CESTAT, AHMEDABAD BENCH
State Bank of India
Commissioner of Central Excise
ORDER NO. S/829/WZB/AHD of 2012
APPLICATION NO. ST/S/1623 of 2011
APPEAL NO. ST/692 of 2011
MAY 16, 2012
1. On the ground that State Bank of India had not paid service tax on the commission received from EPFO and ESIC during the period from 10.09.2004 to 31.03.2007, the proceedings were initiated. Even before the show-cause notice was issued for initiating proceedings, appellant paid the amount of Rs. 6,62,891/- out of the total amount of Rs. 8,81,090/-with interest. It was submitted that during the proceedings before the lower authorities that the branch was paying service tax from 10.9.2004 to July 2005 and stopped paying service tax thereafter because there was instruction from their Head Office that there was no service tax liability. As soon as they were informed for the liability by the department, they had paid the amounts due for the subsequent period on 06.2.2008 with interest. It was also submitted that they do not have any evidence to show that they had actually made payment during September 2004 to July 2005 because of floods in Surat. During the floods the Branch was underwater for nearly four days and consequently all the documents were destroyed and this was the reason why the Branch could not furnish the details of payments made by them. In view of this, it was submitted that appellant has paid the entire amount and the dispute is only for the period from September 2004 to July 2005 and the dispute has arisen because of the appellant does not have the record to show that they had actually made the payment. During the hearing today, appellant also produced a certificate issued by the Chief Manager of the Bank certifying that from the available records, the service tax due for the period from September 2004 to July 2005 has been paid.
2. Since a substantial amount has already been paid and regarding the balance amount also the appellant claims to have paid but does not have the evidence in view of the destruction of documents in flood, I consider that the appellant has made out a strong prima facie case for waiver of pre-deposit and grant of stay. Accordingly, the requirement of pre-deposit of service tax demanded with interest and penalty is waived and stay against recovery is granted during the pendency of appeal.
3. Before parting, I would like to observe that even if the assessee does not have an evidence of payment of service tax, if the returns have been filed for the period involved, the department could have verify from the copies of the returns that any payment has been made or not. A copy of the challan also goes to PAO of the department who maintain accounts of payment by various assessees. It is possible to verify the details are available with the PAO. This effort could have been made before issue of show-cause notice and initiating proceedings when the assessee is making a claim that they have paid the amounts.