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2019 (12) TMI 338 - AT - Service TaxRecovery of service tax - telephone services - Short-payment of service tax as per reconciliation of ST-3 returns and with income shown in accounts and interest thereon - HELD THAT - Apparently and admittedly document of defence was produced by the appellant before the adjudicating authority below reflecting the extra payment of service tax by the appellant. Such document has already been allowed to be placed on record by this Tribunal. The document has been prepared in accordance of the ST-3 returns as were filed by the appellant during the period of dispute which are already the part of the impugned order - Since the document is in the form of calculation chart, it would be appropriate that this issue be remanded back to the adjudicating authority below for re-verification of the impugned ST-3 returns - appeal allowed by way of remand. Short-payment of service tax on proceeds of Modem being part of taxable services along with interest thereon - whether the Modem was given to the customers free of cost or as to whether the value thereof was included in the value of telecommunication services provided by the appellant? - HELD THAT - The said question cannot be adjudicated unless and until there are appropriate invoices on record proving that no amount has been received by the appellant from their customers in lieu of providing them with the Modem or that supply of Modem was purely a trading activity of the appellant. In the absence thereof, the adjudicating authority has committed no error while forming the opinion that the appellant has not paid service tax on the gross amount charged from the customers inasmuch as they have also charged for the Modem provided to the subscriber and that the same is justified - Since admittedly, the goods did not involve payment of VAT, the question of those being purely a trading activity cannot be ascertained - there are no reason to differ from the observations that Modems rather were typically the part of service provision - demand upheld. Wrong availment of service tax credit on rent-a-cab services along with interest thereon - HELD THAT - The availment of utilisation of Cenvat credit on rent-a-cab services has duly been acknowledged on behalf of the appellant. Admissions are the best evidences. Otherwise also there is clear cut finding by the adjudicating authority below which, in the light of the aforesaid acknowledgment, we do not find any reason to differ - demand upheld. Wrong availment of service tax credit on invoices on which service tax registration number/STC of service provider are not mentioned along with interest thereon - HELD THAT - There is no denial about the impugned invoices to have all details except the PAN based registration number of the service providers. There is also no denial that all such registration numbers were provided by the appellant. The appellant has acknowledged that M/s L.K. Enterprises only one of the service providers among the said list has not deposited the service tax. However, remaining all have discharged their liability. There is nothing on record produced by the Department to falsify the discharge of liability by the remaining service providers - There is no denial that the impugned input services have been utilised by the appellant in provision of output service - the entire demand on account of this issue except for the liability of M/s L.K. Enterprises is set aside - adjudicating authority is required to arrive at the appropriate calculation as far as the amount on account of M/s L.K. Enterprises is concerned so as to be recovered after deducting the same from total demand as was confirmed by the adjudicating authority below but now stands dropped except for such amount as is directed to be calculated by the authority below. Non/short payment of service tax on telephone service provided to employees - HELD THAT - The service recipient being the employees of the appellant no other object then that of efficiency of appellant services is found to be a reason for given services to the employees. In the given circumstances, there is no separate service recipient then the employees of appellant itself. Resultantly, the impugned service here in is the service to self Section 67(1) of the Service Tax Act is held to have wrongly invoked as since there is no consideration to question of any taxation at all arises - Demand set aside. Non-reversal of Cenvat Credit under Rule 6(3) of Cenvat Credit Rules, 2004 - HELD THAT - Qua this liability also there is an apparent acknowledgement on part of the appellant that the proposed amount of credit has already been reversed by them. There is no otherwise submission nor the documents to falsifying the said reversal. In view thereof, the order disallowing the credit taken under Rule 6(3) of Cenvat Credit Rules, 2004 and reversal thereof is hereby upheld. Appeal allowed in part.
Issues Involved:
1. Short-payment of service tax as per reconciliation of ST-3 returns and income shown in accounts. 2. Short-payment of service tax on proceeds of Modem being part of taxable services. 3. Wrong availment of service tax credit on rent-a-cab services. 4. Wrong availment of service tax credit on invoices without service tax registration number/STC of service provider. 5. Non/short payment of service tax on telephone service provided to employees. 6. Non-reversal of Cenvat Credit under Rule 6(3) of Cenvat Credit Rules, 2004. Issue-wise Analysis: Issue-1: Short-payment of service tax as per reconciliation of ST-3 returns and income shown in accounts The appellant argued that the adjudicating authority did not consider the complete ST-3 returns, leading to an incorrect finding. The appellant provided additional documents showing an excess payment of ?23,67,540/- towards service tax. The Tribunal found that the appellant's document, reflecting extra payment, should be re-verified by the adjudicating authority. The issue is remanded back for re-verification of ST-3 returns. Issue-II: Short-payment of service tax on proceeds of Modem being part of taxable services The appellant claimed that Modems were given to customers free of charge and without VAT liability, hence no service tax was applicable. However, the absence of invoices made it impossible to verify if Modems were part of the telecommunication service value. The Tribunal upheld the adjudicating authority's decision, confirming the demand for service tax on Modems. Issue-III: Wrong availment of service tax credit on rent-a-cab services The appellant acknowledged the wrongful availment of Cenvat credit on rent-a-cab services. The Tribunal upheld the adjudicating authority's demand on this aspect due to the appellant's admission. Issue-IV: Wrong availment of service tax credit on invoices without service tax registration number/STC of service provider The appellant contended that the absence of PAN-based registration numbers on invoices was a procedural lapse and provided those numbers during the audit. The Tribunal noted that except for M/s L.K. Enterprises, other service providers had discharged their tax liabilities. The Tribunal set aside the demand except for M/s L.K. Enterprises, and remanded the issue to calculate the amount to be recovered from the appellant. Issue-V: Non/short payment of service tax on telephone service provided to employees The appellant argued that telephone services provided to employees free of cost were not taxable as they were not services to third parties. The Tribunal agreed, stating that the services were for the efficiency of the appellant's operations and not against any consideration. The demand was set aside. Issue-VI: Non-reversal of Cenvat Credit under Rule 6(3) of Cenvat Credit Rules, 2004 The appellant acknowledged the reversal of the proposed amount of credit. The Tribunal upheld the adjudicating authority's order disallowing the credit and confirming the reversal. Conclusion: The appeal was partly allowed with the following directives: 1. Remand for re-verification of the difference between trial balance and ST-3 returns. 2. Confirmation of service tax demand on Modems. 3. Confirmation of Cenvat credit on rent-a-cab services. 4. Set aside the denial of Cenvat credit on invoices except for M/s L.K. Enterprises, with remand for calculation. 5. Set aside the demand for telephone services to employees. 6. Confirmation of the reversal of Cenvat credit under Rule 6(3) CCR, 2004. The adjudicating authority is required to re-adjudicate on the remanded issues.
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