Case Law Details
Varun Transport Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
In Varun Transport vs Commissioner of CGST and Central Excise CESTAT Mumbai, the appellant challenged the confirmation of a service tax demand arising from discrepancies between income reported in Income Tax Returns/Form 26AS and Service Tax Returns for the financial year 2014–15. The Department initiated proceedings based on a difference of ₹60.21 lakh and confirmed a service tax demand of ₹7.44 lakh along with interest and penalties. The Commissioner (Appeals) upheld the demand on the ground that the appellant failed to provide sufficient documentary evidence to establish that the tax liability had been discharged by the service recipient under the Reverse Charge Mechanism (RCM).
The appellant contended that the difference pertained to Goods Transport Agency (GTA) services provided to a recipient, which had discharged the service tax liability under RCM. It was argued that a certificate from the recipient confirming such payment had been submitted but was disregarded due to lack of detailed break-up. During the hearing before the Tribunal, the appellant produced a fresh certificate from the recipient confirming payment of service tax amounting to ₹60.21 lakh under RCM for the relevant period.
The Tribunal observed that the new certificate was produced for the first time at the appellate stage and required verification. Accordingly, it held that the matter should be remanded to the original adjudicating authority to examine the certificate and supporting documents to ascertain whether the service tax liability had already been discharged by the recipient. The impugned order was set aside, and the case was remanded for de novo adjudication with a direction to grant an opportunity of personal hearing to the appellant.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Heard both sides and perused the case records.
2. Briefly stated, the facts of the case are that the appellant is engaged inter alia, in the provision of taxable services under the category of Clearing and Forwarding Agent Services, Business Auxiliary Services and Transport of Goods by Road services to the various service receivers/clients. During the course of scrutiny of TDS/ITR data gathered from the Income Tax Department for the year 2014-15, it was noticed by the Service Tax Department that there is a difference of figure of Rs.60,21,482/- towards income shown in the ITR vis-à-vis value shown in the Service Tax Returns. On the basis of such difference in the figures reflected in both the records, the Department had initiated show-cause proceedings against the appellant, seeking for confirmation of the service tax demand. The show-cause notice dated 22.09.2020 issued in this regard was adjudicated vide the order dated 31.01.2022, wherein the original authority had confirmed service tax demand of Rs.7,44,255/- alongwith interest and also imposed penalties under Sections 77 & 78 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017. On an appeal against the said adjudication order dated 31.01.2022, the learned Commissioner (Appeals) vide the impugned order dated 17.03.2023 has upheld confirmation of the adjudged demand and rejected the appeal filed by the appellant. Feeling aggrieved with the impugned order dated 17.03.2023, the appellant has preferred this appeal before the Tribunal.
3. In support of this appeal, the appellant has contended that the difference in the figures reflected in the Form 26AS/TDS vis-à-vis Service Tas Returns was towards provision of the GTA service by the appellant to M/s Ambuja Cements Ltd; that since the service provided was in the nature of Goods Transport Agent Service, the recipient of services M/s Ambuja Cements Ltd., had discharged the service tax liability as a recipient of such service, under the Reverse Charge Mechanism (RCM). However, On perusal of the case records, more particularly, the impugned order dated 17.03.2023 passed by the learned Commissioner (Appeals), I find that he has upheld the adjudication order on the ground that no documentary evidences were produced by the appellant to show that the recipient of services had discharged the entire differential amount as service tax under the RCM.
4. With regard to such findings recorded in the impugned order, learned Chartered Accountant appearing for the appellant has stated that the certificate dated 14.12.2021 issued by the recipient of services M/s Ambuja Cements Ltd., was placed before the learned Commissioner (Appeals), but he has ignored such certificate on the ground that the break-up of the differential amount was not available in the said certificate.
5. When the matter was called out for hearing today, learned Chartered Accountant submitted a fresh certificate from the recipient of services M/s Ambuja Cements Ltd., clarifying that during the disputed period 2014-15, they had discharged the service tax liability of Rs.60,21,402/- towards GTA service under RCM, as a recipient of such service.
6. Since the certificate of M/s Ambuja Cements Ltd., certifying payment of service tax before the Service Tax Department under the RCM was submitted for the first time before the Tribunal, I am of the view that the matter should be remanded back to the original authority for verification of such certificate together with the Annexure attached thereto for confirmation,S whether service tax liability had been discharged by the recipient of services M/s Ambuja Cements Ltd.
7. In view of the foregoing discussions, the impugned order is set aside and appeal is remanded to the original authority for de novo adjudication in line with the observations made herein above. Needless to say that opportunity of personal hearing should be granted to the appellant before deciding the matter afresh.
8. In the result, the appeal is allowed by way of remand.
(Dictated and pronounced in open court)
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