2016 (5) TMI 88 - AT - Service Tax

Tribunal grants waiver of pre-deposit for service tax, orders re-adjudication on basic facts

The Tribunal allowed the applicant's waiver of pre-deposit request for a confirmed service tax amount and penalties, requiring verification of basic facts ... Demand of Service tax alongwith equal amount of penalty - Provider of telecommunication services - Revenue submitted that applicant have short paid service tax in as much as they have not discharged service tax on the gross billed amount for their services, instead paid service tax on the amounts received only. Held that:- neither the show cause notice nor the impugned order had elaborated the reason for confirming the differential service tax against the appellant. Also no evidence was brought forward by the lower authority to substantiate that the appellant have realized consideration towards value of taxable services over and above what is declared by them in the statutory returns. In the absence of any such allegation or supporting evidence, the confirmation of demand for service tax by the impugned order is legally not sustainable. Period of limitation - Held that:- ST3 returns did indicate different amounts as billed and realized and on this basis it is found that the parties / appellants defense regarding the demand being time barred has as also not been considered even with respect to all details being available in the periodical returns filed by the appellant. Portion of the demands is contested as even beyond 5 years. There is no discussion or finding on this aspect. It is also found that the original authority failed in examining the factual claims made by the appellant regarding the reason for the difference between billed amount and realized amount for the purpose of discharging service tax. We take note that out of 11 half yearly period covered in the demand in respect of 3 half year periods the actual realized amount on which service tax is paid is much higher than the billed amount. No examination or findings has been recorded by the original authority on these details. Therefore, the impugned order cannot be sustained and set aside. - Matter remanded back. Issues:Waiver of pre-deposit for service tax amount and penalties; Short payment of service tax on gross billed amount; Lack of detailed examination in show cause notice and adjudication order; Discrepancy between billed and realized amounts in ST3 returns; Failure to consider defense of time bar; Lack of examination of factual claims by original authority.Waiver of Pre-Deposit:The applicant filed for waiver of pre-deposit concerning a confirmed service tax amount of Rs. 6,00,44,670/- along with penalties. The Tribunal decided to dispose of the main appeal without pre-deposit, as verification of basic facts from documents submitted was necessary. Both parties consented to this approach.Short Payment of Service Tax:The case revolved around whether the appellant had short paid service tax due to the difference between charged/billed amount and received amount. The show cause notice and adjudication order lacked detailed examination, with the notice only mentioning a difference without further verification. The Tribunal noted that service tax is payable only on the consideration received, which was not disputed. The original authority's conclusion was based on the appellant's failure to provide detailed documents, leading to the demand confirmation.Discrepancy in ST3 Returns:The Tribunal observed that the show cause notice and order did not elaborate on the reasons for confirming the differential service tax. ST3 returns indicated different billed and realized amounts, common due to varying payment periods. The lack of evidence supporting the appellant's realization of additional consideration rendered the demand legally unsustainable.Failure to Consider Time Bar Defense:The impugned order did not address the appellant's defense of demands being time-barred, despite available details in the periodic returns. The original authority failed to examine the factual claims regarding the differences in billed and realized amounts, especially for periods where the realized amount exceeded the billed amount.Conclusion:The Tribunal set aside the impugned order, allowing the original authority to re-adjudicate the case based on the documentary evidence provided by the appellant. The time bar defense must be considered, and a fresh decision made after thorough examination. The appeal and stay petition were disposed of accordingly.