Appeal allowed on service tax issue, remanded for fresh decision.

The appeal was allowed through remand as the Member (J) found merit in the appellant's argument that they had only received the gross amount stated in the invoices, inclusive of Service tax, without separately receiving the Service tax component. The lower authorities had not properly considered this aspect. The matter was remanded back to the original adjudicating authority for a fresh decision, specifically to consider the appellant's claim regarding the gross amount received being inclusive of the Service tax component. The original adjudicating authority was instructed to reconsider the imposition of penalty and interest after providing the appellant with a personal hearing.

---

---

Issues:
Appeal against Order-in-Appeal confirming demand of Service tax, interest, and penalty.

Analysis:
The appeal was directed against an Order-in-Appeal that upheld the Order-in-Original confirming the demand of Service tax, interest, and penalty. The appellant, registered as a security service provider under Service tax provisions, failed to submit ST-3 return and pay the due service tax. The demand was for the period June 2000 to August 2001. The adjudicating authority confirmed the demand, imposed penalty, and sought interest as the appellant had not paid the outstanding Service tax. On appeal, the Commissioner (Appeals) agreed with the adjudicating authority but reduced the penalty imposed on the appellant.

The appellant's representative argued that they did not issue Service tax bills to their clients, believing they had to pay Service tax only after receiving payment. It was also contended that the calculation of the Service tax amount was incorrect, as the gross payment received already included the Service tax component. However, the Departmental Representative (D.R.) contended that since the appellant was registered under Service tax provisions, they should have paid the Service tax without awaiting a demand from the department. The appellant's failure to respond to departmental communications led to the correct imposition of penalties.

After considering the arguments from both sides and examining the records, the Member (J) found merit in the appellant's consistent stance that they had only received the gross amount stated in the invoices, inclusive of Service tax, without actually receiving the Service tax component separately. The Member (J) noted that the lower authorities had not properly considered this aspect. Consequently, the matter was remanded back to the original adjudicating authority for a fresh decision, specifically to consider the appellant's claim regarding the gross amount received being inclusive of the Service tax component. The original adjudicating authority was instructed to reconsider the imposition of penalty and interest after providing the appellant with a personal hearing. The appeal was allowed through remand.

---