Service tax liability on IT software turnover challenged for lack of proof of service; appeal entertained after voluntary payment.

Analysis of service tax liability on information technology software turnover focusing on proof of service of adjudication orders, limitation for filing remedies, condonation for sufficient cause, and effect of voluntary payment. The text explains that absence of proof of delivery undermines the effective date of the order and affects the computation of the filing period; where proof is lacking, delay may be condoned if sufficient cause (such as change in corporate identity and portal access issues) is shown, allowing remedy to be entertained. It also states that voluntary payment of the differential tax was accepted as discharge of the assessed liability arising from ex parte adjudication without personal hearing.

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Issues: (i) Whether the impugned order rejecting the appeal as time-barred under Section 85(3A) of the Finance Act, 1994 is correct in the facts of the case; (ii) Whether the assessee is liable to pay service tax on the asserted turnover of Rs.25,11,236/- for the period October 2013 to March 2014.

Issue (i): Whether the appeal before the Commissioner (Appeals) filed on 28.03.2023 was time-barred under Section 85(3A) of the Finance Act, 1994 given the date of receipt of the adjudication order.

Analysis: The question turns on the date of receipt of the Order-in-Original and compliance with service provisions in Section 37C of the Central Excise Act, 1944 (as applied by Section 83). The department's records showed the SCN was returned as unclaimed and no proof of delivery (acknowledgement due or speed post proof) of the Order-in-Original was produced. An asserted email dispatch from a non-official gmail account lacked evidentiary weight. Documentary material including a postal authority response and an affidavit from the assessee supported that the adjudication order was first received by the assessee on 23.01.2023. Precedents require strict proof of service in the absence of which receipt cannot be presumed earlier. The Commissioner (Appeals) had rejected the appeal as barred by limitation without establishing actual date of service; the Tribunal examined sufficiency of cause for condonation and accepted short delay caused by change of entity and logistical steps to recreate portal credentials and make pre-deposit.

Conclusion: The impugned rejection of the appeal as time-barred is not sustained; the delay is condoned and the appeal is held to be within permissible time.

Issue (ii): Whether the assessee is liable to pay service tax on the asserted turnover of Rs.25,11,236/- for the specified period.

Analysis: The adjudication proceeded ex parte without affording an opportunity to reply or personal hearing and relied on ITR/TDS data without seeking reconciliation from the assessee as directed by board instructions addressing indiscriminate SCNs. The assessee had made voluntary payment of the differential service tax into government account and produced ledger entries indicating prior payments which were not examined by the department. In these circumstances, and given absence of a reasoned adjudication after hearing the assessee, there were no strong grounds sustained for confirming the differential demand.

Conclusion: The confirmed adjudged demand is set aside; the assessee's voluntary payment is treated as satisfying the asserted liability and no further demand is sustained.

Final Conclusion: The impugned order dated 22.09.2023 is set aside and the appeal is allowed on the basis of (a) absence of proof of service of the adjudication order for limitation purposes and (b) discharge of the asserted service tax liability by voluntary payment, with the overall effect that the departmental confirmation of demand is not sustained.

Ratio Decidendi: Where a taxing authority fails to produce conclusive proof of service in accordance with Section 37C (acknowledgement due or verifiable proof of delivery), receipt of the order cannot be presumed for limitation; absence of such proof coupled with ex parte adjudication and compliance by voluntary payment justifies setting aside a confirmed demand and condoning limited delay for filing appeal.

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