2018 (11) TMI 745 - AT - Service Tax

Business Auxiliary Service - Commission on Consignment Sale for the period 2007 to March 2012 - demand of service tax - Held that - Since the appellants have not collected any Service Tax from the person to whom the services were provided, Cum Tax benefit should be given while calculating the Service Tax liability under this category - Further, the Cenvat Credit on input services used for providing the aforesaid output service is also allowable. Renting of Immovable Property Service - Held that - The appellants have not collected Service Tax from the tenants and hence, Cum Duty Benefit has to be given while calculating the service tax liability under this category. Transport of Goods by Road Service under Reverse Charge - Held that - Some of the consignments are covered vide Notification No.34/2004-ST dated 03/12/2004 which grants full exemption in the following two situations - (i) Where the gross amount charged on all consignments transported in a goods carriage does not exceed ₹ 1500/- and (ii) Where the gross amount charged on individual consignment transported in a goods carriage does not exceed ₹ 750/-. After calculating the Service liability under all the above categories and complying with the observations made by the Bench in the foregoing paragraphs, the demand may be communicated to the appellant assessee. Further, the amount of ₹ 13,87,701/- as paid by the appellant assessee should be appropriated against the demand, so calculated. Penalty - Held that - As the issues involved interpretation of statutory provisions, and the fact that the payments have been made for the undisputed amount of Service Tax and the Department being aware of it, it is not a fit case for imposition of penalties. The appeal is remanded to the Adjudicating Authority for the limited purpose of Re-computation of the Service Tax liability under the various categories - appeal allowed by way of remand.

Summary

Issues: Appeal against demand of Service Tax, Cenvat Credit, penalties under Sections 77 and 78 of the Finance Act, 1994, interpretation of statutory provisions, remand for re-computation of Service Tax liability.

Analysis:
1. Demand of Service Tax: The appellant, a Partnership firm engaged in tailoring and dress making, was also involved in renting premises, receiving commission for consignment sales, and availing services of a Goods Transport Agency. The Adjudicating Authority confirmed a demand of &8377; 14,13,868/- along with interest and penalties. The Ld. Commissioner (Appeals) upheld this order, leading to the present appeal before the Tribunal.

2. Contentions of the Appellant: The appellant's advocate argued that the demand should be categorized under three different services. They claimed that the Show Cause Notice was issued solely based on balance sheet figures without scrutinizing relevant documents. The advocate contended that the Adjudicating Authority erred in not following relevant provisions related to cum-tax valuation and exemptions available to the appellant. Additionally, the appellant argued for the allowance of Cenvat Credit and disputed the invocation of the longer period for demand.

3. Tribunal's Findings: The Tribunal examined the demand under different categories of services, such as Business Auxiliary Service, Renting of Immovable Property Service, and Transport of Goods by Road Service under Reverse Charge. It noted that the appellant had not collected Service Tax from the recipients, warranting Cum Tax benefit in calculating the liability. The Tribunal also considered exemptions and abatements available under specific notifications and allowed the Cenvat Credit on input services. Ultimately, the Tribunal remanded the case to the Adjudicating Authority for re-computation of Service Tax liability.

4. Penalties and Conclusion: Given the interpretation of statutory provisions and the appellant's timely payment of undisputed Service Tax amounts, the Tribunal decided against imposing penalties. The appeal was allowed by remanding the case for re-computation of Service Tax liability, emphasizing the absence of penalties due to the circumstances of the case.

This detailed analysis of the judgment highlights the issues raised, the arguments presented, and the Tribunal's findings and decision, providing a comprehensive overview of the legal proceedings and outcome.