Custom, Excise & Service Tax Tribunal
Association Of State Road vs Commissioner Of Service Tax on 7 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Service Tax Appeal No. 51090 of 2014- Cus
Service Tax Stay Application Nos. 51261 of 2014- Cus
[Arising out of Order-In-Appeal No. 12/2013-14 dated 14.11.2013 passed by Commissioner(Appeals), Central Excise, Delhi II]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Mr. B Ravichandran, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
Association of State Road Appellants
Transport Undertaking
Vs.
Commissioner of Service Tax Respondent
Delhi Appearance:
Shri B L Narasimhan, Advocate for the Appellants
Shri Satyaveer Singh, AR for the Respondent
CORAM:
Hon'ble Ms Archana Wadhwa, Member (Judicial)
Hon'ble Mr. B Ravichandran, Member (Technical)
Date of Hearing/ Decision: 07.03.2016
FINAL ORDER NO.51046 /2016-Cus
Per Ms. Archana Wadhwa :
For the reasons recorded in appeal memo, we after dispensing the condition of pre-deposit of dues, proceeded to decide the appeal itself, with the consent of both the sides.
2. The appellant is an Association of State Road Transport Undertaking (hereinafter referred to as ASRTU), they have their another division and known as Central Institute of Road Transport (CIRT) at Pune. Both the units are engaged in providing various services to its registered members. Proceedings were initiated against the appellant by way of issuing two show cause notices, which raised the demand of Service tax in respect of various services being provided by them and falling under different heads. The proceedings in the show cause notice culminated into impugned orders passed by the Commissioner confirming the demand of service tax to the tune of Rs.9.66 crores. It is seen that during the adjudication before the Commissioner,the appellant took a categorical stand that most of the services involved in the present proceedings, were being provided by their other division CIRT, Pune who were discharging their full service tax liability on the same. The appellant contended that the CIRT, Pune, has paid the service tax to the tune of Rs.6.03 crores approx. The adjudicating authority took note of the said plea of the assessee but observed as under:-
1.2 The contention of ASRTU is that it has two establishments/branches [i.e. (i) ASRTU, Delhi and (ii) CIRT, Pune]; that the balance sheets of ASRTU are the consolidated balance sheets of both establishments / branches; that the activities mentioned against (i) and (iv) above are undertaken by CIRT Pune, which is already registered with the jurisdictional Service Tax authorities and is paying the service tax payable on the activities undertaken by it. In support of this contention , ASTRU also submitted the photo copies of some challans where under the Service Tax was deposited by CIRT Pune. I notice that Service Tax authorities of Delhi (Who initiated present case) have preferred to maintain a silence on the subject. Documents submitted by the noticee pertaining to their claim that Service Tax was correctly being paid by CIRT Pune are vague and inconclusive. The notice vide their letter dated 10.10.2013 had promised to submit all the relevant information /documents within a weeks time, but I find that till date the requisite documents have not been submitted. The reconciliation sheet submitted by the noticee along with their reply dated 18.6.2012 is totally vague, incomplete and misleading in the said reconciliation sheet the noticee has inconspicuously claimed exemption from payment of service tax on account of export of services, but the assessee has not submitted any proof, whatsoever, in this regard in support of their claim regarding export of services. During the course of personal hearing held on 21.10.2013, the assessee had produced a letter dated 15.10.2013 issued by State Bank of India, Pune stating that the requisite report /verification in respect of deposit of Service Tax by CIRT Pune would be given in 10-15 days time, but I find that no such report has been produced by the noticee. I find that even the certificate issued by the Chartered Accountants contains vague and incomplete information and cannot be treated as a valid proof in support of the noticee that CIRT Pune had correctly discharged their Service Tax liability. During the course of personal hearing held on 21.8.2012 the noticee contended that their balance sheets were consolidated for ASRTU Delhi and CIRT Pune. In this regard, vide letter dated 27.9.2013 the noticee was requested to explain as to where and under which head the Service Tax paid by CIRT Pune had been accounted for in the balance sheet. The noticee observed complete silence in this regard and did not give any explanation whatsoever. On perusal of the copies of ST 3 returns and TR 6/ GAR 7 challans pertaining to CIRT Pune submitted by the noticee, I find that there is no co-relation between the two. One perusal of balance sheets of ASRTU, I find that there is no mention of service tax paid / payable by CIRT, Pune in the balance sheets. Further, I find that the amount of Service Tax paid as shown in the balance sheets does not match with the amount shown in the certificate dated 14.10.2013 issued by the Chartered Accountants. Under the circumstances, I am left with no option but to treat the entire amount demanded in the two SCNs as recoverable from the noticee.
4. As is seen from the above, the rejection of the assessees claim that CIRT Pune has deposited the service tax to the tune of Rs. 6 crores in respect of most of services is on the main ground that invoices produced by the assessee did not tally with the service tax paid by Pune, in the common balance sheet for the two. It also stand recorded by the adjudicating authority that in respect of ST 3 return and TR 6 challan, produced before him, there is no co-relation between two.
We find the above observation of the Commissioner did not reflect upon the correct factual position. We fail to understand as to how the challans produced by the appellant would get reflected in the common balance sheet inasmuch as there is no provision in the balance sheet showing any payment of service tax on the basis of different categories or invoicewise etc. Similarly, the observations made by the adjudicating authority in respect of ST 3 return and TR 6 invoices not being co-related is vague observations without any further details as to how the two documents are not in consonance with each other. When the assessee is taking specific plea that service tax on the various services, which were actually being provided by CIRT Pune, and service tax stand discharged by CIRT Pune, there was a legal obligation on the part of the adjudicating authority to verify the said fact from the jurisdictional Service tax authorities of Pune or to get the invoices and the ST 3 return filed by the CIRT Pune to be verified. Ignoring the said documentary evidence by making general observations in a legal matter cannot be appreciated. It is primarily for this reason that we are of the opinion that impugned order is required to be set aside and matter needs to be remanded to the original authority to get the said exercise done and to re-decide the impugned issue based upon the verifications.
5. We also note that the remaining Service Tax demand of around Rs.3 crores, the majority part of the demand belongs to business auxiliary service. The appellants contention is that same stand confirmed by the lower authorities on the ground that they were providing services to their member transport authorities inasmuch as they were providing services of finalization of Ratecontract between the manufacturer vendor and the member transport authorities for which they are charging the fee from the manufacturer vendor. It is not in dispute that no fee is charged by the appellant from the member transport. If that be the case, we prima facie agree with the learned advocate that said activity may not get covered under the category of Business Auxiliary service. We have not gone into the details of said legal issue and inasmuch as the matter is being remanded to the adjudicating authority, we leave open it for the adjudicating authority to re-decide the issue on merits.
7. We also find that small amount of tax to the extent of Rs.12 lakh stand confirmed against the appellant under the category of club and association activity. The said issue is now decided by various High courts. Reference may be made to judgment of Honble High Court of Jharkhand in Ranchi Club Ltd vs. CCE [2012 (26) STR 401 (Jhar)] and in Honble High Court of Gujarat in the case of Sports Club of Gujarat Ltd. vs. Union of India [2013-TIOL-528-HC-AHM-ST]. As the matter is being remanded, the appellant would take the plea in respect of their liability before Commissioner, who would decide the same in accordance with the law declared by various High Courts.
8. Stay petition as well as appeal gets disposed of in the above manner.
(dictated and pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
( B Ravichandran )
Member(Technical)
ss
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