Tribunal rules in favor of appellants, setting aside service tax demand

The tribunal ruled in favor of the appellants, setting aside the demand for service tax and interest. The decision was based on the lack of evidence supporting the allegation that the appellants collected the amount from the flat purchaser after they had exited the partnership firm. The tribunal emphasized that the payment was made to the remaining partner of the firm, not to the appellants, rendering the demand unjustified and without legal merit.

---

---

Issues:
Appeal against demand of service tax and interest for amount collected from a flat purchaser.

Analysis:
The appellants, former partners of a construction firm, were alleged to have collected service tax from a flat purchaser. The demand was based on a letter written by one of the appellants to the purchaser instructing payment of the balance amount. However, the appellants had exited the partnership before the payment was made. The appellant argued that the purchaser paid the amount to the partnership firm, not to the individual partners. Evidence showed the payment was made to the continuing partner of the firm, not to the appellants. The tribunal found the demand baseless as the appellants were no longer part of the firm when the payment was made. The tribunal concluded that the demand lacked factual and legal basis and set it aside, allowing the appeals with consequential relief.

Conclusion:
The tribunal ruled in favor of the appellants, setting aside the demand for service tax and interest. The decision was based on the lack of evidence supporting the allegation that the appellants collected the amount from the flat purchaser after they had exited the partnership firm. The tribunal emphasized that the payment was made to the remaining partner of the firm, not to the appellants, rendering the demand unjustified and without legal merit.

---