2018 (6) TMI 590 - AT - Service Tax

Service Tax collected but not deposited to Government - benefit of N/N. 11/2010-ST dated 27/02/2010 as well as the succeeding notifications - Held that - The appellant is not liable to payment of Service Tax since the activity stands exempted by various notifications during disputed period. However, the Service Tax has been recovered by the appellant and hence the same is required to be deposited into the Government account. There appears to be confusion about the total amount of Service Tax recovered by the appellant and credited to the Government subsequently. The appellant also have paid under the wrong head which was not taken cognizance by the Adjudicating Authority. Matter remanded to the Adjudicating Authority for passing de novo orders - appeal allowed by way of remand.

Summary

Issues:
1. Applicability of exemption under Notification No. 11/2010-ST and subsequent notifications.
2. Incorrect remittance of Service Tax under the wrong tax head.
3. Discrepancy in the total amount of Service Tax collected.
4. Discrepancy in the amount of Service Tax confirmed by the Adjudicating Authority.
5. Allegation of non-consideration of additional tax payment by the appellant.
6. Comparison with a similar case where the matter was remanded back for detailed scrutiny.
7. Verification of the correct amount of Service Tax paid by the appellant.

Analysis:
1. The appellant, engaged in distributing electricity, was found collecting Service Tax but not depositing it to the Government, despite being entitled to exemption under Notification No. 11/2010-ST and succeeding notifications. The Department audited their accounts for the period 2006-07, 2012-13.

2. The appellant paid the Service Tax amount but remitted it under the wrong tax head. The Department issued a show cause notice proposing a higher service tax liability, leading to a dispute over the correct amount owed.

3. The Adjudicating Authority confirmed a demand for a higher amount than initially calculated by the Jurisdictional Officer, resulting in the appellant filing an appeal against the decision.

4. The appellant, through their counsel, argued that after further scrutiny, they found the total Service Tax collected during the disputed period to be different, leading to an additional payment that was not considered by the Adjudicating Authority in their order.

5. The appellant's counsel referenced a similar case where the Tribunal remanded the matter for a detailed decision, emphasizing the need for a comprehensive examination of the appellant's total tax liability during the material time.

6. After hearing both sides, the Tribunal found that the appellant was exempt from paying Service Tax during the disputed period but had collected it. There was confusion regarding the total amount collected and remitted, as well as the payment under the wrong tax head, which the Adjudicating Authority did not address.

7. Considering the discrepancies and the need for a detailed examination of the total tax liability and payments made by the appellant, the Tribunal set aside the impugned order and remanded the matter back to the Adjudicating Authority for a thorough scrutiny and a fresh decision.