2018 (7) TMI 437 - AT - Service Tax

Penalty - failure to pay service tax - Airport Services as well as various other services - Service tax with interest and penalty was paid before issuance of SCN - Held that - It is not in dispute that the entire amount of Service Tax for the disputed period stands paid by the assessee along with the full interest liability, even before the issue of Show Cause Notice - penalty not warranted. Business support services - commission allegedly received by the assessee on top of electricity charges recovered from the concessionaire - Held that - No documentary evidence stands submitted regarding the claim that no service charge has been recovered during the period 2012-13. However, an affidavit stands filed by the authorized signatory of Airport Authority of India to the effect that no such service charges have been recovered - matter remanded to the adjudicating authority for a de-novo decision on the subject. Appeal allowed by way of remand.

Summary

Issues:
1. Challenge to Order in Original dated 27.02.2015
2. Service Tax liability for the period 2008-09 to 2011-12
3. Show Cause Notice for the period 2012-13
4. Imposition of penalties under various Sections of the Finance Act
5. Demand upheld on service charges collected on electricity bills
6. Best Judgment assessment under Section 72 for the demand

Analysis:

1. The judgment concerns the challenge to Order in Original dated 27.02.2015, where the appellant, a service provider registered with the Service Tax Commissionerate, Delhi, underwent a special audit for the period 2008-09 to 2011-12. Following the audit, a Show Cause Notice was issued alleging non-payment of Service Tax under various categories. The appellant admitted the liability and paid the differential Service Tax and interest. The adjudicating authority confirmed the tax liability but refrained from imposing penalties proposed in the Show Cause Notice. The Revenue appealed, arguing for the imposition of penalties due to alleged suppression.

2. The Tribunal considered the appeal and noted that the entire Service Tax amount for the disputed period had been paid by the appellant before the Show Cause Notice was issued. Relying on a previous decision, the Tribunal held that penalties could not be imposed when the tax liability and interest were already discharged before the notice. The Tribunal dismissed the Revenue's appeal based on this reasoning.

3. Regarding the Show Cause Notice for the period 2012-13, the appellant contested the demand upheld on service charges collected on electricity bills. The appellant argued that they had ceased collecting these charges post-special audit period. The Revenue contended that the demand was based on best judgment assessment under Section 72 due to lack of cooperation from the appellant in providing relevant documents. The Tribunal found discrepancies in the evidence presented and remanded the matter to the adjudicating authority for a fresh decision based on proper documentation.

4. In conclusion, the Tribunal rejected the Revenue's appeal seeking penalties and allowed the appellant's appeal for a remand on the demand related to service charges. The judgment highlighted the importance of timely payment of taxes and the need for proper documentation to support claims during tax assessments.