2023 (5) TMI 247 - AT - Service Tax

Simultaneous proceedings at different locations - Proceedings initiated against the respondents at second location were dropped - It is alleged that Adjudicating Authority failed to verify whether the unit of the Respondent located at Visakhapatnam and Kolkata are one or the same are different - failure to verify whether the services rendered by the Respondent in their Visakhapatnam unit were similar to the services said to be rendered by them at Kolkata - HELD THAT - Visakhapatnam Service Tax Commissionerate has initiated separate action against the Respondent at their Visakhapatnam unit for non payment of appropriate service tax there . The said litigation has attained finality vide the above said Final Order of the Tribunal. The copy of the Adjudication Order No 12/2009 (PVR) dated 07/05/2009 has also been communicated to their Head Office in Kolkata. Form the above, it is observed that Departmental action has already been initiated to demand Service Tax against the Respondent at Visakhapatnam separately for the services rendered by their branch unit at Visakhapatnam. In the impugned order the Commissioner has rightly observed that action has already been initiated in Visakhapatnam and no further action is warranted in their Kolkata Unit. Accordingly, the Commissioner has rightly dropped the proceedings initiated against the Respondent in the impugned order. No further action is warranted in their Head Office at Kolkata - the impugned order by the Commissioner upheld - appeal of Revenue dismissed.

Summary

Issues involved:
The Department's appeal against the order passed by the Commissioner dropping proceedings initiated in a show cause notice.

Summary:
The Department challenged the order passed by the Commissioner dropping proceedings initiated in a show cause notice. The Department argued that the Adjudicating authority failed to verify if the Respondent's units in Visakhapatnam and Kolkata were the same or different, and if the services rendered at both locations were similar. The Respondent, through their Advocate, clarified that their Head office is in Kolkata, with a branch office in Visakhapatnam for on-site work. They provided a letter stating the specific activities undertaken at the Visakhapatnam branch office, emphasizing that the services rendered there do not attract service tax. The Respondent presented documents showing that separate action had been initiated against them in Visakhapatnam for non-payment of service tax, which had been finalized by the Tribunal. The Commissioner rightly observed that no further action was needed in Kolkata as action had already been taken in Visakhapatnam. Consequently, the Commissioner dropped the proceedings against the Respondent in Kolkata. The Tribunal upheld the Commissioner's decision, rejecting the Department's appeal.

In conclusion, the Tribunal found that no further action was necessary at the Respondent's Head Office in Kolkata and upheld the Commissioner's decision to drop the proceedings. The appeal filed by the Department was rejected.