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2018 (2) TMI 1254 - AT - Service Tax


Issues:
1. Calculation of tax liability based on notebook seized from appellants.
2. Request for remand of the matter to rework tax liability.
3. Dispute regarding tax demand on amounts shown as due from customers.
4. Imposition of penalties under sections 76 and 78 of the Finance Act, 1994.

Analysis:

Issue 1: Calculation of tax liability based on seized notebook
The appellants, a cable operator service provider, contested the tax liability calculated by the department based on a notebook seized from them. The notebook contained details of amounts collected for pay channels from subscribers. The appellant's counsel argued that the tax liability should be recalculated by deducting amounts not received from the total subscription value. The Tribunal acknowledged this argument and deemed it necessary to remand the matter to reexamine this aspect, indicating a possibility of reducing the actual tax demand.

Issue 2: Request for remand to rework tax liability
The appellant's counsel highlighted that the partnership concern was not fully aware of their service tax liabilities, leading to non-payment of taxes. The counsel requested setting aside the penalties due to this reason. The Tribunal, while upholding the imposition of penalty under section 78 of the Finance Act, 1994, decided to remand the case to the adjudicating authority for reassessment of tax liability. The penalty quantum was to align with the revised tax liability, and the penalty under section 76 was set aside.

Issue 3: Dispute over tax demand on amounts due from customers
Although the appellants did not dispute the tax liability for services provided, they contested the inclusion of amounts shown as due from customers in the tax calculation. The Tribunal recognized this contention and ordered a remand to investigate this specific issue, aiming to ensure justice and accuracy in determining the tax liability.

Issue 4: Imposition of penalties
The original authority had imposed penalties under sections 76 and 78 of the Finance Act, 1994. The Tribunal maintained the imposition of penalty under section 78 but directed a reassessment of the penalty amount in alignment with the revised tax liability. Notably, the penalty under section 76 was set aside, considering the circumstances of the case.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal by remanding the case to the adjudicating authority for a thorough review of the tax liability, specifically addressing the issues raised by the appellants regarding the calculation methodology and penalties under the Finance Act, 1994.

 

 

 

 

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