ADC (LTU) passed by the 1st respondent.
Rejection of appeal by Commissioner (Appeals) as time-barred.
Demand for payment of service tax, interest, and penalty.
Verification of service tax challans submitted by the petitioner.
Admissibility of documents in establishing payment of service tax by contractors.
Remittal of the matter for fresh consideration by the Original Authority.

Analysis:
The petitioner sought to quash the order passed by the 1st respondent demanding payment of service tax amounting to ?19,92,075. The petitioner, a registered service provider, contested the demand stating that the main contractor had already paid service tax inclusive of the petitioner's services. Despite submitting challans to prove this, the Additional Commissioner confirmed the demand and imposed a penalty equal to the tax amount. The petitioner's appeal to the Commissioner (Appeals) was rejected as time-barred, leading to a demand for immediate payment by the 2nd respondent.

The petitioner contended that challans submitted for two contractors evidenced service tax payment, but the authority questioned if the tax for services rendered by the petitioner was included in the contractors' payments. The Senior Central Government Standing Counsel argued that the petitioner failed to submit substantial evidence and missed the appeal deadline, thus should pay the determined amount. The Court noted the lack of documents beyond the challans and the need for further proof regarding service tax payment by the contractors for the petitioner's services.

After hearing both sides, the Court acknowledged the petitioner's commitment to provide additional documents and remitted the matter to the Original Authority for fresh consideration. The petitioner was instructed to present all supporting documents within 15 days for a detailed review by the Original Authority within one month of the petitioner's personal hearing. The Court disposed of the Writ Petition with this direction, emphasizing the importance of producing necessary evidence for a fair assessment.