2009 (9) TMI 529 - AT - Service Tax

CESTAT overturns Appeals Commissioner decision, remands case for re-determination of Service tax amount.

SUDESH SHARMA Versus COMMISSIONER OF CENTRAL EXCISE, LUDHIANA

The Appellate Tribunal CESTAT, New Delhi, set aside the Commissioner (Appeals) order and remanded the case for re-determination of the Service tax amount. ... Business Auxiliary Service- Notification No. 13/2003-ST., dated 20-6-03- The appellant provided taxable service of Business Auxiliary Service. During the period from 1-7-03 to 8-7-04, the service of commission agent provided by a person was exempt from Service tax under Notification No. 13/2003-ST., dated 20-6-03 and this notification was amended only w.e.f. 9-7-04 so as to make the appellant liable for payment of Service tax. The appellant was issued SCN dated 19-6-07 for recovery of Service tax on non-paid tax amounting to Rs. 2,13,7861- along with interest. Held that- the appellant that they were eligible for small service provider under exemption Notification No. 6/05-S.T. and same was not considered by the Asstt. Commissioner, this is a legal point which can be made at this stage and since this had not been earlier considered by the adjudicating authority, the same can be considered in course of t novo proceedings. Thus, the impugned order is set aside and the matter is remanded to the original adjudicating authority for re-determining the quantum of Service tax recoverable from the appellant keeping in view the directions as mentioned above. The Appellate Tribunal CESTAT, New Delhi, under the representation of Shri Sudhir Malhotra Advocate, considered a case where the appellant provided taxable service of Business Auxiliary Service as a commission agent. The service provided was exempt from Service tax under Notification No. 13/2003-ST until 9-7-04. An SCN was issued on 19-6-07 for recovery of Service tax on non-paid tax amounting to Rs. 2,13,7861, along with interest and penalties. The appellant argued that the assessable value for charging Service tax should exclude amounts billed but not received and outstanding amounts prior to 9-7-04. The appellant also claimed eligibility for small service provider exemption under Notification No. 6/05-ST. The Commissioner (Appeals) upheld the original order, but the Tribunal set it aside, remanding the matter for re-determination of the Service tax amount, considering the appellant's arguments and eligibility for exemption. The Tribunal emphasized that Service tax liability arises when the taxable service is provided, not when the payment is received, and that the rate applicable is that in force when the taxable event occurs. The appellant was given the opportunity to raise any legal points during the new proceedings.