2017 (6) TMI 115 - AT - Service Tax

Appellate Tribunal overturns tax demand decision, remands for fresh adjudication.

The Appellate Tribunal set aside the Commissioner(Appeals)'s decision confirming a service tax demand on services rendered under a brand name, remanding ... SSI exemption - Benefit of N/N. 6/2005-ST dt. 01/03/2005 - denial on the ground that the services rendered were under a brand name or trade name of another person - Held that: - appellant did not engage a consultant and make an effective rebuttal before the original adjudicating authority. The adjudicating authority also did not go through the books of accounts submitted by them but went ahead with the confirmation of the service tax demand. When the issue was agitated before the Commissioner(Appeals), he records in his order that the appellant did not make their defence submission with material and evidences in support before the original adjudicating authority - the issue remanded to the original adjudicating authority for a de novo decision - appeal allowed by way of remand. Issues:Service tax demand on services rendered under a brand name, availability of benefit under Notification No.6/2005-ST, effective contesting of service tax demand before authorities.Analysis:The appeal and stay application were filed against the Order-in-Appeal No.25/11/2013 passed by the Commissioner(Appeals), Mysore. The appellant, engaged in providing management, maintenance, or repair services for diesel engines, was not paying service tax on the amounts received for services rendered. The Department contended that the benefit of Notification No.6/2005-ST, granting nil service tax up to a certain threshold, would not apply as the services were rendered under the brand name of 'MICO-BOSCH.' The original authority confirmed a service tax demand of Rs. 4,96,522/- along with interest and penalties under the Finance Act, 1994. The Commissioner(Appeals) upheld the Order-in-Original, leading to the present appeal.During the proceedings, the appellant argued that they were unable to effectively contest the service tax demand before the authorities due to lack of familiarity with the adjudication process. They claimed that despite submitting their books of accounts and related records in response to the show-cause notice, they did not engage a consultant for an effective rebuttal. The original adjudicating authority did not review the submitted documents but proceeded with confirming the service tax demand. The Commissioner(Appeals) noted the appellant's failure to present their defense with material and evidence before the original authority, and declined to consider documents submitted during the appeal, stating that the appellate authority is not obliged to consider documents not presented before the original authority.In light of the above, the Appellate Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a de novo decision. The appellant was granted an effective opportunity to present their case, and additional evidence could be admitted as per law. The appeal was allowed by way of remand, and the stay application was also disposed of accordingly. The operative portion of the order was pronounced in Open Court on 28/04/2017.