2018 (8) TMI 812 - AT - Service Tax

Business Auxiliary Service - it was alleged that they have not reflected the correct value of the service in their ST-3 returns filed by them during the financial year 2009-10 to 2013-14 - Held that - The dispute in the present appeal relates to the verification of the facts as to whether the commission which has accrued in one particular month was actually received by the assessee in a subsequent month/year/period. It might be that the payment which has been received by the appellant in one particular period was on account of the services belonging to the previous financial year. In such a scenario, the appellant s stand has to be verified correctly from their books of account and should be matched properly. Appeal allowed by way of remand.

Summary

Issues:
1. Request for adjournment due to change in advocate.
2. Allegation of incorrect value of services in ST-3 returns.
3. Discrepancy between commission accrual and actual receipt.
4. Verification of appellant's claim from their books of account.
5. Remand of the matter to Original Adjudicating Authority.

Analysis:
1. The judgment begins with the rejection of a request for adjournment by the appellant's new advocate due to the absence of the previous advocate's No Objection certificate, leading to the immediate decision on the appeal by Member (Judicial) Archana Wadhwa.

2. The appellant, engaged in Business Auxiliary Service as a commission agent, faced allegations of incorrect valuation in their ST-3 returns for the financial years 2009-10 to 2013-14, resulting in a demand notice of &8377; 4,22,756 along with penalties.

3. The appellant contended that their accounting was on a mercantile/accrual basis, explaining the discrepancy between commission accrual and actual receipt, which needed verification from their books of account to determine the correctness of their claim.

4. The Commissioner (Appeals) noted that Form 26 AS indicated payments received by the appellant, suggesting that the amounts reflected in it were actually received. However, the crucial issue remained whether the payments received pertained to the relevant financial year or not, necessitating a detailed examination of the appellant's records.

5. Member (Judicial) Wadhwa set aside the impugned order and remanded the matter to the Original Adjudicating Authority for a fresh decision after proper verification of the appellant's claim from their maintained records, emphasizing the need for accurate matching of the received payments with the accrued commissions. The issue of penal liability was left open for the appellant to address before the Original Adjudicating Authority.

6. Ultimately, the appeal was allowed by way of remand, highlighting the importance of thorough verification and matching of financial records to determine the accuracy of service valuations and payments received by the appellant.