TaxTMI 
TaxTMI 
2026 (8) TMI 922
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....a manufacturer of diesel generator sets and registered under the Finance Act, 1994, was issued Show Cause Notice No.108/2012-ST dated 18.10.2012 proposing recovery of service tax of Rs.6,28,566/- under Erection, Commissioning and Installation Service and Rs.2,74,842/- under Goods Transport Agency (GTA) Service, together with interest and penalties, alleging short-payment of service tax, incorrect disclosure of taxable value and irregular utilisation of CENVAT credit during 2007-08 to 2009-10. The original adjudicating authority confirmed the demand by Order-in-Original No.08/2014 dated 31.01.2014. In appeal, the Commissioner (Appeals), by Order-in-Appeal No.50/2016 dated 29.12.2016, remanded the matter for de novo adjudication directing reconsideration of the classification of the activity as Works Contract Service with effect from 01.06.2007 and verification of the appellant's claim regarding payment of service tax on GTA services. Pursuant thereto, De Novo Order-in-Original No.05/2017 dated 31.05.2017 partly re-quantified the demand but substantially confirmed the service tax, interest and penalties. The appellant's challenge that the de novo authority had failed to compl....
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....earlier remand order, the de novo adjudication and the impugned Order-in-Appeal, the following questions arise for determination: - i. Whether the de novo adjudicating authority has correctly complied with the directions contained in the earlier Order-in-Appeal and whether the demand relating to Erection, Commissioning and Installation Service/Works Contract Service has been validly determined in accordance with the Finance Act, 1994 and the evidence on record? ii. Whether the demand of service tax under Goods Transport Agency (GTA) Service, including the quantification of liability, appropriation of payments already made, admissibility of CENVAT credit, and reconciliation of the appellant's tax payments, has been correctly determined in accordance with the statutory provisions and the remand directions? iii. Whether the invocation of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 and the consequential levy of interest and penalties under Sections 75, 76, 77 and 78 are legally sustainable? 6. We now proceed to examine the issues arising for determination in the present appeal sequentially. Issue No.....
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....g supply of materials and labour. The de novo adjudicating authority accepted the applicability of Works Contract Service after 01.06.2007. The surviving controversy is whether the consequential quantification was carried out in accordance with the remand directions and the statutory provisions. 11. The appellant further contended that detailed reconciliation statements, GAR-7 challans, CENVAT credit records and payment particulars establishing discharge of service tax and interest were produced before the de novo authority. According to the appellant, these records were not properly verified despite the specific remand directions. 12. We find merit in this contention. The de novo adjudication order required reconciliation of the taxable value, statutory returns, books of account, GAR-7 challans, CENVAT credit records and other documentary evidence. Mere recording that the documents were verified, without indicating the payments accepted or rejected and the reasons therefor, does not satisfy the remand directions or the requirement of a reasoned adjudication. 13. The appellant also contended that the de novo authority failed to grant due credit for service tax already disc....
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.... Notice proposed recovery of Rs.2,74,842/- based on differences between the balance sheet figures and the ST-3 returns. The appellant consistently contended that the liability, together with applicable interest, had already been discharged and supported the claim by reconciliation statements, GAR-7 challans, CENVAT credit records and other documentary evidence. It was also contended that the de novo adjudicating authority failed to verify these records despite the specific directions contained in the earlier remand order. 19. The earlier remand order specifically required verification of the appellant's claim regarding payment of service tax under GTA Service. Such verification necessarily required reconciliation of the departmental computation with the appellant's books of account, ST-3 returns, GAR-7 challans, CENVAT credit records and payment particulars. However, the de novo order merely records that the documents were verified without indicating the payments accepted, the payments rejected or the reasons therefor. Such a general observation cannot substitute a proper reconciliation in compliance with the remand directions. 20. We also find merit in the appellant&....