2018 (11) TMI 526 - AT - Service Tax

Demand of Service Tax - the amount of consideration received by the appellant during the aforementioned period was computed on the basis of information received from the service recipient and the information received from complainant - principles of natural justice. Held that - The computation of consideration received by the appellant was on the basis of certain figures which were adopted by revenue such as for the year 2008-09 which was not reflected in any of documents whereas the said amount has been adopted from the figures submitted by the complainant which was not accompanied by any documentary evidence. Further, the amount of service tax deposited was not taken into consideration against the tax due on the appellant. Matter remanded to the Original adjudicating authority after setting aside the impugned order for fresh adjudication preferably within a period of 3 months from today - appeal allowed by way of remand.

Summary

Issues:
Appeal arising from Order-in-Appeal passed by Commissioner of Central Excise (Appeals), Meerut regarding service tax demand, interest, and penalties. Contention on erroneous computation of consideration, non-consideration of service tax paid during investigation, and contestation on limitation. Appeal allowed by Commissioner (Appeals) partly, leading to the current appeal before the Tribunal.

Analysis:
The case involved an appeal arising from an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Meerut, concerning a service tax demand, interest, and penalties. The appellants, registered as service providers under the Finance Act, 1994, had not filed returns since 2004. Investigations were initiated based on complaints received, leading to the computation of the amount of consideration received by the appellants for the period from 2008-09 to 2012-13. A show cause notice was issued to the appellants, raising a demand for service tax. The appellants contested the notice, arguing that the computation of consideration was erroneous and that the amount of service tax paid during the investigation was not considered. The Original Authority confirmed the demand, interest, and penalties, leading to an appeal before the Commissioner (Appeals).

The Commissioner (Appeals) allowed the appellants to file an affidavit regarding two bank accounts and granted SSI Exemption for the year 2011-12 but upheld the remaining part of the Order-in-Original. The appellants, aggrieved by this decision, approached the Tribunal. During the hearing, the appellant's counsel argued that the figures computed for the financial year 2008-09 were not supported by any documents and were based on a complaint. It was contended that the service tax amount paid during the investigation should be considered. On the other hand, the revenue's representative supported the impugned Order-in-Appeal.

After considering the submissions, the Tribunal found that the computation of consideration was based on figures not supported by documentary evidence and that the service tax paid by the appellant was not taken into account. Consequently, the matter was remanded back to the Original Authority with directions to adopt only figures supported by documentary evidence for consideration received and not to demand the service tax deposited during the investigation again. The appellants were directed to make submissions within four weeks, and the Original Adjudicating authority was instructed to re-adjudicate the matter within three months.

In conclusion, the Tribunal allowed the appeal by way of remand, setting aside the impugned order and providing clear directions for the re-adjudication of the case by the Original Authority.