2024 (9) TMI 181 - AT - Service Tax

Demand of short paid service tax along with interest and for imposing penalties - quantification of service tax - HELD THAT - There is indeed certain discrepancies with regard to quantification of service tax. The amount paid by the appellant is noted as Rs.1,16,81,965/--. On the basis of challans given in the Table the amount shown as paid by the appellant does not match. For this reason, it is opined that the matter requires to be remanded to the adjudicating authority who is directed to requantify the service tax for the disputed period on the basis of details and documents furnished by the appellant. The issue of receipt basis upto 2011 has to be taken note of. The adjudicating authority shall also consider that, if the appellant has paid the entire amount for the disputed period and then there would not be any further liability. In the present case, since the demand raised is only on incorrect calculation of service tax in the SCN, it shows that the appellant has not suppressed facts with intent to evade payment of duty. For this reason, the penalty imposed under Section 78 of the Finance Act, 1994 requires to be set aside. The impugned order is modified to the extent of setting aside penalty under Section 78 of the Finance Act, 1994. The appeal is partly remanded for verifying the quantification of service tax. In case any balance is to be paid, the appellant is liable to pay service tax along with interest - Appeal allowed in part and part matter on remand.

Summary

Issues:
Quantification of service tax for the disputed period.

Analysis:
The appellant, a service provider, was found to have failed to pay service tax on gross receipts, resulting in short-payment of tax. The original authority confirmed the demand raised in the show cause notice, along with interest and penalties. The appellant contested the quantification of service tax, arguing that they had paid a significant portion of the tax demanded. The appellant maintained that they had discharged their tax liability honestly and timely, based on the amounts received. The Tribunal noted discrepancies in the quantification of service tax and remanded the matter to the adjudicating authority for reevaluation. The Tribunal directed the authority to consider the appellant's payment history and the basis of tax liability up to 2011, emphasizing the need for accurate quantification.

The Tribunal found that the demand was based on incorrect calculation of service tax rather than intentional evasion, leading to the setting aside of the penalty under Section 78 of the Finance Act, 1994. The Tribunal modified the impugned order to exclude the penalty and partly remanded the case for verifying the quantification of service tax. The appellant was directed to pay any outstanding balance along with interest if determined by the adjudicating authority. The decision highlighted the importance of accurate quantification and upheld the appellant's compliance with tax obligations while emphasizing the need for precise calculations in tax assessments.

In conclusion, the Tribunal's decision focused on the quantification of service tax for the disputed period, emphasizing the appellant's honest tax compliance and the necessity for accurate assessment of tax liabilities. The remand to the adjudicating authority aimed to reevaluate the service tax calculation, considering the appellant's payment history and the basis of tax liability. The decision underscored the importance of precise quantification in tax assessments and set aside the penalty imposed under Section 78 due to the lack of intentional evasion by the appellant.