Koso India Pvt Ltd vs Commissioner Of Central ...
- CitationAppeal No. CAL-EXCUS-000-APP-010-13-14 dated 11/11/2013 passed by Commissioner of Central E
Ratio decidendi
The rule this decision rests on
The tribunal's reasoning rests on the following principles: Where a service tax demand arises from a difference between the amounts shown in the balance sheet/profit and loss account and the amounts declared in ST-3 returns, and the assessee explains the difference by the accrual basis of accounting in the balance sheet against receipt-basis reporting and payment of tax in the returns, the assessee is entitled to an opportunity to produce the necessary records substantiating its explanation, and the original authority must consider such records before deciding the demand. Worksheets prepared by the assessee, without supporting documentary records such as sub-schedules to the balance sheet, receipt ledgers, or schedules of sundry debtors, are not by themselves sufficient to establish the claimed non-receipt of amounts or the correctness of payments; but where the original authority has rejected the assessee's explanation for want of such documents, the proper course, where the assessee has not been given a fair opportunity to produce them, is to set aside the order and remand the matter for fresh decision with a reasonable opportunity to present the case.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No. CAL-EXCUS-000-APP-010-13-14 dated 11/11/2013 passed by Commissioner of Central Excise , COCHIN( Appeal) ]
For approval and signature:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
Koso India Pvt Ltd Industrial Development Area, Kanjikode West, PALAKKAD DIST - 678623 KERALA Appellant(s)
Versus
Commissioner of Central Excise,Customs and Service Tax Calicut CENTRAL REVENUE BUILDING, MANANCHIRA, CALICUT, KOZHIKODE, - 673001 KERALA Respondent(s)
Appearance:
Ms. Vijaya Prakash, Advocate NO.543, 12TH CROSS, 8TH MAIN, J.P.NAGAR 2ND PHASE, BANGALORE 560 078 For the Appellant
Dr. A.K. Nigam, Addl. Commissioner(AR) For the Respondent
Date of Hearing: 06/03/2015
Date of Decision: 06/03/2015
CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER
Final Order No. 20555 / 2015
Per : B.S.V.MURTHY
After hearing both the sides, I find that the appeal itself can be decided at this stage. Accordingly, the requirement of predeposit is waived and appeal is taken up for final decision.
2. Service tax has been demanded on the differential amount between the amounts shown in the balance sheet/Profit & Loss account and ST3 returns. The learned counsel submits that in respect of service tax on GTA service, the service provider had paid the tax. As regards the balance amount, she says that the difference has arisen because the balance sheet is maintained on the accrual basis whereas ST3 returns and payment of tax is on receipt of payment. Therefore there is bound to be difference and she submits that the appellant had submitted a worksheet to the original authority but the same has not been verified.
3. The learned AR draws my attention to paragraph 9 of the OIO wherein the original authority has considered this aspect and for better appreciation, the same is reproduced below:
9. In respect of management, maintenance or repair service, the claim of the assessee revolves around payment of differential service tax during the subsequent years, when the service charges, billed, were received from the customers. It is true that most of the companies follow accrual basis accounting, where the billed amounts are reflected in the Income Part of Balance Sheet. But, if the amounts billed are not realized, the same shall be reflected in Sundry Debtors. Here, although the assessee has submitted detailed worksheets on their liability and subsequent payment of differential tax demanded in the notice, they are unable to produce the statutory records showing the actual receipts during the years. The assessee could have produced the sub-schedules to Balance Sheet or Receipt Ledger for taxable services or Schedule of Sundry Debtors of the company to substantiate their claim; whereas they try to beat around the bush, by making the department to be convinced on the basis of worksheets filed by them. They were required in the notice to produce at the time of showing cause, all evidences upon which they intent to rely in support their defence. As per Indian Evidence Act, 1872, evidence means all documents placed for the inspection of the Court. So, if anything apart from Balance Sheet is relied, then the assessee is required to place the same for inspection. Worksheets and statements prepared by them cannot be taken as evidence to substantiate their claim on non-receipt of amounts, when the Balance Sheet indicate a value other than shown in ST-3 returns. So, I do not find force in contentions of the assessee that are not supported with documentary evidences.
4. From the above, it cannot be said that appellants have given all the necessary details. At the same time, they deserve another opportunity to produce the necessary details to satisfy the original authority about the correctness of their payments made. Therefore, the impugned order is set aside and the matter is remanded to the original authority with a direction to decide the matter afresh. Appellants shall be given reasonable opportunity to present their case. I have not expressed any opinion on the merits of the case.
(Order pronounced in open court)
B.S.V.MURTHY TECHNICAL MEMBER Raja.
3
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