Tribunal remands service tax issue for fair hearing, sets aside penalties

The Tribunal set aside penalties, remanded the service tax demand issue to the adjudicating authority, and ensured a fair hearing for the appellant in an appeal against an Order-in-Appeal regarding failure to pay service tax under reverse charge, ex parte adjudication, double taxation issue, and discrepancy in service tax amount.

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Issues:
Appeal against Order-in-Appeal, Failure to pay service tax under reverse charge, Ex parte adjudication, Double taxation issue, Discrepancy in service tax amount, Remand to adjudicating authority.

Issue 1: Appeal against Order-in-Appeal
The appellant filed an appeal against Order-in-Appeal No.36/HWH/ST/2017-18 dated 31.07.2017 passed by the Commissioner (Appeals) of CGST & Central Excise, Kolkata. The original demand of service tax, interest, and penalties were modified by the Commissioner (Appeals), leading to the present appeal before the Tribunal.

Issue 2: Failure to pay service tax under reverse charge
A show-cause notice was issued for the period 2009-2010 to 2012-2013 for the failure to pay service tax under the category of transport of goods by road under reverse charge. The adjudicating authority confirmed the demand of service tax along with interest and penalties. The Commissioner (Appeals) modified the adjudication order, reducing the demand but upholding penalties.

Issue 3: Ex parte adjudication
The appellant claimed they did not receive the show-cause notice and had no opportunity to respond or attend a personal hearing. The adjudication order was passed ex parte, leading to the appellant being unaware of the proceedings until the receipt of the order.

Issue 4: Double taxation issue
The Commissioner (Appeals) observed that the service tax for the GTA service had already been paid by the transporter and subsequently by the appellant to the transporter. Demanding the same tax again from the appellant would result in double taxation, contrary to the statutory provisions. The Commissioner (Appeals) verified invoices and payments, leading to a modification of the demand.

Issue 5: Discrepancy in service tax amount
The appellant pointed out a discrepancy in the amount of service tax confirmed by the Commissioner (Appeals). They provided statements of carriage inward for the relevant period and argued that the demand should be lower due to the tax already paid by the transporter. The appellant requested verification by the adjudicating authority.

Issue 6: Remand to adjudicating authority
The Tribunal set aside the penalties imposed and invoked Section 80. The matter of service tax demand was remanded to the adjudicating authority to consider the appellant's submissions and verify the discrepancy in the tax amount. The appellant was granted a reasonable opportunity of hearing in this regard.

In conclusion, the Tribunal disposed of the appeal by setting aside penalties, remanding the service tax demand issue to the adjudicating authority, and ensuring a fair hearing for the appellant.

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