Tribunal overturns service tax demand citing lack of justification, allows appeal for relief.

The Tribunal overturned the service tax demand of Rs.5,17,406/- for the period 2010-11, along with interest and penalty, citing the Appellant's submission of facts, reconciliation statement, and Chartered Accountant's certificate. The Tribunal deemed the Commissioner's rejection of the CA certificate without reasons impermissible, noting the lack of challenge to the certificate and reconciliation statement. The demand confirmation was deemed unjustified due to the unchallenged evidence presented by the Appellant. The appeal was allowed, providing consequential relief as per law.

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Issues:
Challenge to service tax demand of Rs.5,17,406/- for the period 2010-11 due to alleged erroneous adjustments.

Analysis:
The appeal was against an Order-in-Original dated 29.07.2016, confirming a demand of Rs.9,99,683/- and dropping the remaining demand of Rs.4,46,49,840/-. The Appellant contested the demand of service tax of Rs.5,17,406/- for 2010-11, related to alleged erroneous adjustments. The Appellant argued they deposited service tax on accrual basis, even though it was due on receipt basis till 31.03.2011. They made an adjustment in 2010-11 for brokerage income not received, which was later included in 2012-13 calculations. The Appellant provided a Chartered Accountant's certificate and reconciliation, ignored by the adjudicating authority. The Ld. Commissioner confirmed the demand based on lack of ledger submission for 2012-13 and absence of documents showing receipt of the impugned amount that year.

The Tribunal noted the Appellant's submission of facts, reconciliation statement, and CA certificate. The Ld. Commissioner confirmed the demand citing absence of ledger for 2012-13 and lack of documents proving receipt of the impugned amount. However, the Commissioner did not dispute the content of the CA certificate. The Tribunal found the Commissioner's stand legally untenable as rejecting the CA certificate without stating reasons is impermissible. The adjudicating authority did not request ledger copies during the audit, despite the Appellant providing them later. The Tribunal held that since the reconciliation statement and CA certificate were unchallenged, the demand confirmation was unjustified.

Conclusively, the Tribunal found no basis to uphold the service tax demand of Rs.5,17,406/-, interest, and penalty. The appeal was allowed, providing consequential relief as per law. The judgment was pronounced on 07 June 2022.

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