TaxTMI 
TaxTMI 
2026 (9) TMI 1503
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....ld service tax registration. Apart from providing Services to their clients, they also receive certain services from Foreign Service Providers (FSP). The Appellant used to discharge service tax for their liability, including services received from the FSP under Section 66A of the Finance Act, 1994. On verification of the records of the Appellant, it was noticed that they had received Consulting Engineer Service/Business Auxiliary Service from the FSP and had not paid Service Tax on a part of the value shown as withheld which was actually Tax Deducted at Source (TDS), towards payment of Income Tax. This apart, for the period 2007-08, there was also a short payment of service tax to the tune of Rs.1,47,647/- due to wrong adoption of rate of service tax. Hence four show cause notices were issued to the appellant proposing to demand the service tax arising on account of non-inclusion of the TDS for various periods from 2007-08 to 2011-12 and also for the short payment of service tax. 3. After due process of law, the Adjudicating Authority, vide the common Impugned Order No.90/2016-ST dated 19.07.2016, confirmed the entire demands of service tax of Rs.20, 25,962/- Rs.14,77,860/-, Res....
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....t to have paid tax at twelve per cent instead of ten per cent, it was submitted that the services in question were received while the rate stood at twelve per cent, but payment to the foreign service provider was made only on 24th February 2009 and 26th February 2009, as borne out at page 54 of the paper book. Since liability to pay service tax under reverse charge was said to arise only when payment is made, the adoption of the ten per cent rate was said to be in order, and reliance was placed on Adani Enterprises Ltd. v. Commissioner of Service Tax, Ahmedabad, Final Order No. 12428/2023 dated 2nd November 2023 in Service Tax Appeal No. 13065 of 2014 (Tri. Ahmedabad). c) that in as much as the demands of tax are thus not sustainable, there is no occasion for demand of any interest or imposition of any penalties. Further, the penalty under Section 78 cannot be imposed in this case, in as much as the issue is interpretative in nature and the demand is only on account of the issue whether tax is payable on withholding tax or not and what is the correct rate of tax applicable. 6. Shri. N. Satyanarayana, Ld. AR appearing on behalf of the Respondent reiterated the findings i....
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....earing on an order passed under the Finance Act, 1994, and that the Commissioner (Appeals) continues to possess the power to pass such order as he thinks fit, including an order of remand, in an appeal preferred under Section 85. The Gujarat High Court has reached the same conclusion by a different statutory route, holding that Section 85(5) of the Finance Act, 1994 does not import the limitation on remand found in Section 35A(3) of the Central Excise Act into an appeal under Section 85, since Section 85(4) confers on the Commissioner (Appeals) the power to pass such order as he thinks fit, including an order of remand. The Order in Commissioner of Service Tax v. Associated Hotels Ltd., 2015 (37) S.T.R. 723 (Guj.) refers. Bound as we are by the view of the High Courts, we are unable to accept the submission that the Commissioner (Appeals) lacked jurisdiction to remand the present matter. 10. Be that as it may, we are of the considered view that the power to remand is not to be exercised as a matter of course, more so in a case touching public revenue, which ought to attain finality without needless rounds of adjudication, as can be seen from the Judgement of the Hon'ble High Cou....
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....16 (43) S.T.R. 132 (Tri. Mumbai); Garware Polyester Ltd. v. Commissioner of Central Excise and Customs, Aurangabad, 2017 (5) G.S.T.L. 274 (Tri. Mumbai); Hindustan Oil Exploration Co. Ltd. v. Commissioner of GST and Central Excise, Chennai, 2019 (25) G.S.T.L. 252 (Tri. Chennai); T.V.S. Motor Company Ltd. v. Commissioner of Central Excise and Service Tax, Chennai III, 2021 (55) G.S.T.L. 459 (Tri. Chennai); FCI OEN Connectors Ltd. v. Commissioner of Central Tax, Cochin, (2024) 22 Centax 497 (Tri. Bang.); Adani Bunkering Pvt. Ltd. v. Commissioner of Central Excise, Ahmedabad II, (2024) 23 Centax 405 (Tri. Ahmd.) are authorities for this principle. It being admitted, and indeed found by the original authority, that the withholding tax here was never part of what the appellant paid or was liable to pay to the Foreign Service Provider, the demand raised on that component cannot be sustained. We accordingly hold that the withholding tax retained by the appellant from its own funds is not includible in the value of taxable service, that no service tax is payable on that component, and that the remand directed by the Commissioner (Appeals) on this aspect stood unnecessary and is set aside. ....