Excess Service Tax Recovery: Section 73-A Applicable. Balance Sheet Figures Key. No Penalty Sans Malafides.

The excess recovery of service tax can only be demanded under Section 73-A of the Act, not Section 73. The computation of service tax demand should be based on figures from the balance sheets. The extended period of limitation cannot be invoked, and no penalty is imposable due to the absence of malafides. The appeal was disposed of accordingly.

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Issues Involved:
1. Whether the excess recovery of the service tax can be recovered under Section 73 of the Finance Act, 1994 or Section 73-A of the Finance Act, 1994Rs.
2. Which figures are to be taken for computation of demand of service tax, (a) Form 26-AS or (b) Balance SheetRs.
3. Whether extended period of limitation is invokable in the facts and circumstances of the case or notRs.
4. Whether the penalty can be imposed on the appellant or notRs.

Issue-wise Detailed Analysis:

Issue No. (i):
The adjudicating authority allowed abatement of 60% of the total turnover being works contract and extended the benefit of Notification No. 30/2012-ST dated 20.06.2012 in certain cases. The appellant collected the full tax from the service recipients instead of 50% and paid only 50% of the tax. The issue was whether this excess amount could be recovered under Section 73 or Section 73-A of the Finance Act, 1994. According to the provisions, any excess amount collected should be recovered under Section 73-A of the Act. The adjudicating authority did not invoke Section 73-A, and since this finding was not challenged by either side, the demand under Section 73 was not sustainable. Therefore, the confirmation of the excess amount recovered by the appellant cannot be demanded under Section 73 of the Act.

Issue No. (ii):
The adjudicating authority chose the higher figures from either Form 26-AS or the Balance Sheets for computing the service tax demand. However, the balance sheets, certified by a Chartered Accountant, were considered more authentic for recording all transactions. Therefore, the service tax demand should be computed based on the figures from the balance sheets. The impugned order regarding computation needs re-examination by the adjudicating authority based on balance sheet figures.

Issue No. (iii):
The extended period of limitation is not invokable in this case as it involves the benefit of Notification No. 30/2012-ST dated 20.06.2012 and the computation of taxable turnover. There was no suppression of facts by the appellant, and the department was aware of the activities and payment of service tax. In the absence of any malafides, the extended period of limitation cannot be invoked. Therefore, any demand pertaining to the extended period of limitation is set aside.

Issue No. (iv):
As the extended period of limitation is not invokable, no penalty is imposable on the appellant.

Conclusion:
a) The excess recovery of service tax can only be demanded under Section 73-A of the Act, which was not done by the adjudicating authority; therefore, the demand cannot be confirmed under Section 73 of the Act.
b) The figures from the balance sheets are more authentic for computation; hence, the computation of demand of service tax should be done as per balance sheet figures.
c) The extended period of limitation is not invokable.
d) No penalty is imposable on the appellant.

In view of the above observations, the appeal is disposed of. (Order pronounced in the court on 26.08.2021)

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