2022 (8) TMI 703 - AT - Service Tax

Non-payment of service tax - demand of interest under Section 75 of FA - demand of service tax has been rightly raised on the basis of Form-26AS (under the Income Tax Provisions) or not - HELD THAT - There is no delay in payment of service tax and the appellant have rightly paid service tax, upon completion of the work, coinciding with raising of the invoice within 30 days. Accordingly, the demand of interest is set aside. Demand of service tax on the amount of Rs.1,05,050/- due to mis-match in Form 26 AS and ST-3 Return - period April, 2017 to June, 2017 - HELD THAT - Evidently, Form 26 AS reflects the amount on cash basis, and accordingly, the demand on this score has been wrongly raised. Thus, the demand has been wrongly raised on the amount of Rs.1,05,050/- and accordingly, this ground is also allowed in favour of the appellant and the demand is set aside - All penalties are also set aside - appeal allowed.

Summary

Issues:
1. Whether the demand of interest under Section 75 has been rightly raised.
2. Whether the demand of service tax on the amount of Rs.1,05,050/- has been rightly raised based on Form-26AS.

Analysis:
1. The dispute revolves around the demand of interest under Section 75. The appellant, engaged in providing "Erection, Commissioning and Installation Services," primarily laying underground telecom cables, raises bills only after work approval by the principal-service receiver. The appellant completes work as certified by their Engineer, receives a "handing over certificate" from the service receiver, and then raises bills. The Revenue argued that the appellant should have paid service tax earlier based on the work order period mentioned in the invoices. However, the appellant demonstrated that they raised invoices within 30 days of service completion, coinciding with tax payment. The Tribunal found no delay in service tax payment, setting aside the demand of interest.

2. The second issue concerns the demand of service tax on Rs.1,05,050 due to a mis-match in Form 26AS and ST-3 Return for April-June 2017. The appellant contended that the amount was already booked and charged to service tax in the previous financial year 2016-2017 on an accrual basis. Form 26AS reflected the amount on a cash basis, leading to the incorrect demand. The Tribunal, after considering the facts, concluded that the demand on this amount was wrongly raised. Therefore, this ground was allowed in favor of the appellant, setting aside the demand along with penalties. The appeal was allowed, and all issues were resolved in favor of the appellant.