Export of services evidence and foreign exchange realisation led to remand for fresh consideration of tax demand and penalties.

Differential service tax demand on export of services was questioned because Bank Realisation Certificates were not produced for part of the receipts, while a Chartered Accountant's certificate before the Tribunal stated that the amounts were received in convertible foreign exchange through banking channels. As this evidence had not been considered by the Commissioner (Appeals), the Tribunal found fresh examination necessary and remanded the matter for de novo adjudication. The remand covered the differential demand, interest, and consequential penalties, with directions to decide the issues on merits in observance of natural justice.

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Issues: Whether the differential service tax demand, interest, and penalties confirmed on the footing that foreign exchange realization evidence was not produced should be re-examined in light of the Chartered Accountant's certificate produced before the Tribunal, and whether the matter required remand.

Analysis: The dispute related to export of services and the confirmation of demand only in respect of the amount for which Bank Realisation Certificates were not produced before the appellate authority. The appellant produced a Chartered Accountant's certificate stating that the amount was received in convertible foreign exchange through banking channels. Since this material was not before the Commissioner (Appeals), the Tribunal found it appropriate to have the differential demand reconsidered. The matter was therefore sent back for fresh adjudication on merits with observance of natural justice.

Conclusion: The matter was remanded to the Commissioner (Appeals) for de novo consideration of the differential demand, interest, and consequential penalties.

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