2018 (9) TMI 1509 - AT - Service Tax

Courier Service - demand raised on the basis of difference between the value declared in ST-3 Returns and Bank Statements with imposing equal penalty - Case of appellant is that out of confirmed demand of ₹ 1,79,799/- the appellant had paid service tax of ₹ 1,03,987/- along with interest due thereon - Held that - There was no need for issue of show cause notice in respect of service tax of ₹ 1,03,987. Therefore, the penalty equivalent to the said amount is not sustainable. Further the demand of ₹ 75,812/- is set aside and matter is remanded to Original Authority with direction to verify the Invoices which the appellant is claiming for admissibility of Cenvat credit and on verification of said documents and any additional evidences decide the matter related to demand of ₹ 75,812/- afresh. The appeal is partially allowed and partially remanded.

Summary

Issues:
1. Appeal against Order-in-Appeal No.390/ST/ALLD/2017 dated 17/11/2017 passed by Commissioner (Appeals), CGST & Central Excise, Allahabad.

Analysis:
The appellant, engaged in providing 'Courier Service,' faced a service tax demand of ?4,04,433 due to discrepancies between the value declared in ST-3 Returns and Bank Statements. The Original Authority confirmed a service tax liability of ?1,79,799 and imposed an equal penalty, dropping the demand of ?2,24,634. The appellant appealed this decision, which was rejected by the Commissioner (Appeals), leading to the current Tribunal appeal.

The appellant argued that they had already paid ?1,03,987 of the confirmed demand along with interest before the show cause notice was issued, thus contesting the need for such notice as per Section 73(3) of the Finance Act, 1994. Additionally, they claimed they possessed Cenvatable Invoices for the remaining amount of ?75,812, which was not utilized due to an employee's error.

On the other hand, the Revenue's representative supported the impugned order, highlighting the absence of document submission before the Authorities by the appellant.

After hearing both parties and examining the records, the Tribunal found that no show cause notice was necessary for the already paid amount of ?1,03,987, rendering the penalty on this portion unsustainable. The demand of ?75,812 was set aside, and the matter was remanded to the Original Authority for verification of the Invoices supporting the Cenvat credit claim. The Original Authority was directed to reevaluate the ?75,812 demand based on the verified documents and any additional evidence presented.

Consequently, the Tribunal partially allowed the appeal, partially remanding the case for further review and decision by the Original Authority.