2005 (10) TMI 23 - AT - Service Tax

Appellate Tribunal overturns tax demand & penalty, remands case for verification.

The Appellate Tribunal CESTAT, Mumbai allowed the appeal, setting aside the lower authorities' order confirming tax demand and penalty. The case was ... Deposit of service tax by the service provider - transfer of deposit between bank branches - verification of bank transfer for issuance of discharge certificate - penalty not leviable where tax has been deposited and verifiedDeposit of service tax by the service provider - transfer of deposit between bank branches - verification of bank transfer for issuance of discharge certificate - Impugned order confirming tax demand set aside and matter remanded for verification of transfer and re-hearing by the original authority. - HELD THAT: - The Tribunal recorded the parties' agreement that the entire service tax had been deposited by the service provider, but that the deposit had been made in a non-designated bank branch which was subsequently transferred to the appropriate branch. In view of this, the Tribunal directed that the order confirming the tax demand be set aside and remitted the matter to the original authority to re-hear the appellant and verify, in terms of the Pay Accounts Office letter dated 3-4-2003, whether the transfer of the deposit to the appropriate bank branch is in order. The Tribunal limited the remit to verification of the transfer and fresh consideration on that basis, with the consequential administrative act of granting a discharge of tax certificate only if transfer is found in order. [Paras 2]Order confirming tax demand set aside; appeal remanded to original authority for re-hearing and verification of the bank transfer, with directions to grant discharge certificate if transfer is established.Penalty not leviable where tax has been deposited and verified - Penalty confirmed by lower authorities is held not called for. - HELD THAT: - Having accepted that the tax was deposited by the service provider and remitted the matter for verification of the transfer to the appropriate bank branch, the Tribunal held that no penalty should be imposed. The Tribunal therefore set aside the penalty confirmed by the lower authorities and directed that no penalty be levied in the circumstances. [Paras 2]Penalty set aside; no penalty to be imposed.Final Conclusion: The Tribunal allowed the appeal by setting aside the order confirming tax demand and penalty, remanding the matter to the original authority to re-hear and verify the bank-branch transfer in terms of the Pay Accounts Office letter dated 3-4-2003, and directed that a discharge certificate be granted only if the transfer is found in order; no penalty is to be imposed. The Appellate Tribunal CESTAT, Mumbai found that the service provider deposited the entire amount of service tax in a non-designating bank, which was later transferred to the appropriate bank branch. The lower authorities' order confirming the tax demand and penalty was set aside, and the case was remanded for further verification based on a Pay Accounts office letter dated 3-4-2003. No penalty was imposed. Appeal allowed for remand to the original authority.