2018 (12) TMI 170 - AT - Service Tax

Penalty - Erection, commissioning & installation Services - Consulting engineer Services - GTA Services - Held that - The Revenue has pointed out serious mistake committed by the Adjudicating Authority in arriving at the demand for service tax in this order. The levy of service tax was required to be paid on receipt basis during the period under dispute. But it is seen that the adjudicating authority has not computed the correct service tax liability, but has gone by the submissions on calculation furnished by the Revenue. The matter is remanded to the adjudicating authority to pass a detailed order after taking into account the grounds agitated before this Tribunal - appeal allowed by way of remand.

Summary

Issues:
1. Determination of correct service tax liability based on the amount received during the disputed period.
2. Failure to consider liability for GTA service and penalty imposition under Section 76 of the Finance Act, 1994.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Original regarding the respondent's disclosure of a lower taxable value for service tax computation from 2003-04 to 2007-08. The show-cause notice was issued for recovery of the differential amount of service tax, interest, and penalties. The Adjudicating Authority accepted the value of taxable services based on the statement submitted by the respondent, leading to the confirmation of a specific amount of service tax and penalties. The Revenue contended that the correct service tax dues were not determined as adjustments for opening and closing balances were not made, and the liability for GTA service was not considered.

2. The Revenue challenged the order on grounds of the Adjudicating Authority's failure to conduct further investigation, make appropriate adjustments for opening and closing balances, and consider the liability for GTA service. Additionally, the Authority did not impose a penalty under Section 76 of the Finance Act, 1994. Despite the absence of the respondent during the appeal hearing, the Tribunal noted serious mistakes in the determination of service tax liability. The levy was required to be on a receipt basis, and the Authority did not accurately compute the liability. The Tribunal agreed with the Revenue's concerns regarding the non-payment of GTA service liability and the non-imposition of penalties under Section 76.

3. The Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for a detailed reconsideration, taking into account the issues raised by the Revenue. The Authority was directed to complete the proceedings within three months and provide an opportunity for the respondent to be heard. The decision was pronounced in open court, indicating a thorough review and reconsideration of the service tax liability and related penalties.