PSU wins service tax appeal for FY 2012-13

The Tribunal ruled in favor of the appellant, a PSU engaged in coal mining, in a case concerning service tax liability under reverse charge for the FY 2012-13. Despite the Department's rejection of payment evidence, including tax challans, the Tribunal accepted evidence from the CBEC website and a certificate from the service provider confirming full tax deposit. As the service tax had already been paid, the demand was set aside, and the appeal was allowed with consequential relief. The Tribunal found no loss to the revenue and ruled in favor of the appellant, setting aside the demand for service tax, interest, and penalty.

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Issues involved:
Whether the appellant is liable to deposit service tax under Security Service under reverse charge when the entire service tax amount has been reimbursed to the service provider who has deposited the same with the Govt. Treasury.

Analysis:

The appellant, a PSU engaged in coal mining, filed an appeal against the Order-in-Appeal confirming a service tax demand of Rs. 6,81,863/- for the FY 2012-13. The appellant reimbursed the service tax amount to the security service provider, but the Department did not consider the challans submitted as evidence of payment. The appeal was made to the Tribunal after failing before the Commissioner (Appeals).

The appellant's Chartered Accountant argued that since the entire tax amount was deposited with the treasury by the service provider, no further demand should be raised. Evidence including tax paid challans, CBEC website confirmations, and a certificate from the service provider were submitted but not considered by the authorities. The Chartered Accountant cited relevant Tribunal decisions to support the contention that if tax is already paid by the service provider, the department cannot confirm the same against the assessee. The appellant also contested the demand on grounds of time bar, penalty, and revenue neutrality.

The Revenue's Authorized Representative maintained that the service tax was legally due under reverse charge, and the appellant could not claim relaxation. The Representative urged the dismissal of the appeal.

After hearing both sides, the Tribunal analyzed the evidence presented. The original authority had rejected the challans due to lack of a legible bank seal, but the appellant had provided payment confirmations from the CBEC website and a certificate from the service provider confirming full tax deposit. The Commissioner (Appeals) did not address these submissions and upheld the demand. The Tribunal found that the payment details were supported by CBEC website confirmations, undisputed by the authorities. Given the appellant's status as a PSU and no loss of revenue to the Exchequer, the demand was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal found in favor of the appellant, ruling that the demand for service tax, interest, and penalty be set aside, as the service tax had already been paid and there was no loss to the revenue.

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