2023 (6) TMI 464 - AT - Service Tax

Wrongful collection of service tax from clients - Case of Revenue is that Appellant even after claiming that they were exempted from the payment of Service Tax, they were actually collecting amounts from their clients - Extended Period of Limitation - HELD THAT - From the findings of the Adjudicating Authority, it is seen that the Appellant has not brought in proper documentary evidence towards their claim that the quantified amount of Rs. 1,32,17,617/- is not correct. Further, when the Appellant claims that they have paid Rs. 27,91,144/- on 15.10.2008, there is no finding in the Order-in-Original as to why this amount has not been considered while passing the Order. It is deemed fit to remand the matter to the Adjudicating Authority. The Appellant is required to submit the complete details of invoice-wise statement for the period under dispute along with copies of the invoices to substantiate their claims towards requantification. The amounts paid by them under various challans should be submitted to the Adjudicating Authority. These figures should certified by Chartered Accountant clearly indicating the total turnover as per Profit Loss Account and turnover shown in ST-3 returns, amount collected by them on account of Service Tax etc. Even the matter of GAR Challan dated 15.10.2008 for Rs. 27,11,144/- claimed by the Appellant which was not being considered as paid, to be verified and allowed if found to be correct. The Adjudicating Authority will follow the principles of natural justice and allow all these documents to be placed before him and he will pass a considered decision after getting these facts verified. Since the matter pertains to the year 2004-05 to 2008-09 Adjudicating Authority is directed to complete the proceedings within 4 months of date of receipt of this communication. Appeal allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are the liability of the Appellant to pay Service Tax under Business Auxiliary Services (BAS) for job work undertaken for Hydraulic Equipment manufacturers, invoking of extended period provisions by the Department for demand quantification, justification of duty demand by the Adjudicating Authority, consideration of payment made by the Appellant in the Show Cause Notice and Order-in-Original, and the authenticity of Profit & Loss Account in determining the demand.

Liability of Service Tax under BAS:
The Appellant undertook job work for Hydraulic Equipment manufacturers and claimed exemption from Service Tax under BAS as the job work goods were used in the manufacture of dutiable finished goods. However, the Department found that the Appellant collected Service Tax amounting to Rs. 25,59,783/- during the period 2004-05 to 2007-08, leading to the issuance of a Show Cause Notice for demand quantification to Rs. 1,32,70,617/-. The Adjudicating Authority confirmed the duty demand and imposed penalties under relevant sections.

Invoking of Extended Period Provisions:
The Department invoked extended period provisions for demand quantification based on discrepancies between the Profit & Loss Account and ST-3 Returns provided by the Appellant. The Adjudicating Authority justified the use of Profit & Loss Account to determine the demand due to lack of proper documentary evidence. The Appellant argued that the job work was for manufacturers paying Excise Duty, and exemption should apply if the finished goods were used in nil excise duty products like tractors.

Consideration of Payment Made by Appellant:
The Appellant contended that the amount of Rs. 27,91,143/- paid by them was not considered in the Show Cause Notice or Order-in-Original, despite bringing it to the attention of the Adjudicating Authority. The Appellant sought the appeal to be allowed on merits due to this omission in the proceedings.

Authenticity of Profit & Loss Account:
The Adjudicating Authority emphasized the authenticity of the Profit & Loss Account as a public document prepared based on documentary evidence certified by a Chartered Accountant. The Authority noted that discrepancies in the figures provided by the Appellant were not adequately substantiated with documentary evidence, leading to the confirmation of the duty demand. The lack of proper evidence and documentation from the Appellant raised concerns regarding the accuracy of the quantified amount.

Remand to Adjudicating Authority:
The Tribunal deemed it appropriate to remand the matter to the Adjudicating Authority for the Appellant to submit detailed invoice-wise statements, copies of invoices, and amounts paid under challans certified by a Chartered Accountant. The Adjudicating Authority was directed to consider these submissions, verify the GAR Challan dated 15.10.2008, and complete the proceedings within four months while adhering to principles of natural justice.