2022 (2) TMI 457 - AT - Service Tax

Tribunal Rules on Service Tax Disputes: Liability, Penalties, Evidence

M/s. Interstate Syndicate Prop: Shri Bhim Sharma Versus Commissioner of Central Excise & Service Tax, Jamshedpur

The Tribunal addressed various complex issues concerning Service Tax liabilities, registration discrepancies, penalties, and evidence interpretation in ... Taxable services or not - mining services - Appellant had been providing taxable services in the state of Jharkhand prior to obtaining registration in the state of Jharkhand or not - offices of the Appellant in Odisha and Jharkhand can be construed to be two premises of the proprietor or not - taxability of Mining Services provided by the Appellant prior to 01.06.2007 - HELD THAT:- In the instant case, PAN AAAFI4408C represents a firm/limited liability partnership with the name starting with ‘I’; in this case Interstate Syndicate. Further, PAN AEIPS7146F represents an individual whose surname starts with ‘S’; in this case Sri Bhim Sharma. Therefore, the contention of the Appellant M/s.Interstate Syndicate is the proprietorship concern of Mr. Sharma and that they had obtained registration under a different PAN is factually incorrect. M/s. Interstate Syndicate is a firm/LLP, although no documents in respect of its constitution have been produced - under the eyes of law, M/s. Interstate Syndicate and Prop. Bhim Sharma are separate legal entities and the attempt on the part of the Appellant to mislead this Tribunal and the Adjudicating authority is unwarranted - the services provided by the Appellant in Odisha and the services provided in Jharkhand are to be considered as services provided by two different entities. The contention of the Appellant that they had not been providing services in the state of Jharkhand prior to obtaining registration in the state of Jharkhand is contrary to the evidence on record - as per the work orders and statement of Bills produced by the Appellant for the period prior to 31.12.2010, it is evident that the Appellant was accepting work orders addressed to its address in Jharkhand during the period from 2007 to 2010 - the Appellant was also raising invoices during the period from 2007 to 2010 which contained its address in Jharkhand. It is also observed that surprisingly, certain invoices raised by the Appellant did not contain any address. Therefore, even if for the sake of argument it is accepted that the Appellant was providing services from Odisha, there are no cogent reason to justify the mention of their address in Jharkhand in the invoices while there being no mention of their registered address in Odisha at the same time. Demand of Service Tax in respect of ‘Mining Services’ provided prior to 01.06.2007 - HELD THAT:- The Central Board of Excise & Customs (As it then was) had issued various clarificatory Circulars and Notifications to clarify the treatment of specific services, forming part of ‘Mining Services’, prior to 01.06.2007. Therefore, to the extent of the demand raised on the value of service of ₹ 70,35,178/- it is deemed fit to remand the matter to the Adjudicating authority to calculate the actual demand payable by the Appellant keeping in mind the exact nature of service provided by the Appellant and the clarifications issued by CBEC from time to time in respect thereof. Appeal disposed off. Issues:1. Dispute over Service Tax liabilities in Odisha and Jharkhand.2. Allegations of non-payment of Service Tax and registration issues.3. Confirmation of Service Tax demand under different categories.4. Imposition of penalties under various sections.5. Dispute regarding services provided in Jharkhand before registration.6. Appellant's contentions and arguments.7. Legal interpretation of PAN registrations and separate entities.8. Evidence of services provided in Jharkhand before registration.9. Remand for calculation of Service Tax demand on Mining services.Analysis:Issue 1: Dispute over Service Tax liabilities in Odisha and JharkhandThe case involves a dispute regarding the payment of Service Tax liabilities by the Appellant in both Odisha and Jharkhand. The Appellant had initially registered in Odisha but later obtained registration in Jharkhand, leading to a disagreement over the jurisdiction for tax payments.Issue 2: Allegations of non-payment of Service Tax and registration issuesThe Department alleged that the Appellant failed to pay Service Tax liabilities and obtain registration in Jharkhand for services provided. A Show Cause Notice was issued, highlighting the discrepancies in tax payments and registration status.Issue 3: Confirmation of Service Tax demand under different categoriesThe Commissioner confirmed Service Tax demands under various categories such as 'Mining of Mineral Services', 'Business Auxiliary Services', and 'Cargo Handling Services'. The Appellant contested the demands based on the scope of the Show Cause Notice.Issue 4: Imposition of penalties under various sectionsPenalties were imposed under Sections 76, 77, and 78 of the Act by the Commissioner in addition to the confirmed Service Tax demands. The Appellant challenged the penalties imposed along with the tax liabilities.Issue 5: Dispute regarding services provided in Jharkhand before registrationThe Revenue argued that the Appellant provided services in Jharkhand before obtaining registration, emphasizing the need to pay Service Tax in Jharkhand for the services rendered from their Jharkhand premises.Issue 6: Appellant's contentions and argumentsThe Appellant presented various contentions, including the payment of Service Tax in Odisha, the nature of their operations in Odisha and Jharkhand, and the applicability of certain demands outside the scope of the Show Cause Notice.Issue 7: Legal interpretation of PAN registrations and separate entitiesThe Tribunal analyzed the PAN registrations of the Appellant in Odisha and Jharkhand to establish that M/s. Interstate Syndicate and Prop. Bhim Sharma are separate legal entities. This interpretation influenced the decision on tax liabilities in different states.Issue 8: Evidence of services provided in Jharkhand before registrationThe Tribunal reviewed evidence such as work orders and invoices to determine that the Appellant indeed provided services in Jharkhand before obtaining registration. This evidence supported the Revenue's claim regarding tax liabilities in Jharkhand.Issue 9: Remand for calculation of Service Tax demand on Mining servicesThe Tribunal remanded the matter to the Adjudicating authority to calculate the Service Tax demand specifically related to Mining services provided before a certain date. This decision aimed to ensure accurate calculation based on the nature of services and relevant clarifications issued by CBEC.In conclusion, the judgment addressed multiple complex issues involving tax liabilities, registration discrepancies, penalties, and the interpretation of evidence to determine the Appellant's obligations in Odisha and Jharkhand. The detailed analysis and legal interpretations provided a comprehensive resolution to the dispute.