Appeal allowed against service tax demand of Rs.612.38 crores; remanded for quantification verification.

The Tribunal allowed the appeal filed by East Central Railways against the Order-in-Original confirming a service tax demand of approximately Rs.612.38 crores. The Tribunal found that the service tax had been deposited with the Government Treasury through account adjustment in accordance with guidelines. The impugned order was set aside, emphasizing the need to verify the tax amount involved during the disputed period. The matter was remanded for quantification verification and ensuring the appellant's right to a fair hearing.

---

---

Issues:
Appeal against Order-in-Original confirming service tax demand of Rs.612.38 crores approx.; Non-deposit of service tax collected with the Government Treasury; Applicability of guidelines for depositing service tax through account adjustment; Need for examination of tax amount involved during the disputed period.

Analysis:
The appeal was filed by East Central Railways against the Order-in-Original confirming a service tax demand of approximately Rs.612.38 crores. The proceedings were initiated based on the allegation that the service tax collected was not deposited with the Government Treasury as required by the Finance Act, 1994. The Commissioner observed that although the appellant claimed the amount was deposited through book adjustment, the actual payment was not proven.

Upon reviewing the case and documents, the Tribunal noted that the Railway Board confirmed the deposit of service tax through a letter dated 16.11.2020. The amount collected was credited to the Civil Head of Account as per existing guidelines from the Ministry of Finance. It was clarified that the service tax was booked under the Major Head 0044 for specific financial years.

The Tribunal found that the service tax had indeed been deposited with the Government Treasury through account adjustment, in accordance with the guidelines issued by the Finance Ministry. This aligns with the Tribunal's consistent stance in previous cases such as Post Master vs. CCE, Jodhpur and others, where similar situations were dealt with.

Consequently, the impugned order confirming the service tax demand was set aside as it could not be sustained. However, the Tribunal emphasized the necessity to examine the quantification of the tax amount involved during the disputed period to ensure it corresponds to the amount deposited through book adjustment. The matter was remanded back to the authorities for this specific purpose, directing them to verify the quantification and supporting documents while providing the appellant with a fair opportunity of personal hearing.

In conclusion, the appeal was allowed by way of remand to the learned Adjudicating Authority for further examination and verification of the tax amount involved, emphasizing cooperation from the appellant and adherence to principles of natural justice to avoid unnecessary delays in the proceedings.

---