2009 (10) TMI 24 - AT - Service Tax

Appellate court remands case for reassessment of tax liability and penalties, stresses addressing all raised issues.

The appellate court remanded the case to the Commissioner for further consideration. The Commissioner was directed to assess the admissibility of ... Penalties - Commissioner had considered the claim for lenient view and rejected on valid grounds and hence the impugned order has to be upheld. He also submits that the appellant did not take registration and hence lenient view is not warranted – held that - Commissioner in his impugned order has not considered the issue of reimbursable expenses submitted in the memo of appeal filed by the appellants – matter remanded back to be considered afresh Issues:1. Liability of service tax for man power services provided.2. Imposition of penalties under Sections 77 and 78 of Finance Act, 1994.3. Consideration of reimbursable expenses in service tax calculation.4. Remand of the matter for further consideration by the Commissioner.Analysis:1. The appellants were providing man power services to various industries, leading to a demand for service tax of Rs. 8,62,109/- for a specific period. The appellant, being an individual labor contractor, claimed ignorance of tax liability and later paid the demanded amount after contacting service receivers. The appellant sought leniency under Section 80 of the Finance Act, 1994, requesting a waiver of penalties under Sections 77 and 78. Additionally, the appellant contested the service tax amount, arguing that reimbursable expenses were not deducted, citing a trade notice for reference.2. The Revenue, represented by the Learned SDR, argued that the Commissioner had rejected the leniency claim regarding penalties after observing that the service tax liability was not challenged by the appellant. It was noted that the appellant had not obtained registration, which was considered a factor against leniency. The Revenue supported upholding the impugned order based on these grounds.3. The Member (Technical) noted that the Commissioner had not addressed the issue of reimbursable expenses raised by the appellants in their appeal memorandum. Consequently, the matter was remanded back to the Commissioner for reconsideration. The Commissioner was instructed to evaluate the admissibility of reimbursable expenses in calculating the service tax liability and to reassess the claim for leniency on penalties. The appellants were granted a fresh opportunity to present their case in light of these considerations.4. In conclusion, the judgment highlighted the necessity for a comprehensive review of the appellant's submissions regarding reimbursable expenses and leniency in penalties. The matter was remanded to the Commissioner for a detailed reconsideration, emphasizing the importance of addressing all relevant aspects raised by the appellants during the proceedings.