Remand for verification of subsequent service tax payment keeps liability and consequential interest open

Where the record does not permit verification of whether service tax on the disputed amount was subsequently discharged, the question of short payment cannot be finally determined without factual inquiry. The proper course is remand to the Original Adjudicating Authority to verify subsequent payment and, if required, reconsider the consequential interest issue. The impugned order was set aside and the matter was sent back for limited verification rather than a final ruling on tax liability.

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Issues: Whether the matter required remand to verify if service tax on the disputed amount had subsequently been paid, and to reconsider the question of interest.

Analysis: The appellant's case was that service tax had been discharged after receipt of payment from purchasers, while the Revenue maintained that tax was payable on the basis of the agreed payment schedule under the Point of Taxation Rules, 2011. Since the record did not permit verification at that stage whether tax on the relevant component had in fact been paid subsequently, the issue of short payment could not be finally determined without factual verification by the adjudicating authority.

Conclusion: The matter was remanded to the Original Adjudicating Authority for verification of subsequent payment of service tax and, if necessary, reconsideration of interest; the impugned order was set aside and the appeal was allowed by way of remand.

Final Conclusion: The dispute was not finally decided on the tax liability itself, and further adjudication was directed on the limited question of subsequent payment and interest.

Ratio Decidendi: Where the factual position regarding subsequent discharge of tax cannot be verified from the record, the proper course is to remand for factual verification before deciding liability and consequential interest.

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